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5 Great Low P/E Stocks to Add to Your Portfolio Now
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At present the market is facing uncertainty due to contradictory comments by the Fed officials. While some officials are indicating a possible rate hike in the next meeting, the comments of other officials signal a hike later in the year. Last Friday, the free fall of the Dow Jones Industrial Average was caused by hawkish comments by Boston Fed President, Eric Rosengren, who backed gradual hikes in the interest rate. However, dovish comments by Fed officials on Monday saw the reversing of the index and shares regaining after the fall.
Moreover, uncertainty in Europe following the Brexit referendum, along with the lack of expected stimulus by the European Central Bank also increased ambiguity in the market. Amidst all the confusion it is difficult for investors to pick stocks that are more likely to perform well. However, if investors go for fundamentally strong, undervalued stocks, they are likely to gain high returns in the long run.
Understanding the P/E Ratio
The P/E ratio can be a common measure for picking stocks. Essentially, the ratio indicates the amount an investor is expected to pay to receive one dollar of the company’s earnings. A higher P/E implies that the investors expect the earnings growth to be higher in the future. Investors pay a premium now to receive those higher returns later, making them riskier than companies with lower P/E ratios.
Alternately, companies with a low P/E indicate undervalued stocks or a better performance of the company compared to its past trends. These stocks are supposed to be fundamentally strong and are expected to be good buys if they have growth potential that the market isn’t aware of.
5 Low-P/E Stock Picks
Low priced stocks have a high potential for increasing returns as well as appreciating. The stocks have a higher percentage return for even small dollar increases. Here, we have chosen stocks that are priced below $20. For such stocks, a single dollar appreciation in price results in a minimum 5% increase to the value.
We have picked 5 well-ranked stocks with a P/E of less than 10, priced below $20.
Jernigan Capital, Inc.
Headquartered in Memphis, TN, Jernigan Capital is a commercial real estate finance company. It provides financing to private developers, owners and operators of self-storage facilities. Moreover, it offers solutions for the construction of self-storage facilities or self-storage redevelopment opportunities.
The company, priced at $17.23, currently sports a Zacks Rank #1 (Strong Buy). Its P/E ratio is 9.98.
Companhia de Saneamento Basico do Estado de Sao Paulo (SBS - Free Report)
Companhia de Saneamento Basico do Estado de Sao Paulo, or SABESP, is a utility company providing public water and sewage services in the state of Sao Paulo, Brazil. The company's principal shareholder is the Sao Paulo government, which owns nearly 50.3% of its shares.
The company, priced at $8.89, currently sports a Zacks Rank #1. Its P/E ratio is 9.39.
Health Insurance Innovations, Inc.
Headquartered in Tampa, FL, Health Insurance Innovations is a developer and administrator of web-based individual health insurance plans and ancillary products. The company’s portfolio includes a number of short-term medical plans, insurances as well as lifestyle and discount services.
Headquartered in Burlington, MA, Avid Technology develops markets, sells and supports a wide range of software and systems for creating and manipulating digital media content. The company's systems are designed to improve the productivity of video and film editors by enabling faster, easier, and more cost-effective editing.
The company, priced at $7.88, currently sports a Zacks Rank #1. Its P/E ratio is 3.73.
Itau Unibanco Holding is anotherSao Paulo, Brazil-based company. The financial holding company, together with its subsidiaries, provides a vast array of credit and other financial services to a diverse customer base of individuals and companies in and outside Brazil.
The company, priced at $11.00, currently sports a Zacks Rank #1. Its P/E ratio is 9.76.
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5 Great Low P/E Stocks to Add to Your Portfolio Now
At present the market is facing uncertainty due to contradictory comments by the Fed officials. While some officials are indicating a possible rate hike in the next meeting, the comments of other officials signal a hike later in the year. Last Friday, the free fall of the Dow Jones Industrial Average was caused by hawkish comments by Boston Fed President, Eric Rosengren, who backed gradual hikes in the interest rate. However, dovish comments by Fed officials on Monday saw the reversing of the index and shares regaining after the fall.
Moreover, uncertainty in Europe following the Brexit referendum, along with the lack of expected stimulus by the European Central Bank also increased ambiguity in the market. Amidst all the confusion it is difficult for investors to pick stocks that are more likely to perform well. However, if investors go for fundamentally strong, undervalued stocks, they are likely to gain high returns in the long run.
Understanding the P/E Ratio
The P/E ratio can be a common measure for picking stocks. Essentially, the ratio indicates the amount an investor is expected to pay to receive one dollar of the company’s earnings. A higher P/E implies that the investors expect the earnings growth to be higher in the future. Investors pay a premium now to receive those higher returns later, making them riskier than companies with lower P/E ratios.
Alternately, companies with a low P/E indicate undervalued stocks or a better performance of the company compared to its past trends. These stocks are supposed to be fundamentally strong and are expected to be good buys if they have growth potential that the market isn’t aware of.
5 Low-P/E Stock Picks
Low priced stocks have a high potential for increasing returns as well as appreciating. The stocks have a higher percentage return for even small dollar increases. Here, we have chosen stocks that are priced below $20. For such stocks, a single dollar appreciation in price results in a minimum 5% increase to the value.
We have picked 5 well-ranked stocks with a P/E of less than 10, priced below $20.
Jernigan Capital, Inc.
Headquartered in Memphis, TN, Jernigan Capital is a commercial real estate finance company. It provides financing to private developers, owners and operators of self-storage facilities. Moreover, it offers solutions for the construction of self-storage facilities or self-storage redevelopment opportunities.
The company, priced at $17.23, currently sports a Zacks Rank #1 (Strong Buy). Its P/E ratio is 9.98.
Companhia de Saneamento Basico do Estado de Sao Paulo (SBS - Free Report)
Companhia de Saneamento Basico do Estado de Sao Paulo, or SABESP, is a utility company providing public water and sewage services in the state of Sao Paulo, Brazil. The company's principal shareholder is the Sao Paulo government, which owns nearly 50.3% of its shares.
The company, priced at $8.89, currently sports a Zacks Rank #1. Its P/E ratio is 9.39.
Health Insurance Innovations, Inc.
Headquartered in Tampa, FL, Health Insurance Innovations is a developer and administrator of web-based individual health insurance plans and ancillary products. The company’s portfolio includes a number of short-term medical plans, insurances as well as lifestyle and discount services.
The company, priced at $4.81, currently sports a Zacks Rank #1. Its P/E ratio is 8.16. You can see the complete list of today’s Zacks #1 Rank stocks here.
Avid Technology, Inc.
Headquartered in Burlington, MA, Avid Technology develops markets, sells and supports a wide range of software and systems for creating and manipulating digital media content. The company's systems are designed to improve the productivity of video and film editors by enabling faster, easier, and more cost-effective editing.
The company, priced at $7.88, currently sports a Zacks Rank #1. Its P/E ratio is 3.73.
Itau Unibanco Holding S.A. (ITUB - Free Report)
Itau Unibanco Holding is anotherSao Paulo, Brazil-based company. The financial holding company, together with its subsidiaries, provides a vast array of credit and other financial services to a diverse customer base of individuals and companies in and outside Brazil.
The company, priced at $11.00, currently sports a Zacks Rank #1. Its P/E ratio is 9.76.
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>