The year 2016 is in the books, and the S&P 500 gained over 11% on the year. That’s great news if you’re already in the stock market … but it’s bad news if you’re looking to buy. The market’s price-to-earnings (P/E) ratio is now 26.1, which is 17.6% higher than it was at the beginning of the year. In other words, if you buy stocks now, you’re paying nearly a fifth more for those companies’ earnings than you would have nearly 12 months ago. At times like these, we all need to be value investors. Specifically, we need to find stocks that have missed out on the broader rally, but because they’ve been overlooked, not because they’re duds. You may be surprised to hear that there are a few such stocks are out there, even if they’re getting tougher to find...
Advanced Semiconductor Engineering (ADR) (ASX) is one. Revenue growth just recently went positive after a year of declines. A second great under appreciated company is Ark Restaurants Corp (ARKR), which has a P/E ratio of 16.8. Flowers Foods, Inc. (FLO) is a bit pricier from a P/E perspective, trading at 23 times trailing-twelve-month earnings, but its 3.8% year-over-year revenue growth in the third quarter, along with a 3.2% dividend yield, make it a contender. Surprisingly, there are a few remaining underpriced financial firms, despite the euphoria the sector has enjoyed after Trump’s surprise win, and FNF Group of Fidelity National Financial, Inc. (FNF) is one of them.
Source: InvestorPlace
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