Weekly Stock Sale – New Value Opportunities April 27, 2014

What stocks are on sale this week? One method to try to answer this question is to look for stocks that recently started trading below a Price to Earnings (PE) ratio of 12.5.  Why 12.5?  A PE of 12.5 is the same as an earnings yield of 8%, which provides a decent return given an approximately 3% nominal return on a 5% equity risk premium. That still rather arbitrary, but it is still helpful to draw a line in the sand.

Sale tagI screen the list of U.S. stocks with a market capitalization of at least $500 million. I then looked for stocks currently trading with a PE below 12.5, but in the previous week had a PE above 12.5 using the Portfolio123 stock screener.  Here’s the list:

  • Campany: PE % change & Current PE including extraordinary items
  • Taubman Centers Inc. (TCO): -77% 10.25
  • Washington Real Estate Investment Trust (WRE): -72% 11.98
  • West Corp (WSTC): -25% 11.30
  • Honda Motor Co Ltd (HMC): -24% 10.65
  • Meritage Homes Corp (MTH): -17% 10.81
  • Avnet Inc. (AVT): -12% 12.31
  • Hawaiian Holdings Inc. (HA): -10% 12.38
  • Alaska Air Group Inc. (ALK): -10% 11.66
  • Dow Chemical (DOW): -9% 12.31
  • International Bancshares Corp. (IBOC): -3% 12.22
  • National Presto Industries (NPK): -2% 12.43

Real estate is generally a great investment option. It can generate ongoing passive income and can be a good long-term investment if the value increases over time. You may even use it as a part of your overall strategy to begin building wealth.

However, you need to make sure you are ready to start investing in real estate. For one, you will need to put down a significant amount of money upfront to begin real estate investing, Woodleigh Residences Floor plan is one of the most popular properties to investing in. Buying a home, apartment complex, or piece of land can be expensive. That’s not to mention the ongoing maintenance costs you’ll be responsible for, as well as the potential for income gaps if you are between tenants for a time.

See any interesting opportunities in this list? Share your thoughts in the comments section below.  Also, please let me know if you would like to see this list weekly in the future.

2 thoughts on “Weekly Stock Sale – New Value Opportunities April 27, 2014

  • April 28, 2014 at 10:01 am

    Nothing really interesting. But I think the theme of Japanese stocks is worth study. Having problems getting info tho…


  • April 28, 2014 at 12:05 pm

    Thanks for the feedback, Victor. I haven’t looked at Japanese stocks in quite some time. Maybe it is time to revisit that market potential.

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