If our aim is buying low and selling high then the initial price we pay for our new position is very important. We believe that analyzing stocks that are near their 52 week lows is a good starting point to find cheap stocks.
Here is the list of large-cap services stocks that are trading within 10% of their 52 weeks lows. These stocks have P/E ratios of below 15 and market cap of higher than $5 billion. (Market data is sourced from Finviz)
1. Best Buy Co. Inc. (BBY): Best Buy is a retailer providing consumer electronics, home office products, entertainment products, appliances and related services worldwide. BBY recently traded at $24.1 and has a 2.7% dividend yield. BBY lost 24.7% during the past 12 months. The stock has a market cap of $9 billion, P/E ratio of 7.8 and forward P/E ratio of 6.5. The stock has total debt/equity ratio of 0.34 and Beta of 1.29. One of the new stocks that satisfied Joel Greenblatt’s New Magic Formula criteria during second quarter is Best Buy (Here are the top 25 magic formula stocks in Joel Greenblatt’s portfolio).
2. Carnival Corporation (CCL): Carnival Corporation is a cruise and vacation company. CCL recently traded at $29.5 and has a 3.4% dividend yield. CCL lost 5.8% during the past 12 months. The stock has a market cap of $23.4 billion, P/E ratio of 12.5 and forward P/E ratio of 9.8. The stock has total debt/equity ratio of 0.41 and Beta of 1.48. Harris Associates had more than $250 Million in CCL at the end of March 2011.
3. Walt Disney Co. (DIS): The Walt Disney Company is an entertainment company operating worldwide. DIS recently traded at $31.9 and has a 1.3% dividend yield. DIS lost 2.6% during the past 12 months. The stock has a market cap of $59.1 billion, P/E ratio of 13.5 and forward P/E ratio of 10.9. The stock has total debt/equity ratio of 0.34 and Beta of 1.18. Mason Hawkins’ Southeastern Asset Management and Chris Hohn’s Childrens Investment Fund hold the largest DIS positions among the 300-plus funds we track (check out Mason Hawkins’ top holdings here).
4. Gap Inc. (GPS): The Gap is a specialty retailing company. GPS recently traded at $15.7 and has a 2.9% dividend yield. GPS lost 7.4% during the past 12 months. The stock has a market cap of $8.6 billion, P/E ratio of 8.5 and forward P/E ratio of 9.1. The stock has total debt/equity ratio of 0.33 and Beta of 1.21. Edward Lampert’s ESL Investments had more than $600M of GPS at the end of March 2011.
5. Kohl's Corp. (KSS): Kohl’s Corporation operates department stores in the United States. KSS recently traded at $45.1 and has a 2.2% dividend yield. KSS lost 1.7% during the past 12 months. The stock has a market cap of $12.7 billion, P/E ratio of 11.3 and forward P/E ratio of 8.9. The stock has total debt/equity ratio of 0.24 and Beta of 0.93.
6. Lowe's Companies Inc. (LOW): Lowe's Companies is a home improvement retailer. LOW recently traded at $19.3 and has a 2.9% dividend yield. LOW lost 4.6% during the past 12 months. The stock has a market cap of $25.1 billion, P/E ratio of 13.6 and forward P/E ratio of 10.4. The stock has total debt/equity ratio of 0.38 and Beta of 1.02.
7. Omnicom Group Inc. (OMC): Omnicom Group provides advertising, marketing and corporate communications services. OMC recently traded at $37.1 and has a 2.7% dividend yield. OMC gained 3.7% during the past 12 months. The stock has a market cap of $10.4 billion, P/E ratio of 12.2 and forward P/E ratio of 10. The stock has total debt/equity ratio of 0.9 and Beta of 1.16.
8. Sysco Corp. (SYY): Sysco Corporation provides food and related products in the United States. SYY recently traded at $27 and has a 3.9% dividend yield. SYY lost 1.8% during the past 12 months. The stock has a market cap of $15.8 billion, P/E ratio of 13.8 and forward P/E ratio of 12.9. The stock has total debt/equity ratio of 0.64 and Beta of 0.69.
9. United Continental Holdings, Inc. (UAL): United Continental Holdings provides passenger and cargo air transportation services. UAL recently traded at $17.3 and lost 15.8% during the past 12 months. The stock has a market cap of $5.7 billion, P/E ratio of 12.5 and forward P/E ratio of 3.5. The stock has total debt/equity ratio of 7 and Beta of 1.04.
10. Wal-Mart Stores Inc. (WMT): Wal-Mart operates retail stores worldwide. WMT recently traded at $52.3 and has a 2.8% dividend yield. WMT gained 6.9% during the past 12 months. The stock has a market cap of $181.6 billion, P/E ratio of 12.2 and forward P/E ratio of 10.7. The stock has total debt/equity ratio of 0.86 and Beta of 0.34. Warren Buffett holds more than $2 Billion in WMT (check out Warren Buffett’s top holdings here).
11. Western Union Co. (WU): Western Union Company provides money transfer and payment services worldwide. WU recently traded at $15.8 and has a 2% dividend yield. WU gained 0.6% during the past 12 months. The stock has a market cap of $9.9 billion, P/E ratio of 10.8 and forward P/E ratio of 9.2. The stock has total debt/ equity ratio of 9.46 and Beta of 1.44.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
