With the major averages edging towards pricey territory, Andrew Bary of Barron's screens the...


With the major averages edging towards pricey territory, Andrew Bary of Barron's screens the S&P 500 for stocks trading at single-digit multiples, then narrows the list to those whose prospects can be argued to be good. The names are all familiar ones, but their presence on the list may surprise: VLO, MPC, HPQ, FCX, ESV, PSX, GM, MET, WDC, PRU, APA, JPM, C, DE, AAPL.

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Comments (21)
  • Jack Baker
    , contributor
    Comments (1284) | Send Message
     
    The difference between AAPL and the others is that the others desserve low multiples. AAPL does not.
    20 Jul 2013, 11:07 AM Reply Like
  • Ted Bear
    , contributor
    Comments (697) | Send Message
     
    Curious why you would expand the multiple for a company whose growth is gone, and whose future profitability depends on out-selling, out-manufacturing, and out-margining the competitors?

     

    Apple needs a new block buster product. There is nothing on the horizon at present. Think in terms of HP--Apple will squeeze everything they can from existing products; they'll make a few acquisitions; but in the end, you either grow or you fade.

     

    IMHO there is no reason to pay up for 'fade'.
    20 Jul 2013, 01:53 PM Reply Like
  • Akimbe
    , contributor
    Comments (59) | Send Message
     
    Ted, AAPL's P/E ex cash is so cheap right now, negative growth is priced in. If they just roll around at the same income they ought to at least hit a P/E of 12 ex cash (still less than market average).
    21 Jul 2013, 12:59 AM Reply Like
  • meta9999
    , contributor
    Comments (210) | Send Message
     
    yeah, I agree. The high multiple was justified when Jobs was running the company. Who else could have that kind of vision? And how much more of the market can they capture with their products now? Sorry, Apple here is maybe worth $400.... maybe.
    21 Jul 2013, 01:05 AM Reply Like
  • smdemunbrun
    , contributor
    Comments (6) | Send Message
     
    Look what has happened to AAPL price every time Steve Jobs has not been at the helm. This makes the third time. Just sayin'..........
    21 Jul 2013, 11:03 AM Reply Like
  • rrose39
    , contributor
    Comments (1040) | Send Message
     
    I stopped reading at "...(t)here is nothing on the horizon at present."

     

    You clearly have no clue.
    21 Jul 2013, 12:03 PM Reply Like
  • John Nugent
    , contributor
    Comments (9) | Send Message
     
    In this volatile market, I like the idea and the selections.
    20 Jul 2013, 11:42 AM Reply Like
  • RDB114
    , contributor
    Comments (11) | Send Message
     
    Love your list.

     

    I own based upon value, VLO, PSX, GM, JPM, and APPL. I almost bought MET, but already had AFL, which has had better earnings and revenue growth. Also investors should be careful, the easy money has already been made in disc drive makers, WDC, and I have recently sold their competitor, STX. Expectations are much more important than single digit multiples in this industry.
    20 Jul 2013, 11:42 AM Reply Like
  • sinedo
    , contributor
    Comments (501) | Send Message
     
    The beauty of the Market is the love and hate emotions that under and over-value stocks. I have found the best strategy, long term, is to realize "the first shall be last, and the last, first" always works for good companies. Buy those straw hats in the winter, the hated stocks that will "rotate" back into loved status, eventually, because that is the "game" the big WS Brokers have been playing for ages. When they say "Sell", they want your shares, and vice versa, generally.
    Regards,
    20 Jul 2013, 01:07 PM Reply Like
  • 1gdanka
    , contributor
    Comments (112) | Send Message
     
    Sinedo, you are correct. At least sell some shares of the best while they are in the pink and buy the best which are down in the dumps. And I have not pulled the sell trigger yet on WDC which is my all time greatest win and keeps on going.
    It is on Barron's list.
    Taking profits is more difficult than buying for me.

     

    What is wrong with me?
    20 Jul 2013, 02:24 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (17809) | Send Message
     
    No investor has ever filed for bankruptcy for taking profits : )
    20 Jul 2013, 05:10 PM Reply Like
  • RDB114
    , contributor
    Comments (11) | Send Message
     
    Everyone has a hard time selling. The only general rules I have used for selling are first, would I buy this stock at this price. If you would not buy more at the current price, it is a possible sell. Second, let the reason for the stock purchase be the reason to sell. If reason you purchased the stock no longer exist, the stock is a possible sell. Also, try selling part of your position and average out over time.

     

    While I have owned STX several times over the last few years, I am proud to say I have always sold too soon. The downturns in WDC and STX are fast and deadly and happen way before the financial numbers. Also I noticed the run up in WDC this year (2013) has occurred on lower average volume previous years.
    21 Jul 2013, 10:40 AM Reply Like
  • sinedo
    , contributor
    Comments (501) | Send Message
     
    RDB, that is a great rule for selling too early. I have forced myself to do that at times, including selling part of my holdings. I studied charts for a few years, and learned that they are the best timing tool for stocks. It isn't easy or foolproof, but it beats "funnymentals", what most of the comments here are about.
    Understand that I am talking about "timing" only; that is all charts are good for. The Buy and Sell decisions should be made first, and the charts will tell you when, normally. The formula I use is "Aim, Ready, Fire".
    21 Jul 2013, 11:30 AM Reply Like
  • Hayweed
    , contributor
    Comments (392) | Send Message
     
    I love how people say the growth is over at Apple yet they love Google. Google has zero growth and trades at 3 times Apple.
    21 Jul 2013, 12:30 AM Reply Like
  • tibialexpert
    , contributor
    Comments (45) | Send Message
     
    Trade Mark value $153 bln; Cash and Investments $120 bln = $273 bln. Market cap last Friday = $398 Bln....... One only needs to take a similar view of other companies and you get the answer!!
    21 Jul 2013, 03:51 AM Reply Like
  • tibialexpert
    , contributor
    Comments (45) | Send Message
     
    Trade Mark Google $44 Bln; Cash and Investments $47 bln = $91 bln. Market Cap last Friday = $299 Bln !!
    21 Jul 2013, 03:54 AM Reply Like
  • Rickpat314
    , contributor
    Comments (9) | Send Message
     
    A Big Plus for WDC. where the experts don' know how to place it.
    21 Jul 2013, 11:09 AM Reply Like
  • Douga99
    , contributor
    Comment (1) | Send Message
     
    Most of these have PE's above 10. What is meant by single digit multiples
    21 Jul 2013, 11:11 AM Reply Like
  • bberuch
    , contributor
    Comments (314) | Send Message
     
    positions in VLO and FCX, down on both, market seems to dislike the spin off by VLO, and hate violently the acquisitions by FCX.

     

    I am not getting solid reasons for the market's reactions in either case.
    Both companies appeared to be well run prior to these decisions.

     

    In the case of FCX a major stockholder put his money where his mouth is.

     

    a spinoff is like a divorce, an acquisition like a marriage,
    either can be a big mistake of a superb success.

     

    too earily for me to tell.
    21 Jul 2013, 09:04 PM Reply Like
  • bberuch
    , contributor
    Comments (314) | Send Message
     
    I have bought APA on several occasions, and found their management to make sound decisions. Because they have holdings in Egypt, and Egypt is currently in a state of turmoil, their assets there can be vulnerable.

     

    I have suffered setbacks in TOTAL due to the Lybian revolution several years ago and have yet to recover from them.
    21 Jul 2013, 09:21 PM Reply Like
  • jbellisario
    , contributor
    Comments (9) | Send Message
     
    I guess what we all need to do is wait and see what happens with Apples's new product development. It will be the final word!
    30 Jul 2013, 03:54 PM Reply Like
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