Investing in low P/E stocks can prove to be a good bargain for investors as the P/E ratio is a snapshot of a firm's earnings strength. However, the only hitch in this old school of investing is that P/E ratio hardly conveys a company's future earnings growth.
Investors can easily fall prey to a value trap if the P/E ratio of a stock is low for a valid reason such as weak fundamentals. Therefore, it is essential to take the company's earnings growth prospects into account before taking the dive with only low value stocks as lifeguards.
A thorough analysis of the company's growth potential to determine if the particular company has a bright future along with low P/E will assure more returns.
So we have shortlisted low P/E stocks with great growth potential and favorable Zacks Rank.
4 Stocks to Bet On
With the help of our Zacks Stock Screener , we have sorted four stocks that sport a Zacks Rank #1 (Strong Buy), trade at a Price/Earnings (F1) ratio of less than 15, carry a Growth Style Score of 'A' with projected EPS growth rate (F1/F0) of 20% or higher.
Using our new style score system , one can locate stocks that have a solid upside potential. Our Growth Style Score condenses all the essential metrics from the company's financial statements to get a true sense of the quality and sustainability of its growth. Our research shows that stocks with Style Scores of 'A' or 'B' when combined with a Zacks Rank #1 or #2 offer the best investment opportunities.
Cal-Maine Foods, Inc.CALM is engaged in the production, cleaning, grading and packaging of fresh shell eggs for sale to shell egg retailers. The Mississippi-based company is the one of the largest producers and distributors of fresh shell eggs in the U.S.
Zacks Rank: #1
P/E (F1): 6.15
Growth Score: 'A'
Projected EPS Growth: 152.4%
The Pennsylvania-based Trinseo SATSE is a global materials company and manufacturer of plastics, latex and rubber. The company's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires.
Zacks Rank: #1
P/E (F1): 6.92
Growth Score: 'A'
Projected EPS Growth: 2535.6%
Rentech Nitrogen Partners, L.P.RNF is a nitrogen fertilizer company and operates as a subsidiary of Rentech, Inc. The California-based company produces anhydrous ammonia, and urea ammonium nitrate solution.
Zacks Rank: #1
P/E (F1): 9.02
Growth Score: 'A'
Projected EPS Growth: 192.7%
The Texas-based Hallmark Financial Services Inc.HALL is an insurance holding company, which markets, distributes, underwrites, and services property/casualty insurance products to businesses and individuals in the U.S. The company operates in the Standard Commercial, Specialty Commercial, and Personal segments.
Zacks Rank: #1
P/E (F1): 11.43
Growth Score: 'A'
Projected EPS Growth: 49.3%
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CAL-MAINE FOODS (CALM): Free Stock Analysis Report
HALLMARK FINL (HALL): Free Stock Analysis Report
RENTECH NITROGN (RNF): Free Stock Analysis Report
TRINSEO SA (TSE): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
