3 Low Price-Free Cash Flow Ratio Stock Picks

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– By Alberto Abaterusso

When screening the market for value opportunities, one method is to choose stocks whose trailing 12-month price-to-free cash flow ratios are low compared to that of the S&P 500 Index, which stands at around 10.93 currently.

Thus, investors could be interested in the following stocks as they meet the above criteria and are recommended by sell-side analysts on Wall Street.

MiX Telematics

The first stock to consider is MiX Telematics Ltd. (NYSE:MIXT), a Boca Raton, Florida-based provider of software application solutions for fleet and mobile asset management.

MiX Telematics’ price-to-free cash flow ratio is 10.65 as of March 22, ranking higher than 83% of 1,333 companies that operate in the software industry.

MiX Telematics’ free cash flow per share for the trailing 12 months ended in December stood at $1.26, growing 226.20% over the past year.

As a result of a 78.3% increase that occured over the past year, the stock closed at $13.46 per share on Monday for a market capitalization of $298.94 million and a 52-week range of $7 to $15.

3 Low Price-Free Cash Flow Ratio Stock Picks

Currently, MiX Telematics is paying quarterly dividends to its shareholders, with the most recent payment of 6.8 cents per common share issued on March 4. The payment produces a trailing 12-month dividend yield of 1.83% as of March 22.

GuruFocus assigned a score of 8 out of 10 to the company’s financial strength and 9 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $18.50 per share.

Civeo

The second stock investors may want to consider is Civeo Corp. (NYSE:CVEO), a Houston-based provider of accommodations to workforces in the natural resource industry in North America and Australia.

Civeo’s price-to-free cash flow ratio is 2.07 as of March 22, ranking higher than 94% of 662 companies that operate in the business services industry.

The company’s free cash flow per share for the trailing 12 months stood at $7.58. The free cash flow increased by 136.60% over the past year.

As a result of a nearly 215% increase that occurred over the past year, the stock traded at $15.68 per share on Monday for a market capitalization of $224.01 million and a 52-week range of $4.08 to $20.67.

3 Low Price-Free Cash Flow Ratio Stock Picks

Currently, Civeo does not pay a dividend.

GuruFocus assigned a score of 3 out of 10 to the company’s financial strength and 2 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $30 per share.

Salem Media Group

The third stock to consider is Salem Media Group Inc. (NASDAQ:SALM), an Irving, Texas-based multimedia operator.

Salem Media Group’s price-to-free cash flow ratio is 4.66 as of March 22, ranking higher than 84% of 557 companies that operate in the media-diversified industry.

The company’s free cash flow per share for the trailing 12 months was 67 cents. The free cash flow increased by 95.40% over the past year.

Thanks to a 208.4% increase over the past year, the stock was trading at $3.12 per share at close on Monday for a market capitalization of $83.63 million and a 52-week range of $0.69 to $3.95.

3 Low Price-Free Cash Flow Ratio Stock Picks

Currently, Salem Media Group is not paying dividends. Due to the Covid-19 pandemic, the board of directors decided to temporarily suspend the distribution, but may reinstate it this year.

GuruFocus assigned a score of 3 out of 10 to the company’s financial strength and 5 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $4.13 per share.

Disclosure: I have no positions in any securities mentioned.

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This article first appeared on GuruFocus.