New Value Opportunities Selling below PE 12.5 May 12, 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 this week’s list:

Company Ticker PE % change Current PE including extraordinary items
 St. Joe Co (The)  JOE  -98.84%  4.46
 New Jersey Resources Corp  NJR  -66.37%  11.06
 Global Partners LP  GLP  -65.96%  9.67
 DepoMed Inc.  DEPO  -50.78%  9.27
 Voya Financial Inc  VOYA  -45.50%  8.49
 Marathon Oil Corp  MRO  -32.11%  10.00
 Realogy Holdings Corp  RLGY  -18.87%  11.69
 Nu Skin Enterprises Inc.  NUS  -15.61%  12.44
 TransGlobe Energy Corp  TGA  -15.37%  11.79
 Navigators Group Inc (The)  NAVG  -13.03%  11.11
 Abraxas Petroleum Corp.  AXAS  -10.23%  11.87
 Altisource Residential Corp  RESI  -8.91%  12.21
 Kelly Services Inc.  KELYA  -8.73%  12.43
 GameStop Corp.  GME  -8.42%  12.11
 Brocade Communications Systems Inc  BRCD  -8.35%  11.94
 Green Plains Renewable Energy Inc  GPRE  -7.66%  12.17
 Hawaiian Holdings Inc.  HA  -6.10%  11.99
 CVR Energy Inc  CVI  -4.86%  12.02
 Ferro Corp.  FOE  -4.48%  12.14
 Walker & Dunlop Inc  WD  -4.23%  12.36
 Murphy Oil Corp  MUR  -1.98%  12.30
 Anworth Mortgage Asset Corp  ANH  -1.85%  12.35

See any interesting value stocks 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.

One thought on “New Value Opportunities Selling below PE 12.5 May 12, 2014

  • May 12, 2014 at 11:11 am

    Earnings can jump around alot from quarter to quarter meaning that many names on a list such as this will tend to pop in and out rather randomly.

    P/E is also not the greatest indicator in the world when it comes to stock selection. P/FCF is better in many ways.

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