Kevin Matras shows you how to find cheap stocks (as in bargains). Stocks in this week’s article are The Children's Place Retail Stores, Inc. (NASDAQ: PLCE), GeoResources, Inc. (NASDAQ: GEOI), G-III Apparel Group, Ltd. (NASDAQ: GIII), Hot Topic, Inc. (NASDAQ: HOTT) and Pegasystems, Inc. (NASDAQ: PEGA). Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=109.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
Whether we've hit the market bottom already or not, the market is downright cheap. P/E ratios for companies in the S&P 500 are near their lowest levels in 5 years.
In fact, the median P/E ratios are currently 56.2% below their 5-Year High and 38.2% below their 5-Year Median. This coincides with the market recently hitting its lowest price levels in a little over 5 years.
Moreover, in looking at the 10 worst market declines from the 1929 crash to present, the average bear market drop has been -42.8%. With the current bear market having dropped -44.4% already, this puts us pretty much at the bottom of the average historical bear market low.
So what to do?
I'm running screens right now that are showing solid earnings forecasts, growth rates better than their 5-Year Average and P/Es trading more than 40% below their 5-Year Average.
- Est. EPS Growth Rate F(1)/F(0) greater than or equal to 5 Yr. Avg. Historical Growth Rate
- PE / 5 Yr. Avg. PE less than or equal to .60 (i.e., PEs more than 40% below their 5 Yr. avg.)
- Zacks Rank less than or equal to 2 (Only Strong Buys and Buys allowed)
Here are 5 stocks from this week’s list:
| PLCE | Children's Place Retail Stores | |||
| GEOI | GeoResources, Inc. | |||
| GIII | G-III Apparel Group | |||
| HOTT | Hot Topic, Inc. | |||
| PEGA | Pegasystems, Inc. |
See what other stocks are coming thru this screen or put your own ideas to the test. You can do it. Sign up now for your free trial to the Research Wizard and start building your dream portfolio today: http://at.zacks.com/?id=111.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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