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Stingy Investor Tip Sheet

Value Stocks in the S&P500

I like to search through the large companies of the S&P500 for attractive value stocks. Two main principles guide my quest. First, a stock must have relatively little debt. Second, it should be trading at a low price-to-sales ratio.

I use this approach every year for the Canadian MoneySaver. You can read all about it by perusing last year's article called 5 Stingy Stocks for 2008. But to be a good value each stock must pass the following seven tests.

1. A member of the S&P500
2. Debt-to-Equity Ratio less than or equal to 0.5
3. Current Ratio of more than 2
4. Interest Coverage of more than 2
5. Some Cash Flow from Operations
6. Some Earnings
7. Price to Sales ratio of less than 1

Here's the current list of good S&P500 value stocks.

Company			Price	P/S    P/E   D/E
======================  ======  ====  =====  ====
Ashland (ASH)		$28.59	0.22   8.69  0.02
Genuine Parts (GPC)	$40.91	0.60  13.33  0.19
Nucor (NUE)		$45.40	0.69   7.69  0.41
Allegheny Tech (ATI)	$37.84	0.71   5.92  0.22
Robert Half (RHI)	$25.95	0.83  13.73  0.00
Source: MSN.com, September 23, 2008

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09/23/2008   8:20 PM EST   Permlink   save & shareP/S



 
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