Hedge Funds' view on cheap stocks?: EV/Sales<0.2, EV/EBITDA < 2

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Rank: Monkey | 42

Curious about hedge funds' view on 'cheap' tech stocks. Used a basic stock screener to screen out the 'cheapest' technology stock and got this: CRTO
Market Cap: $647M
Enterprise Value: $304M
Revenue: $2,262M
EBITDA: $238M
Net Income: $91M
FCF: $125M (after re-purchasing $59M of common stock)

Which means:
EV/Sales: 0.13x
EV/EBITDA: 1.3x
EV/FCF: 2.4x (if not for re-purchase of common stock: 1.7x)
PE: 7.1x

Sounds really cheap especially for a stock in the tech sector. Did some basic research and saw that the company is facing some issues regarding cookies.. but at that price and the company having large established clients, what gives? There may be other such companies around, but I'm curious what industry experts typically think of companies like this?

Comments (3)

Mar 6, 2020

It's a HF they're looking for Alpha with a catalyst. Not every fund is trying to turn a business around or invest in the long term. Thy take their profit and move on. I.e the tech bubble, financials around the 2008-2010 period, etc.

Mar 7, 2020

Criteo is pretty risky atm. You're correct re: cookies. Pretty big fucking risk when your business is all retargeting lol

Mar 7, 2020
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