It’s funny how valuation metrics seem to go in and out of favor like fashion sometimes. A perfect example of this is the price/sales ratio. We haven’t heard anyone referencing a company’s P/S ratio in quite sometime but still that doesn’t mean it’s useless. In addition, this ratio is pretty straightforward because all it does is value every dollar of the company's sales against the price of the stock. In a simplified version the lower the ratio, the more attractive the investment should be.
We ran a screen for companies that appear undervalued by their P/S ratio (X<1). From this narrowed pool we then screened for companies that have sound liquidity (current ratio>1).
The list is ranked from lowest to highest by the price/sales ratio:
1. Sunoco, Inc. (SUN)
Sector | Energy |
Industry | Oil and Gas Refining and Marketing |
Market Cap | $4116 million |
Beta | 0.43 |
Analyst Sentiment | 8/14-List Hold/Neutral (Neutral) |
The company refines and sells petroleum products, and manufactures chemicals in the US. SUN’s P/S ratio is 0.1. The company’s current ratio is 1.05. The short interest for the company is 8% as of 8/15/2011.
2. Tesoro Corporation (TSO)
Sector | Energy |
Industry | Oil and Gas Refining and Marketing |
Market Cap | $2757 million |
Beta | 1.2 |
Analyst Sentiment | 9/18-List Hold/Neutral (Neutral) |
The company refines and sells petroleum products in the United States. TSO’s P/S ratio is 0.11. The company’s current ratio is 1.4. The short interest for the company is 15.20% as of 8/15/2011.
3. Valero Energy Corporation (VLO)
Sector | Energy |
Industry | Oil and Gas Refining and Marketing |
Market Cap | $10768 million |
Beta | 1.08 |
Analyst Sentiment | 10/19-List Hold/Neutral (Neutral) |
The company operates as an independent petroleum refiner. VLO’s P/S ratio is 0.11. The company’s current ratio is 1.44. The short interest for the company is 2% as of 8/15/2011.
4. Delek US Holdings, Inc. (DK)
Sector | Energy |
Industry | Oil and Gas Refining and Marketing |
Market Cap | $770 million |
Beta | 0.75 |
Analyst Sentiment | 4/7-List Hold/Neutral (Neutral) |
The company refines and sells petroleum products in the United States. DK’s P/S ratio is 0.15. The company’s current ratio is 1.53. The short interest for the company is 16% as of 8/15/2011.
5. Western Refining Inc (WNR)
Sector | Energy |
Industry | Oil and Gas Refining and Marketing |
Market Cap | $1405 million |
Beta | 0.54 |
Analyst Sentiment | 5/9-List Buy/Outperform (Bullish) |
The company is an independent crude oil refiner and sells products in the US. WNR’s P/S ratio is 0.18. The company’s current ratio is 1.92. The short interest for the company is 0.32 as of 8/15/2011.
6. Marathon Oil Corp (MRO)
Sector | Energy |
Industry | Oil and Gas Integrated |
Market Cap | $17972 million |
Beta | 1.19 |
Analyst Sentiment | 10/22-List Hold/Neutral (Neutral) |
The company operates gas and oil assets around the world. MRO’s P/S ratio is 0.24. The company’s current ratio is 1.76. The short interest for the company is 2% as of 8/15/2011.
7. Calumet Specialty Products Par (CLMT)
Sector | Energy |
Industry | Oil and Gas Midstream |
Market Cap | $774 million |
Beta | 0.2 |
Analyst Sentiment | 3/3-List Hold/Neutral (Neutral) |
The company produces and sells specialty hydrocarbon products. CLMT’s P/S ratio is 0.28. The company’s current ratio is 1.21. The short interest for the company is 1.50% as of 8/15/2011.
8. Plains All American Pipeline (PAA)
Sector | Energy |
Industry | Oil and Gas Midstream |
Market Cap | $8708 million |
Beta | 0.41 |
Analyst Sentiment | 11/17-List Buy/Outperform (Bullish) |
The company transports, stores, and sells crude oil along with other products in the US. PAA’s P/S ratio is 0.28. The company’s current ratio is 1.16. The short interest for the company is 1% as of 8/15/2011.
9. Ultrapar Holdings Inc (UGP)
Sector | Energy |
Industry | Oil and Gas Refining and Marketing |
Market Cap | $9271 million |
Beta | 0.97 |
Analyst Sentiment | 3/6-List Hold/Neutral (Neutral) |
The company distributes liquefied light fuel, petroleum gas, and lubricants. UGP’s P/S ratio is 0.32. The company’s current ratio is 2.31. The short interest for the company is N/A as of 8/15/2011.
10. Murphy Oil Corporation (MUR)
Sector | Energy |
Industry | Oil and Gas Integrated |
Market Cap | 9422 million |
Beta | 1.13 |
Analyst Sentiment | 10/15-List Hold/Neutral (Neutral) |
The company operates oil and gas properties worldwide. MUR’s P/S ratio is 0.33. The company’s current ratio is 1.26. The short interest for the company is 2% as of 8/15/2011.
We hope this list helps as investors do their own due diligence on energy companies that appear cheap according to their P/S ratio.
