3 stock picks with a low Shiller price-earnings ratio

Selecting stocks with compelling Shiller price / earnings ratios increases the likelihood of identifying value opportunities, in my opinion. So investors may want to consider the following companies because their Shiller price-to-earnings ratios are below the S&P 500 index’s historic average of 16.81 as of Friday, April 9.

Virtu Financial Inc

The first company to consider is Virtu Financial Inc (NASDAQ: VIRT), a New York-based financial services firm that provides global financial markets with market-making and liquidity services through its own multi-asset technology platform. and monetary.

The company has a Shiller price-to-earnings ratio of 13.22, which results from a stock price of $ 30.94 as of April 9 and an inflation-adjusted average earnings per share in 10. years of $ 2.34 in the December 2020 quarter. The industry has a median of 19.44 for Shiller’s price-to-earnings ratio.

The stock price has risen 27.50% over the past year to a market cap of $ 5.95 billion and a 52-week range of $ 20.93 to $ 32.35.

GuruFocus gave a rating of 4 out of 10 for the company’s financial strength rating and 7 out of 10 for its profitability rating.

On Wall Street in April, the stock has a median overweight recommendation rating with an average target price of $ 31.27 per share.

PennyMac Financial Services Inc

The second company investors should consider is PennyMac Financial Services Inc (NYSE: PFSI), a mortgage banking and investment management provider based in Westlake Village, California.

The company has a Shiller price-to-earnings ratio of 10.69. The ratio is the result of a stock price of $ 58.68 as of April 9 and a 10-year inflation-adjusted average earnings of $ 5.49 in the December 2020 quarter. industry has a median of 13.65 for Shiller’s price-to-earnings ratio.

The stock price has risen 120.52% over the past year, determining a market cap of $ 4.06 billion and a 52-week range of $ 18.22 to $ 70.99.

GuruFocus gave a score of 2 out of 10 for the financial strength of the company and 8 out of 10 for its profitability.

On Wall Street in April, the stock has a median overweight recommendation rating with an average target price of $ 84.13 per share.

Enova International Inc

The third company considered is Enova International Inc (NYSE: ENVA), a Chicago-based provider of various personal, commercial and bank credit services in North America, Brazil and Australia.

The company has a Shiller price-to-earnings ratio of 12.25. The ratio is the result of a share price of $ 34.42 as of April 9 and a 10-year inflation-adjusted average earnings of $ 2.81 in the December 2020 quarter. industry has a median of 11.42 for Shiller’s price-to-earnings ratio.

The share price has risen 138% over the past year, determining a market cap of $ 1.26 billion and a 52-week range of $ 9.43 to $ 41.06.

GuruFocus gave a score of 5 out of 10 for the financial strength of the company and 8 out of 10 for its profitability.

On Wall Street in April, the stock has a median buy recommendation rating with an average target price of $ 40.25 per share.

Disclosure: I have no position on the titles mentioned in this article.

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About the Author:

Alberto Abaterusso

I am a contributor at GuruFocus. I mainly write about how to pick potential value stocks. The gold, silver and precious metals mining industries are also my cup of tea. My articles have also been widely linked from popular sites including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters, and others. I have a master’s degree in business administration from the Università degli Studi di Bari (Italy), Aldo Moro. I am based in the Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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