Stingy Investor TipSheet: Low PE10 Stocks


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Stingy Investor Tip Sheet
Low PE10 Stocks
While collecting data to look for Montier's high-risk stocks, I picked up P/E10 data. The P/E10 ratio is like the regular price-to-earnings ratio (P/E) but it uses average earnings over the last 10 years instead of earnings over the last year. There is also some evidence that P/E10 ratios do a better job of highlighting cheap (or expensive) stocks. The regular P/E ratio tends to vary wildly from quarter to quarter but the P/E10 ratio tends to provide a smoother look at a company's long-term earnings tend. I look for bargains by first screening for Canadian stocks with P/E10 ratios of less than 10. I also demand debt-to-equity ratios of less than 100%. Finally, I sorted the resulting list from large to small based on market capitalization. BCE, the old favourite of 'widows and orphans', tops the list . . . Name Price P/E10 D/E(%) ======================== ====== ===== ======= BCE (BCE) $25.60 6.4 76.1 TECK COMINCO (TCK.B) $5.95 3.9 16.9 SEARS CANADA (SCC) $20.08 9.5 26.1 WEST FRASER TIMBER (WFT) $28.71 8.7 29.7 INMET MINING (IMN) $22.75 7.7 23.1 SHERRITT INT (S) $2.92 3.5 49.6 AGF MANAGEMENT (AGF.B) $8.40 6.8 13.1 TRANSCONTINENTAL (TCL.B) $8.38 7.3 72.0 TORSTAR (TS.B) $8.11 8.8 73.8 PARAMOUNT (POU) $7.48 8.1 10.8 Source: Bloomberg, January 28, 2009 login to see the full table

01/30/2009 11:15 PM EST Permlink save & share		Stocks

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