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Low PE Stocks
Dian
Posted: 02 January 2017 01:08:56(UTC)
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Joined: 09/10/2016(UTC)
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Low PE stocks are not necessarily a good buy. There could be reason for that but we cannot rule out some great opportunities in fundamentally sound strong companies. Moreover today’s high P/E ratio stocks were yesterday’s low P/E ratios.

Why not we screen them, do some research and pick some strong companies.

UK

http://www.s652054703.we...IPD/new_ft100_by_pe.htm

The USA

https://www.theonlineinv...m/top_25_low_pe_ratios/

Frontier markets (Vietnam, Sri-Lanka and Bangladesh)

As an asset class frontier market stocks have more value over developed and emerging markets. Sectors like textiles, food and banking should do well.

Emerging markets

India and China: Opportunity in few sectors mainly internet and consumer staples.

Your thoughts and suggestions highly appreciated.

2 users thanked Dian for this post.
CCT. on 02/01/2017(UTC), Guest on 05/01/2017(UTC)
Sara G
Posted: 02 January 2017 12:15:06(UTC)
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Joined: 07/05/2015(UTC)
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As you say, Dian, a low PE may either be a bargain or a value trap... For myself, I only buy funds and trusts, so essentially I am relying on fund managers to spot the difference. Having said that, before buying a collective, I look at the stats on Morningstar, and based on overall PE the following look like reasonable value to me at the moment:

UK - Aberforth Smaller Companies, 10.41
US - Dodge & Cox US Stock (OEIC), 15.11
Emerging / Asia - Fidelity China Special Situations, 12.51 or Fidelity Asian Values, 11.9
Frontier markets, Blackrock Frontier Markets 10.99

FCSS and FAS are also on double digit discounts, the former having widened again to over 16%.

For disclosure, I hold all of them and will likely add to them in 2017.

6 users thanked Sara G for this post.
CCT. on 02/01/2017(UTC), Dian on 02/01/2017(UTC), Mr Helpful on 05/01/2017(UTC), Guest on 05/01/2017(UTC), Kenpen2 on 05/01/2017(UTC), Guest on 05/01/2017(UTC)
Ron Newfield
Posted: 09 January 2017 16:58:12(UTC)
#3

Joined: 20/11/2012(UTC)
Posts: 1

"Low PE stocks are not necessarily a good buy. There could be reason for that but we cannot rule out some great opportunities in fundamentally sound strong companies."

As the provider of the information mentioned above, I must point out that we provide data which allows the screening of data primarily for those who wish to provide a long-term income. If you look at the data based on yield only, the highest entry shows as TalkTalk Telecom with a yield of 9.18%, but and it's a big but, the dividend cover is only 0.5. This would indicate that fairly imminently, the dividend will be cut by at least 50%.
"So what?" you may say - The problem is that this invariably affects the share price and the P/E will collapse.

And as for allowing fund managers to choose stocks for you - No-one has your interests at heart more than yourself. Fund managers tend to be fairly well off - I wonder why?
As TMF have always said, "Do Your Own Research".
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