Since 2000 the S&P 500 has been in a secular bear market. Historically, great companies become undervalued during secular bear markets. The enterprise value-to-operating income, price-to-earnings and price-to-book value ratios measure valuation. Below is a list of five S&P 500 companies with low debt-to-equity ratios that are undervalued.
Apple Incorporated (AAPL)
Apple is trading at a market value of just over $365 billion and has $26.5 billion in cash and short-term securities on the balance sheet. Apple's enterprise value is just under $340 billion and operating income for the twelve months trailing is $34.2 billion. The enterprise value-to-operating income ratio for Apple is 9.91 and the price-to-earnings ratio is 14.23. The price-to-book value ratio is 4.77.
Chevron Corporation (CVX)
Chevron is trading at a market value of just over $207 billion and has $20.3 billion in cash and short-term securities on its balance sheet. Chevron's enterprise value is roughly $187 billion and operating income for the twelve months trailing is $40.1 billion. The enterprise value-to-operating income ratio for Chevron is 4.66 and the price-to-earnings ratio is 7.73. The price-to-book value ratio is 1.72.
Forest Laboratories Incorporated (FRX)
Forest is trading at a market value of just under $8 billion and is holding $2.2 billion in cash and short-term securities. Forest's enterprise value is roughly $5.7 billion and operating income for the twelve months trailing is $1.5 billion. The enterprise value-to-operating income ratio for Forest is 3.99 and the price-to-earnings ratio is 7.34. The price-to-book value ratio is 1.53.
The Mosaic Company (MOS)
Mosaic is trading at a market value of $22.6 billion and is holding $4.05 billion in cash and short-term securities. Mosiac's enterprise value is roughly $18.51 billion and operating income for the twelve months trailing is $2.95 billion. The enterprise value-to-operating income ratio for Mosaic is 6.28 and the price-to-earnings ratio is 8.23. The price-to-book value ratio is 1.85.
Western Digital Corporation (WDC)
Western is trading at a market value of $7.57 billion and is holding $3.68 billion in cash and short-term securities. Western's enterprise value is roughly $3.90 billion and operating income for the twelve months trailing is $762 million. The enterprise value-to-operating income ratio for Western is 5.11 and the price-to-earnings ratio is 9.93. The price-to-book value ratio is 1.32.
Most Undervalued to Least Undervalued (enterprise value / operating income)
1. Forest Laboratories
2. Chevron
3. Western Digital
4. Mosaic
5. Apple
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
No comments:
Post a Comment