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With the massive market run up today, I tried to find some stocks that may have been left behind over the past year's bull market. I wanted to find stocks trading at low valuations that were still generating huge returns for the shareholders, so I searched for low P/E stocks with high ROEs. To do this, I started by taking the S&P 500 and ranking each stock on their P/E, with the lowest P/E stock receiving a one, the next lowest a two, etc. Then I sorted the S&P by ROE and ranked the stocks by highest to lowest P/E. I finished by adding up the two scores for each stock and sorting the sum from lowest to highest. The results are below.

Ticker Company P/E (TTM) ROE (TTM) PE Rank ROE Rank Overall Rank
TER TERADYNE INC 7.67 43.47 8 28 1
LMT LOCKHEED MARTIN 9.08 74.41 29 12 2
LLY ELI LILLY & CO 7.88 39.98 12 36 3
FCX FREEPORT-MCMORAN 9.30 46.51 33 22 4
DELL DELL INC 9.34 45.47 36 24 5
LUK LEUCADIA NATL 4.82 30.66 1 63 6
CLF CLIFFS NATURAL R 8.80 38.46 23 42 7
GCI GANNETT CO 5.86 28.19 2 75 8
MSFT MICROSOFT CORP 9.93 43.96 57 26 9
APOL APOLLO GROUP-A 8.15 29.51 17 68 10

This is certainly an impressive list. Despite an average ROE of over 42%, the average P/E is barely above 8. Put another way, despite all of the companies rank in the top 15% of the S&P 500 for ROE, they are all within the top 12% in terms of lowest P/E.

Some of the companies, like Gannett or Eli Lilly, are in declining businesses or face huge patent losses that could lead to declines in revenues and profits in the near future. Some, like Apollo and Lockheed Martin, face huge regulatory head winds. And some, like Teradyne, are in notoriously cyclical businesses that may be at the top of their earnings cycle.

But even if you think none of those companies represent great value (pretty unlikely), there's still plenty to like on this list.

Freeport and Cliffs should have huge earnings tailwinds in the coming years, as booming demand for natural resources in emerging markets drives commodity prices (and their stock prices!) higher. With both trading under ten times trailing earnings and eight times forward earnings, the shares certainly look like bargains.

Microsoft and Dell are two of the greatest companies in American history and both of them are still minting money. Both stocks have been depressed because of fears over rise of smartphones hurting their core consumer PC business, but at these prices, investors aren't paying much to hope the companies can overcome the threat. Even better, the threat to their core business models may be somewhat overstated. Dell derives just 1% of their operating income from their consumer PC division, and Microsoft maintains a huge moat in their operating systems and Office products. While both companies could experience revenue and profit declines if they can't figure out a way to compete in mobile and tablets, they have a long history of rising to challenges in the changing technology world.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 10 Value Stocks Generating Good Returns for Investors