Low P/E Ratio Bargain Stocks

By www.ProfitableInvestingTips.com
Low P/E Ratio Bargain Stocks

http://profitableinvestingtips.com/stock-investing/low-pe-ratio-bargain-stocks
Despite the fact that the S&P 500 is
trading at twenty times earnings there
are still bargain stocks.

Ignore Amazon which has gone up
115% this year and Netflix which has
gone up 151%.

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Look for low P/E ratio bargain stocks
with room to grow.

This is exactly what USA Today has
done and reported in its article
about stocks that are still dirt
cheap.

Eight stocks in the Standard & Poor’s
500 index, including Goodyear Tire &
Rubber (GT), oil refiner Valero Energy
(VLO) and food processor Mondelez
(MDLZ) have jumped 15% or more
this year and are still dirt cheap
compared with the market, according
to a USA TODAY analysis of data from
S&P Capital IQ.

Each of these stocks is trading for less
than 11 times their diluted earnings
over the past 12 months.

Compare that with the S&P 500, which
is trading for an above-average 20
times earnings the past 12 months,
according to S&P Dow Jones Indices.

This is the complete list for S&P 500
stocks with promising growth and low
P/E ratios.

Listed are the company name, stock
symbol, P/E ratio and year to date
growth.

Company Symbol Price to Earnings Ratio Year to
Date Growth
Goodyear Tire & Rubber GT 3.3%
19.5%
Valero Energy VLO 7.6%
47.1%
Mondelez MDLZ 8.6%
21.1%
Marathon Petroleum MPC 8.9%
25.9%
Tesoro TSO 8.9%
57.6%
First Solar FSLR 9.7%
24%
LyondellBasell LYB 10.1%
20.6%
Phillips 66 PSX 10.8%
28.6%

Rather than betting that Amazon.com
with a P/E ratio of around 900 will
continue to grow at the same pace,
consider some of these low P/E ratio
bargain stocks.

P/E Ratio and Not Price

Please notice that we are not
suggesting cheap or penny stocks.
We wrote about that issue just two
weeks ago.

It is the mistaken belief of naive
investors that these stocks have
nowhere to go but up.

If you have unique insight into the
company you may know something
that stock analysts do not. This can be
very profitable.

If you do not have any special insight
into the stock you may be in for a rude
awakening when the stock that sold
for pennies now is out of business.

The point of watching the P/E ratio is
that a company needs to be running a
profit in order to have a P/E ratio at all.

And if it has a higher P/E ratio it
indicates that the market has not yet
bid up the stock price to unsustainable
levels.

But, Beware of Debt

When we wrote about the risk of
higher interest rates we noted that
there has been a flight to quality, and
less debt.

Companies with a lot of debt will get
hurt as interest rates rise.

The recent mini rally has put the U.S.
stock market back on track, right?

Maybe that is not the case.
Companies with investment grade
credit rating are being bid up and
those with worse credit and seen as at
risk are in decline.

So, while you are looking at low P/E
ratio bargain stocks read the financials
and make sure that the company is
not deeply in debt.

Otherwise, buy growing companies
with low P/E ratios and avoid
companies that are bound to correct
from unsustainable price levels.

Low P/E Ratio Bargain Stocks

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Low P/E Ratio Bargain Stocks