Serious Money: Market Looks Cheap to Me -- 35 Stocks

Posted Jan 28th 2010 3:00PM by Sheldon Liber
Filed under: Hewlett-Packard (HPQ), eBay (EBAY), Pfizer (PFE), Wal-Mart (WMT), International Business Machines (IBM), Johnson and Johnson (JNJ), JPMorgan Chase (JPM), Abbott Laboratories (ABT), AFLAC Inc (AFL), Altria Group (MO), Archer-Daniels-Midland (ADM), Bristol-Myers Squibb (BMY), Campbell Soup (CPB), Chevron Corp (CVX), Chubb Corp (CB), ConocoPhillips (COP), CVS Corp (CVS), Darden Restaurants (DRI), Goldman Sachs Group (GS), General Mills (GIS), duPont(E.I.)deNemours (DD), Kimberly-Clark (KMB), Merck and Co (MRK), Lockheed Martin (LMT), Hasbro Inc (HAS), Serious Money, Stock Screen, S and P 500, Xcel Energy (XEL), Travelers Companies Inc. (TRV)

We frequently receive comments that the market is overpriced. Recently one of our active readers commented that the market P/E was 30, which it's not. The actual rate (S&P forecast) has been even higher at times due to the volatile market.

The average should trend closer to the long term P/E of 15.7 in the next few years. However, I have reviewed companies often covered on our site and come up with a list of 35 stocks that have price-to-earning ratios below the long-term average already. I think there are dozens of bargains regardless of the status of the overall market.

The following stock figures indicate the trailing P/E and then the forward-looking one prior to today's market open. I often use an average of the two for my own purposes. Inclusion on this list does not mean that each of these stocks is a bargain. The P/E is just the most frequently used reference point and a good place to start.

Abbott Laboratories (ABT) 15.01 / 13.0

American Electric Power (AEP) 12.6 / 11.0

AFLAC Inc (AFL) 16.12 / 9.70

Altria Group (MO) 13.15 / 11.0

Archer-Daniels-Midland (ADM) 16.53 / 11.0

Autozone (AZO) 12.69 / 11.0

Bristol-Myers Squibb (BMY) 12.72 / 11.0

Campbell Soup (CPB) 14.95 / 13.0

Chevron Corp (CVX) 11.98 / 9.70

Chubb Corp (CB) 8.41 / 9.10

ConocoPhillips (COP) 13.07 / 8.60

CVS Corp (CVS) 12.35 / 11.0

Darden Restaurants (DRI) 13.32 / 12.0

duPont (E.I.) deNemours (DD) 16.19 / 12.0

eBay (EBAY)15.17 / 14.00

EZ Corp (EZPW) 11.33 / 10.00

General Mills (GIS) GIS 14.81 / 15.0

Goldman Sachs Group (GS) 6.85 / 8.1

Hasbro (HAS) 15.4/14

Hewlett-Packard (HPQ) 15.75/11

International Business Machines (IBM) 12.62 / 11.0

Johnson and Johnson (JNJ) 13.7 / 13.00

JPMorgan Chase (JPM) 17.6 / 12

Kimberly-Clark (KMB)13.16 / 11.0

Lockheed Martin (LMT) 10.08 / 10.0

Merck and Co (MRK) 10.12 / 11.0

Noble Corp (NE) 6.68 / 7.3

Pfizer (PFE) 15.97 / 8.5

Raytheon (RTN) 11.55/10.0

Sysco (SYY) 14.84 / 14.00

Travelers Companies Inc. (TRV) 9.48 / 8.0

United Health (UNH) 10.26 / 10.0

Verizon (VZ) 12.29 / 12.0

Wal-Mart (WMT) 15.43/13.0

Xcel Energy (XEL) 14.24/13

Three of these stocks ADM, EZPW and RTN were included among the Chasing Value: 10 Stock Picks for 2010. I own a few others; the latest stock purchase being Sysco. In the coming week I will review these stocks further to see if they hold up to deeper scrutiny.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: Among the positions discussed in this post I own shares of ADM, EZPW, JNJ, MRK, RTN and Sysco.

Tags: ABT, ADM, AFL, BMY, CB, CoP, CPB, CVS, CVX, DD, DRI, ebay, EZPW, featured, GIS, GS, HAS, HPQ, IBM, JNJ, JPM, KMB, LMT, Mo, MRK, pfe, serious money, SeriousMoney, sheldon liber, SheldonLiber, TRV, WMT, XEL

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Reader Comments (Page 1 of 1)

1-28-2010 @ 9:11PM

william lindblad said...

I never said there were no bargains. I also see there is a small correction. Positive sign. It now can go higher. While many issues remain, there is nothing on my radar that can predict anything major.