4 Bargain Stocks With Low PE Ratios

The stock market has been beaten down to the point where people are selling and not asking questions. Multiples have been taken out of the high flying momentum stocks across the board. The stocks that typically have low PE Ratios, well they are even ridiculously lower.

Is the selling justified? Is the fear warranted? Do people have 2008 fresh in their minds and just can’t afford to take that risk again? No simple answers there, but what we do know is that people are going to react to what is in front of them.  And right now, there is only red numbers on their screens.

This panic currently being created allows opportunity to the patient investor.  As I’ve mentioned before, investors need to start making a wish list of stocks to buy.  Part of that list should include low PE stocks that create long-term value for a portfolio.

In order to find what we are looking for I did a stock screen using Zack stock screener.  Using the filter, I screened for Zacks #1 stocks, stocks with a Value score with “A”, and stocks with a PE ratio under 10. I was able to narrow it down to four individual stocks to add to that market bounce wish list.  

Cooper Tire (CTB - Analyst Report) is a Zacks Rank #1(Strong Buy) that manufactures and markets replacement tires around the globe. Founded in Findlay, Ohio in 1913, Cooper distributes tires for passenger cars and trucks as well as tires for racing, motorcycles, dealers and retailers.

The company has a market cap of $2 Billion and a Forward PE just under 10 and pays a 1.23% dividend and expects EPS growth to come in at 3%. Cooper sports a Zacks Style Score of “A” in Value.

The stock has been punished over the last three months more than a value stock should be punished. Cooper was down 20% at one point versus the S&P 500 being down 12%.This situation creates an opportunity where long term players can win with either market bounce, or when long-term value is realized.

The company reports earnings on the 23rd and there are hopeful signs that Copper and the stock can see a turn around. Consensus estimates have been rising over the last 60 days, for both the current quarter and fiscal year 2016. In addition, the last two quarters were met with an EPS surprise to the upside; a third should help get back a lot of what was lost over the last couple months.

Coopers peer Goodyear Tire (GT - Analyst Report) is also a Zacks Rank #1(Strong Buy) and reported earnings yesterday. The company beat handily and caused Goodyear’s stock to shoot up 4% higher. Cooper was up 2.5% in sympathy. Any more price pressure should create a nice value opportunity in Cooper leading into earnings.

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