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Even with the major stock indexes continuing to hit all-time highs, there’s a lot of cheap stocks out there.

How could that be after the big rally in the last year?

While the “P” in the P/E ratio is on the rise, so is the “E.”

Earnings are expected to be at a record high this year and next year. That’s keeping valuations in check.

Screening for Top Stocks That are Dirt Cheap

It’s easy to find cheap stocks but to find quality cheap stocks, use the Zacks Rank.

Screening for Zacks Rank #1 (Strong Buy) and #2 (Buy) stocks should provide a list of companies with rising earnings estimates.

To find classic cheap stocks, you can screen with the basic value fundamental of price-to-earnings (P/E) ratio of under 10.

A single-digit P/E has always historically been cheap.

But **warning**.

There is sometimes a reason for a dirt-cheap valuation. Make sure you do your homework on all companies.

If it sounds too good to be true, it usually is.

This screen returned 228 stocks.

5 Top Stocks with P/Es under 10

1. Whiting Petroleum (WLL - Free Report) is trading with a forward P/E of just 4.1 as shares are up just 4% over the last 3 months even as earnings have risen. The energy stocks have rallied big off their 2020 lows, and so have the earnings estimates. This Rocky Mountain explorer and producer is expected to make $11.38 per share this year.

2. M/I Homes (MHO - Free Report), a homebuilder with a $2 billion market cap, has a forward P/E of only 4.6 even though earnings are expected to rise 63% this year and another 8% next year. The Street thinks that new housing demand, and therefore sales, have peaked but home demand just keeps on growing.

3. Group 1 Automotive, Inc. (GPI - Free Report) trades with a forward P/E of just 5.4. This auto retailer with dealerships in the United Kingdom, the United States and Brazil, is expected to grow earning by 71% in 2021 but analysts believe this could be peak earnings as they have forecasted a decline of 20% in 2022.

4. Flagstar Bancorp, Inc. (FBC - Free Report) is both a regional Michigan-based bank and a national mortgage lender. It trades with a forward P/E of just 5.9. However, analysts believe 2020 was peak earnings as the Zacks Consensus expects earnings to decline 11.9% this year and another 30% in 2022. Is it a value trap?

5. Macy’s (M - Free Report) remains dirt cheap even though the shares are up about 100% in 2021. It trades with a forward P/E of just 6 as earnings are expected to jump 268% this year. But what will happen next year, after the recovery takes hold?