10 Cheapest Large-Cap Stocks

Micron Technology, Teradyne and Western Digital are among companies selling at deep discounts.
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BOSTON (TheStreet) -- Investors wary of a soft patch in the economy have piled into government debt, whose yields are slim. The following 10 stocks, the cheapest on the S&P 500, sell for less than seven times earnings, reflecting a deep discount. They're ordered by forward earnings multiple, from cheap to cheapest.

10.

Jabil Circuit

(JBL) - Get Report

sells electronic-manufacturing services, helping firms in the car, aerospace, computing and telecommunications industries. Jabil swung to a fiscal third-quarter profit of $52 million, or 24 cents a share, from a loss of $29 million, or 14 cents, a year earlier. Revenue grew 32%. Jabil's stock trades at a forward earnings multiple of 6.8 and a cash flow multiple of 9.2, 66% and 37% discounts to peer averages. Of analysts covering the stock, 13, or 81%, rate it "buy" and three rate it "hold." A median target of $20.42 implies 58% of upside.

9.

Ford

(F) - Get Report

is the second-biggest U.S. carmaker. Second-quarter net income increased 15% to $2.6 billion, but earnings per share dropped 12% to 61 cents, hurt by a higher share count. Revenue increased 29%. Ford's stock sells for a trailing earnings multiple of 7.9 and a forward earnings multiple of 6.7, 74% and 84% discounts to automobile industry averages. Its PEG ratio, a measure of value relative to predicted long-run growth, of 0.1 signals a 90% discount to fair value. Of analysts covering Ford, nine, or 56%, rank its stock "buy."

8.

Lincoln National

(LNC) - Get Report

offers insurance and investment-management services. Lincoln swung to a second-quarter profit of $255 million, or 32 cents a share, from a loss of $161 million, or 4 cents, a year earlier. Revenue expanded 38%. Lincoln National's stock trades at a forward earnings multiple of 6.7 and a book value multiple of 0.6, 42% and 87% discounts to insurance peer averages. Roughly 50% of firms covering the stock rate it "buy." A median target of $41 suggests a return of 38%.

UBS

(UBS) - Get Report

is bullish, expecting the stock to rise 67% to $41.

7.

Cliffs Natural Resources

(CLF) - Get Report

sells iron-ore pellets to steel companies. Its second-quarter profit more than quintupled to $261 million, or $1.92 a share, as revenue tripled to $1.2 billion. The company's shares sell for a forward earnings multiple of 6.6 and a cash flow multiple of 14, 61% and 34% discounts to materials industry averages. Of analysts covering Cliffs, eight, or 67%, advocate purchasing its stock and the remainder advise holding. A median target of $85 implies 41% of upside.

Deutsche Bank

(DB) - Get Report

expects the shares to gain 58% to $95.

6.

SuperValu

(SVU)

operates retail food stores and offers supply-chain services to other companies. Fiscal first-quarter profit fell 41% to $67 million, or 31 cents a share, as revenue declined 9%. SuperValu's stock has fallen 23% in the past 12 months. It trades at a forward earnings multiple of 6.5, a book value multiple of 0.8 and a cash flow multiple of 1.9, 53%, 67% and 78% discounts to food and staples retailing peer averages. Just one, or 6%, of the analysts covering Supervalu rate its stock "buy" while 13, or 76%, rate it "hold" and two rank it "sell."

5.

Hartford Financial Services

(HIG) - Get Report

sells life, property and casualty insurance. It swung to a second-quarter profit of $76 million, or 14 cents a share, from a loss of $15 million, or 6 cents, a year earlier. Revenue fell 58%. Hartford's stock sells for a forward earnings multiple of 6.1, a book value multiple of 0.5 and a cash flow multiple of 5.2, 47%, 88% and 62% discounts to industry averages. Of researchers rating it, eight, or 40%, advise purchasing, nine recommend holding and three say to sell. A median target of $30.67 suggests a 36% return.

4.

Gannett

(GCI) - Get Report

owns USA Today and is the largest U.S. newspaper group, based on circulation. Second-quarter profit more than doubled to $195 million, or 73 cents a share, as revenue declined 1.6%. Gannett's shares trade at a forward earnings multiple of 5.7, a book value multiple of 1.7 and a cash flow multiple of 3.5, 79%, 51% and 78% discounts to media peer averages. Of analysts covering Gannett, six, or 75%, rate its stock "buy" and two rate it "hold." None rank the stock "sell." Analysts' median target of $21 implies 58% of upside in the weeks ahead.

3.

Western Digital

(WDC) - Get Report

makes hard drives for servers, computers, game consoles and set-top boxes. Fiscal fourth-quarter profit advanced 35% to $264 million, or $1.13 a share, as revenue stretched 23% to $2.4 billion. Western Digital's stock sells for a forward earnings multiple of 5.6, a book value multiple of 1.3 and a cash flow multiple of 3.1, 64%, 70% and 75% discounts to computer and peripheral industry averages. Roughly 52% of researchers covering Western Digital rate its stock "buy." A median target of $38.14 suggests a return of 56%.

2.

Teradyne

(TER) - Get Report

designs test systems for semiconductor, automobile and telecom companies. Teradyne swung to a second-quarter profit of $122 million, or 55 cents a share, from a loss of $67 million, or 39 cents, a year earlier. Revenue tripled. Teradyne's shares trade at a forward earnings multiple of 5.3 and a book value multiple of 2.1, 59% and 63% discounts to peer averages. Of firms evaluating Teradyne, nine, or 60%, rate its stock "buy", five rate it "hold" and one ranks it "sell." A median target of $15.70 implies 50% of upside.

1.

Micron Technology

(MU) - Get Report

sells semiconductors, principally memory and image-sensor chips. Micron swung to a fiscal third-quarter profit of $939 million, or 92 cents a share, from a loss of $301 million, or 37 cents, a year earlier. Micron's stock trades at a forward earnings multiple of 4.1, a book value multiple of 1 and a cash flow multiple of 3.1, 69%, 83% and 79% discounts to semiconductor industry averages. Roughly 74% of analysts covering Micron rate its stock "buy." Analysts' median target of $14.56 suggests that the stock might double.

-- Reported by Jake Lynch in Boston.

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