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Practical Advice from

7 Ultra-Cheap Value Stocks to Buy Now


What makes value stocks … well, values? When is a cheap stock actually inexpensive … and when is it just plain ol’ cheap?

When a company has size and real earnings, and when its area of business is just out of fashion, even a great company’s stock can get tossed into the bargain bin. That is where you want to pick it up.

One of the most basic metrics of value stocks is the price-to-earnings ratio. The lower a stock’s P/E, the faster the price of your investment will be covered by earnings. Fast-growing stocks have very high P/E ratios and appeal to investors seeking growth. Slow-growing stocks have lower P/E ratios but may either pay dividends or be poised for a turnaround.


However, a lot of investors make mistakes when picking out cheap stocks. They assume the market will quickly discover its mistake and bid a low-priced stock up quickly. But that’s not how it works. Industrial fashions change slowly. A reputation, once lost, is very hard to regain. When an operating company breaks down, it can also be very hard to repair.

Still, there are ways to make money in cheap stocks. Another, more highly valued company could buy another one out. Undervalued companies may grow their way out of trouble. Hedge funds and private equity companies are always looking for undervalued assets they can buy, break up, and squeeze profit from.

These 7 ultra-cheap value stocks to buy all sell at single-digit P/Es, but also feature market caps of over $10 billion. They’re solid companies with real profits. Some even pay dividends.

There are reasons these companies are in the bargain bin, and there are bears in all these issues. Still, we want to look at the merchandise — pick it up, shake it and examine it from every angle.

One man’s trash is another man’s treasure, after all.

Prices and data are from the original InvestorPlace story published on February 21, 2017. Click on ticker-symbol links in each slide for current prices and more.

This slide show is from InvestorPlace, not the Kiplinger editorial staff.


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