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Here's What's In CNBC's Cheap Stocks Basket

CNBC filtered S&P 500 non-financial companies, choosing those with a forward price-earnings ratio at least 20% lower than their five-year average.
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CNBC has assembled a list of cheap stocks to consider for 2022, including Alaska Air  (ALK) - Get Alaska Air Group, Inc. Report, Activision Blizzard  (ATVI) - Get Activision Blizzard, Inc. Report, Baker Hughes  (BKR) - Get Baker Hughes Company Class A Report, D.R. Horton  (DHI) - Get D.R. Horton, Inc. Report and News Corp.  (NWSA) - Get News Corporation Class A Report.

CNBC filtered S&P 500 non-financial companies, choosing those with a forward price-earnings ratio at least 20% lower than their five-year average. It left out financial stocks because P-E ratios aren’t a commonly used metric for them.

The list was further winnowed to include only companies rated a buy by at least 60% of analysts covering them and stocks with consensus price-targets at least 10% above current price levels.

Other stocks on the list are Devon Energy  (DVN) - Get Devon Energy Corporation Report, Electronic Arts  (EA) - Get Electronic Arts Inc. Report, EOG Resources  (EOG) - Get EOG Resources, Inc. Report, Diamondback Energy  (FANG) - Get Diamondback Energy, Inc. Report, Freeport-McMoRan,  (FCX) - Get Freeport-McMoRan, Inc. Report, Marathon Petroleum  (MPC) - Get Marathon Petroleum Corporation Report, Phillips 66  (PSX) - Get Phillips 66 Report, Pioneer Natural Resources  (PXD) - Get Pioneer Natural Resources Company Report, PTC  (PTC) - Get PTC Inc. Report Schlumberger  (SLB) - Get Schlumberger NV Report, Valero Energy  (VLO) - Get Valero Energy Corporation Report and Williams Cos.  (WMB) - Get Williams Companies, Inc. Report.

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As of Dec. 21, Alaska Air had a forward P-E ratio of 11.9 compared to its five-year average of 28.3; Activision had a forward P-E ratio of 16.4, compared to its five-year average of 23.3; Baker Hughes a ratio of 19.7, compared to its average of 34.8.

D.R. Horton had a ratio of 7.1, compared to its average of 10.2; Devon a ratio of 7.7, compared to its average of 24.2; EA a ratio of 17.7, compared to its average of 22.3; EOG a ratio of 8.6, compared to its average of 34.5; Diamondback a ratio of 6, compared to its average of 13.6.

Freeport-McMoRan had a ratio of 10.6, compared to its average of 15.6; Marathon a ratio of 16.8, compared to its average of 44.4; and News Corp. a ratio of 25.6, compared to its average of 33.9.