A Trio of Low Price-to-Median-Price-Sales Stocks
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When in search of bargains, investors may want to consider the following three companies, as their stocks have low price-to-median-price-sales values when compared to the average of the S&P 500 (which stands at around 1.73 as of the writing of this article).
This approach is based on the idea that the stock valuation will revert to its historical (10-year) average in terms of the price-sales ratio. It requires investors to divide the current share price by the trailing twelve-month revenue per share times the 10-year median price-sales ratio.
Wall Street sell-side analysts also expect higher share prices for these stocks over the months ahead, as they have issued optimistic recommendation ratings for them.
New Oriental Education & Technology Group Inc
The first stock investors may want to consider is New Oriental Education & Technology Group Inc (NYSE:EDU). Based in Beijing, China, the company is an operator of 104 schools, 1,361 learning centers and 12 bookstores in mainland China where students have access to educational programs, services and other products.
New Oriental Education & Technology Group Inc's price-to-median-price-sales value is 0.57 as of July 21, which ranks higher than 57 out of 69 companies that operate in the education industry.
The company's revenue per share for the trailing 12 months ended in Feb. 2021 was $2.36. New Oriental Education & Technology Group Inc has a 10-year median price-sales ratio of 4.84. Thus, the median price-sales value is $11.47 as of July 21.
The stock was trading at $6.50 per share at close on Wednesday for a market capitalization of $10.59 billion and a 52-week range of $5.75 to $19.97.
New Oriental Education & Technology Group Inc hasn't paid dividends since Oct. 6, 2017.
GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 9 out of 10 to its profitability.
Wall Street recommends a median rating of buy with an average target price of $15.73 per share for the stock.
Celestica Inc
The second stock investors may want to consider is Celestica Inc (NYSE:CLS), a Toronto, Canada-based provider of hardware platform and supply chain solutions for several industries in North America and internationally, including aerospace and defense, industrial and energy. The company also serves biotechnology, capital equipment, original equipment manufacturers (OEMs) and cloud-based providers.
Celestica Inc's price-to-median-price-sales value is 0.61 as of July 21, which ranks higher than 1,294 out of 1,406 companies that operate in the hardware industry.
The revenue per share for the trailing 12 months ended in March 2021 was $43.88. Celestica Inc has a 10-year median price-sales ratio of 0.28. Thus, its median price-sales value is $12.31 as of July 21.
The stock was trading at $7.49 per share at close on Wednesday for a market capitalization of $954.93 million and a 52-week range of $5.77 to $9.38.
Currently, Celestica Inc does not pay dividends.
GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 8 out of 10 to its profitability.
Wall Street recommends a median rating of hold for the stock with an average target price of $9.28 per share.
Under Armour Inc
The third stock investors may want to consider is Under Armour Inc (NYSE:UAA), a Baltimore, Maryland-based developer, marketer and distributor of branded performance apparel, footwear and accessories for men, women and youth in North America and internationally.
Under Armour Inc's price-to-median-price-sales value is 0.66 as of July 21, which ranks higher than 395 out of 449 companies that operate in the manufacturing - apparel and accessories industry.
The revenue per share for the trailing 12 months ended in March 2021 was $10.52. Under Armour Inc has a 10-year median price-sales ratio of about 2.94. Therefore, the median price-sales value is $31.03 as of July 21.
The stock price was trading at $20.50 per share on Wednesday for a market capitalization of $8.71 billion and a 52-week range of $9.63 to $26.45.
Currently, Under Armour Inc does not pay dividends.
GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 6 out of 10 to its profitability.
Wall Street recommends a median rating of hold with an average target price of $25.46 per share for the stock.
Disclosure: I have no position in any securities mentioned.
This article first appeared on GuruFocus.
