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The Forward Price/Earnings Ratio is a price-multiple valuation metric that uses forecast earnings as part of its calculation. While the earnings may be an estimate, they still provide value because they illustrate the earnings expectations of analysts. If earnings are presumed to be to growing, the ratio number will be lower relative to the current P/E Ratio.

The 1-Year Fiscal Earnings Per Share Growth Rate indicates whether growth is accelerating, sporadic, steady, or declining. As well, this metric illustrates earnings growth over an extended period of time and helps identify companies whose profitability is improving or potentially deteriorating.

We ran a screen for Basic Material companies that have a Forward P/E Ratio of less than 10. From this narrowed pool, we then screened for companies that had an EPS Growth Rate (1-Year Fiscal) of at least 10% or greater.

The Forward P/E Ratio ranks the list from lowest to highest:

1. Cliffs Natural Resources Inc. (NYSE:CLF)

Sector

Basic Materials

Industry

Steel

Market Cap

$11,895M

Beta

2.52

The company produces and sells iron ore pellets in North America. The company has a Forward P/E Ratio of 5.32. CLF’s 1-Year Fiscal EPS Growth Rate is 359.51%. The short interest was N/A as of 08/15/2011.

2. Arch Coal Inc (NYSE:ACI)

Sector

Basic Materials

Industry

Coal

Market Cap

$4,360M

Beta

1.88

The company produces and sells steam and metallurgical coal. The company has a Forward P/E Ratio of 5.51. ACI’s 1-Year Fiscal EPS Growth Rate is 246.43%. The short interest was 5.00% as of 08/15/2011.

3. Vale S.A. (NYSE:VALE)

Sector

Basic Materials

Industry

Industrial Metals & Minerals

Market Cap

$146,216M

Beta

1.52

The company produces and sells iron ore (including pellets) with operations worldwide. It has a Forward P/E Ratio of 5.71. VALE’s 1-Year Fiscal EPS Growth Rate is 232.99 %. The short interest was N/A as of 08/15/2011.

4. Solutia, Inc. (NYSE:SOA)

Sector

Basic Materials

Industry

Chemicals

Market Cap

$2,067M

Beta

2.22

The company manufactures and sells a variety of performance materials and specialty chemicals all over the world. The company has a Forward P/E Ratio of 6.81. SOA’s 1-Year Fiscal EPS Growth Rate is 25.86%. The short interest was 2.60% as of 08/15/2011.

5. Reliance Steel and Aluminum (NYSE:RS)

Sector

Basic Materials

Industry

Steel

Market Cap

$3,016M

Beta

1.53

The company offers metal processing services and a variety of metal products. The company has a Forward P/E Ratio of 6.94. RS’s 1-Year Fiscal EPS Growth Rate is 29.85%. The short interest was 2.20% as of 08/15/2011.

6. Walter Energy Inc (NYSE:WLT)

Sector

Basic Materials

Industry

Coal

Market Cap

$5,679M

Beta

2.20

The company offers coal, natural gas, and other products. The company has a Forward P/E Ratio of 7.11. WLT’s 1-Year Fiscal EPS Growth Rate is 174.62%. The short interest was 4.60% as of 08/15/2011.

7. Worthington Industries (NYSE:WOR)

Sector

Basic Materials

Industry

Steel

Market Cap

$1,133M

Beta

1.51

The company is focused on processing and manufacturing steel products. The company has a Forward P/E Ratio of 7.14. WOR’s 1-Year Fiscal EPS Growth Rate is 168.42%. The short interest was 11.30% as of 08/15/2011.

8. Freeport-McMoRan Copper & Gold (NYSE:FCX)

Sector

Basic Materials

Industry

Copper

Market Cap

$42,816M

Beta

1.89

The company operates mining and smelting operations that primarily focus on copper, gold, and silver deposits. It has a Forward P/E Ratio of 7.27. FCX’s 1-Year Fiscal EPS Growth Rate is 55.97%. The short interest was N/A as of 08/15/2011.

9. POSCO (NYSE:PKX)

Sector

Basic Materials

Industry

Steel

Market Cap

$30,545M

Beta

1.72

The company manufactures and sells a variety of steel products. It has a Forward P/E Ratio of 7.35. PKX’s 1-Year Fiscal EPS Growth Rate is 29.29%. The short interest was N/A as of 08/15/2011.

10. The Dow Chemical Co (NYSE:DOW)

Sector

Basic Materials

Industry

Chemicals

Market Cap

$31,976M

Beta

2.54

The company offers a variety of plastic, chemical, and agricultural services and products worldwide. The company has a Forward P/E Ratio of 7.85. DOW’s 1-Year Fiscal EPS Growth Rate is 681.82%. The short interest was 1.60% as of 08/15/2011.

We hope this list helps investors as they do their own due diligence on material stocks with low Forward P/E valuations.

Source: 10 Undervalued Materials Stocks Ramping Up Shareholder Value