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By Matt Doiron

The forward price-to-earnings multiple compares a stock's price to analyst forecasts of earnings per share for the forward fiscal year, and therefore serves as a value metric which takes into account a company's potential to improve in the future. While analyst expectations often misfire, we can further hone low P/E stocks by identifying those which have recently beaten analyst estimates. There's no guarantee that these companies will do the same going forward, but this at least indicates that analysts have underestimated earnings in the past- and that another earnings beat could further suggest that the company should at least match performance for next year. Using data from Fidelity, here are five stocks with market capitalizations of at least $2 billion which carry forward earnings multiples of 10 or lower and which have reported at least a 50% earnings surprise in the last 90 days:

Wall Street analysts had been expecting Delta Air Lines (NYSE:DAL) to earn 6 cents per share in Q1 2013, but the company ended up reporting adjusted EPS of 10 cents. Current forecasts imply that the airline is valued at a cheap multiple in terms of forward earnings estimates, as many investors shun airlines even as the industry has performed well in the market over the last year and US Airways's merger with American offers the potential to consolidate the industry. According to our database of hedge funds' quarterly 13F filings (which we track as part of our work on investment strategies, including our finding that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year), billionaire David Tepper's Appaloosa Management owned 9.8 million shares of Delta at the end of March (find Tepper's favorite stocks).

Humana (NYSE:HUM) beat expectations by a double-digit percentage for the third quarter in a row, and with markets not liking health insurers very much either (partially due to concerns over future government regulation of the industry) the stock trades at 10 times consensus earnings for 2014. The $12 billion market cap company's revenue grew by 3% in its last quarterly report compared to the first quarter of 2012. Glenview Capital, managed by Larry Robbins, more than doubled its holdings of Humana between January and March to a total of nearly 4 million shares (see Glenview's stock picks).

Another company which has been beating expectations recently- it recorded 56 cents in EPS in its last quarterly report against a forecast of 37 cents- is Teck Resources (NYSE:TCK). Teck produces industrial metals including copper, zinc, and metallurgical coal. At current prices the stock pays a 4% dividend yield, though we'd note that its business is highly correlated with the overall economy (the beta is 2.5) and in fact the dividend was temporarily suspended following the financial crisis. The forward P/E here is 9; it might be worth comparing to Freeport-McMoRan Copper & Gold.

Following a more than 90% rise in the last year, Avis Budget Group (NASDAQ:CAR) is still valued at only 10 times expected earnings for 2014; the sell-side expects continued growth beyond that point, and as a result the five-year PEG ratio is well below 1. Its most recent quarterly report showed 8 cents in adjusted EPS, beating expectations of 2 cents. We'd note that as with airlines there's potential for industry consolidation here as Hertz acquires Dollar Thrifty, though investors should be confident in the macro situation as well with Avis Budget's beta being 2.8.

Rounding out our list is Cliffs Natural Resources (NYSE:CLF), as the iron ore and metallurgical coal producer reversed a streak of earnings misses by delivering adjusted EPS of 60 cents per share in the first quarter of 2013. The stock is down 67% in the last year, and 32% of the float is held short as of the most recent data. Revenue and earnings were both down in its most recent quarter compared to the same period in the previous year as the steel industry (the source of demand for both iron ore and met coal) continues to be weak. Cliffs features a forward earnings multiple of 9.

Source: These 5 Low P/E Stocks Could Pop If They Beat Earnings Again