BOSTON ( TheStreet) -- If a second round of asset purchases by the Fed -- known as quantitative easing -- comes to pass, U.S. stocks may ignite. Financials, the leaders in the rally from the March 2009 low, have fallen out of favor in 2010. But there are cheap stocks in the sector. Here are the 10 cheapest financial stocks based on forward earnings multiples.
10. Ashford Hospitality Trust (AHT) is a real estate investment trust that owns hotels and resorts. Ashford swung to a second-quarter profit of $6.8 million, or 22 cents a share, from a year-earlier loss of $161 million, or $2.20. Revenue grew 3.6% to $240 million. The operating margin climbed from negatives to 11%. Ashford's stock trades at a forward earnings multiple of 8.3, a book value multiple of 0.6, a sales multiple of 0.6 and a cash flow multiple of 7.3 -- 92%, 74%, 91% and 60% discounts to peer averages. One analyst rates it "buy and six rate it "hold."
Bullish Scenario: FBR Capital Markets (FBCM) offers a target of $11, implying 8% of upside.