Santos Ltd
Shares in Santos Ltd (ASX: STO) have been weaker in recent days, with the resources company reporting a full-year net loss of $935 million as a declining oil price has hit its income statement very hard. And, in response, Santos is attempting to take as much pressure as possible off its balance sheet, with the company now considering the sale of a $6 billion gas pipeline in Queensland.
Of course, Santos' future looks to be highly uncertain and the sales of other assets cannot be ruled out, either. However, for long term investors now could be a great time to buy a slice of it. That's because its current valuation appears to adequately take into account future difficulties, with Santos' price to book (P/B) ratio of just 0.85 indicating that it offers a wide margin of safety at its current price level.
Rio Tinto Limited
Also offering a wide margin of safety is Rio Tinto Limited (ASX: RIO). It trades on a price to sales (P/S) ratio of just 0.48, which is low on an absolute basis, but is even more appealing when it is compared to the wider index and to the wider materials sector.
That's because they have P/S ratios of 1.6 and 2.5 respectively and, with Rio Tinto having such a strong track record when it comes to its finances, that seems to be a very enticing price to pay for a slice of the business. For example, in the last five years Rio Tinto has been able to increase cash flow per share at an annualised rate of 47.1% which, when you consider the challenging nature of the mining sector during that time, is an excellent result.
CSL Limited
With the future of the ASX being so uncertain, low beta stocks could see investor demand for them increase over the medium to long term. That's partly why CSL Limited (ASX: CSL) is appealing right now, since it has a beta of just 0.6 and this means that its shares should (in theory) move by just 0.6% for every 1% move in the ASX. As a result, CSL's lower volatility experience could attract new investors to the stock.
CSL also has a strong track record of top line growth (sales have risen at an annualised rate of 11% during the last 10 years), which means it could be a consistent and profitable long term investment.
