5 Top S&P 500 Bargain Stocks for 2012

Whirlpool

Appliance repairmen have been busy this year. Consumers are holding onto washing machines, dryers and dishwashers longer to avoid paying up for new units, so it's easier just to fix them rather than replace them. Indeed the outlook is dim for "white goods" manufacturer Whirlpool (WHR), as analysts currently expect EPS to fall more than 30% in 2012 to around $6.25.

With that dismal profit outlook in mind, shares still appear attractively valued at around 7.5 times projected profits. But perhaps that forecast is simply too bearish. After all, recent improving employment trends should translate into rising consumer confidence as 2012 unfolds.

For the sake of being conservative, let's assume that Whirlpool only muddles through 2012 and has to wait until 2013 for a rebound. Well, the company earned more than $9 a share in both 2010 (and is likely to do so in 2011 as well). If EPS rebounds to $9 in 2013, then the forward multiple drops below 6.

It won't take a robust 2012 for this stock to rebound next year. Only a sense that results in 2013 and beyond will start to look better. And about that $9 a share in earnings power that Whirlpool showed in 2010 (and likely again in 2011). That came during a very weak economy. Imagine what Whirlpool could earn when the economy is back on its feet.

Whirlpool also shows up on the list of 5 Worst Consumer Stocks That May Be Stars in 2012.

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