This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Stocks With Low Price-to-Earnings Ratios Best for Active Investors

NEW YORK (TheStreet) -- There are a number of great companies in the market today. Each month we screen for stocks with low price-to-earnings ratios, by using the ModernGraham Valuation Model.

In March, we found Ford (F), Freeport-McMoRan (FCX), Capital One (CO), Unum (UNM) and Gannett (GHI). We found the same results in April. However, in May, we dropped two and added two to round out the five-lowest PEmg (price/normalized earnings) companies.

Each company has been determined to be suitable for the "Enterprising (or active, or aggressive) Investors". We also have tips for "Defensive (or passive) Investors." We define both types of investors here.

Discover Financial Services (New Find)

Discover Financial (DFS - Get Report) is a company that is intriguing to enterprising investors but does not quite qualify for the Defensive Investor. It has a short history as a publicly traded company and has yet to establish the dividend history the defensive investor requires.

Enterprising investors, however, should feel comfortable proceeding with further research into the company and comparing it with peers such as Capital One and Wells Fargo (WFC).

Must Read: You Think This Is a Boring Market? Be Careful What You Wish For

As for the valuation, Discover appears to be undervalued as its EPSmg (normalized earnings) is expected to increase to $4.51 this year from $1.78 in 2010. This growth more than supports the market's implied estimate of 1.96% earnings growth and leads our valuation model to return an estimate of intrinsic value that is well above the market price. (See the full valuation.)

DFS Chart

DFS data by YCharts

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DFS $56.40 0.00%
COH $41.34 0.00%
AAPL $93.64 0.00%
GOOG $698.21 0.00%
FB $118.57 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs