There are a lot of cheap stocks out there, but I wanted to find a list of some of the cheapest that were large enough for just about any investor to consider buying. All of the stocks on the list below have Market Capitalizations of more than $6 billion (I screened for $5 billion but all were more than $6 billion).
To make sure they had solid balance sheets, I required that debt be no more than 50% of total capital, and to make sure that earnings were not in the process of totally falling apart, I also removed any stock with a Zacks rank of #4 or #5 (Sell or Strong Sell). Most of the companies on the list are based overseas, but most have substantial U.S. operations.
It is not exactly a list that constitutes a closet index, as it has many Health Care and Energy firms and a few Financials but only one tech company and one Basic Materials name. Two of the firms, BP (BP) and Transocean (RIG), have very large contingent liabilities from the Deepwater Horizon oil spill, and several of the health care names are drug companies with lots of drugs that will be coming off patent in a few years. Thus they might be cheap for a reason, but they are cheap.
Not only on earnings for this year and next, but 7 of the 18 firms on the list are selling below book value, and eight have dividend yields of more than 2%. If you are a patient value-investor type, this list might be a good place to start looking more closely.
|Company||Ticker||P/E using Curr FY Est||P/E using Next FY Est||Div Yield||Price/ Book|
|Anglo Amer -Plc||AAUKY||5.58||4.13||0.00%||1.98|
|Annaly Cap Mgmt||NLY||6.76||6.46||15.13%||1.06|
|Forest Labs A||FRX||7.7||7.07||0.00%||1.79|
|Xl Group Plc||XL||7.69||7.13||2.24%||0.61|
ASTRAZENECA PLC (AZN): Free Stock Analysis Report
BP PLC (BP): Free Stock Analysis Report
PFIZER INC (PFE): Free Stock Analysis Report
CHINA PETRO&CHM (SNP): Free Stock Analysis Report
SANOFI-AVENTIS (SNY): Free Stock Analysis Report