Quick Roundup of Top Five Undervalued Stocks of Services Sector; PEG Ratio Analysis – AMZN, SPLS, DISH, CTRP, URI

  on Dec 24,2012 Posted in Finance ,Investment Ideas
 
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Price/Earnings to Growth ratio show the link between security price, EPS and the firm’s projected growth rate.

This ratio consists of the price to earnings ratio divided by the firm’s growth rate. If investors use just PE ratio so it makes high-growth corporations overvalued in relation to others.

The PEG ratio permits investors to accurately evaluate companies with different PE ratios and growth rate companies by dividing PE ratio of a stock by its earnings growth rate.

A stock with PEG ratio lower than 1 is considered undervalued while a stock with a PEG ratio near 1 is considered fairly valued. On the other hand a stock with PEG ratio over 1 is considered overvalued. In this article we will discuss Undervalued stocks of services sector with market average market volume over two million.

Amazon.com, Inc (NASDAQ:AMZN), world’s biggest online retail store, has the market capitalization of 116.37 billion while its P/E ratio was 3433.84. The price to earning to growth ratio was recorded as 3670.29, which is too high in this sector and stock is considered as undervalued. The company Seattle, Washington based company has net profit margin of 0.28% while its gross profit margin was 23.74%. Shares of the company were moving ahead of 20 days simple moving average with 2.25%.

Staples, Inc (NASDAQ:SPLS) has price to earnings ratio of 460.46 while its PEG ratio was 61.10 lower than AMZN. The Framingham, Massachusetts based company has 673.88 million shares outstanding while it offers EPS of $0.03. The Institutional ownership of the company was 97%. The company earned $32.92 million in previous 12 months.

DISH Network Corp (NASDAQ:DISH) has market capitalization of 16.05 billion while its Price to earnings ratio was 21.57. The Englewood, Colorado based Dish offered EPS of 1.65 while its 451.43 million shares were outstanding. The PEG ratio of DISH was 8.98 while its P/S ratio was 1.12. The ROE ratio was booked as 701.92%. In the liquidity analysis, current ratio was 2.01 while quick ratio was 1.86.

Ctrip.com International, Ltd (ADR) (NASDAQ:CTRP) offered the $0.85 EPS while its beta factor, which is used to measure growth, was 1.59. The company has market capitalization of 3.14 billion. The corporation has PEG ratio of 6.57 while price to sale ratio was 5.09.

United Rentals, Inc (NYSE:URI) has market capitalization of 4.15 billion while its P/E ratio was 64.58. The company has the institutional ownership of 114% while its Beta, which is used as a measure of a stock’s volatility in relation to the market, was 2.42. The PEG ratio of the company was 5.41 while P/S ratio was 1.16. Shares of the company were moving ahead of SMA 50 with 11.84% while SMA 20 with 5.51%.

Disclosure: The views and opinions expressed in this article are exclusively those of the authors who have no stake in any stocks mentioned, and hold no plan to acquire any stake within the next 5 days.

 



 

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