Top stocks don’t always have to be expensive. Using IBD MarketSmith, we found three stocks that have outstanding Composite Ratings and are all at rock-bottom valuations based on their price-to-earnings ratios.
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IBD doesn’t believe in buying low P/E stocks. Research shows that winning stocks usually have high valuations when they begin their big moves. Yet, these extremely low valuations make them appealing to value investors.
Two of the three stocks are in bases.
These top stocks were identified in a MarketSmith screen searching for stocks with IBD Composite Ratings of 90 or higher, average daily volume of at least 400,000 shares, P/E ratings of 10 or less and a stock price of 10 or higher.
The price-to-earnings ratio, or P/E ratio, is calculated using the current share price divided by the latest trailing 12-months of earnings. A stock’s P/E ratio can be found in the MarketSmith data boxes with each chart.
Top Stocks At Cheap Prices
International Seaways (INSW) stock is in a cup-with-handle base with a 48.40 buy point. The handle is deeper than normal, however.
The stock has a P/E ratio of 3, as the quarterly earnings have soared in the last several quarters while the stock price has trended sideways. It holds a 95 Composite Rating.
The stock has gained around 9% this year and lags the S&P 500’s 16% gain.
Analysts forecast 43% full-year EPS growth this year and a modest 1% in 2024. International Seaways provides tankers for transporting crude oil and petroleum around the world.
Jeep Stock In A Base
Stellantis (STLA) is in a cup base with a 20.71 buy point.
The stock also has a P/E ratio of 3, as growing earnings outpaced the stock’s performance. It has a 95 Composite Rating.
Shares reclaimed the 50-day line on Monday, as the company tried to reach a tentative agreement with the United Auto Workers union before their contract expires.
In separate news, Stellatis announced Monday it entered into an agreement to offer its third tranche of its stock buyback of up to about $1.6 billion of stock.
Stellantis reported two quarters of 42% EPS growth following two quarters of 12% growth. The Netherlands-based company is the parent company of Jeep, Chrysler, Fiat, Dodge, Alfa Romeo and Maserati brands.
Swiss Bank Reports Record Profit
UBS Group (UBS), the Swiss financial services company, has a P/E of 2 and a 96 Composite Rating.
The stock is extended from a consolidation with a 22.30 buy point. Shares soared 5.6% in heavy volume on Aug. 31, after the company reported its first earnings report after taking over failed Credit Suisse. The stock hit a 52-week high the same day.
The quarterly earnings got a one-time boost after the Swiss banking firm reported a record $29 billion net profit in its second quarter, after absorbing Credit Suisse into its business. UBS also announced it would cut 3,000 redundant jobs in Switzerland in the coming years.
UBS showed its strength after it acknowledged it no longer needed Swiss government backing due to the purchase.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
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