Betting on bargain stocks that have a low price-to-earnings (P/E) ratio is a convenient and common investment approach. The perception is that the lower the P/E, the higher is the value of the stock. This inference is drawn on the simple logic that a stock’s current market price does not justify (is not equivalent to) its higher earnings and therefore has room to run.
Naturally, there are very few investors who pay attention to stocks with an increasing P/E. But this often-overlooked trend can prove useful in finding great stocks. Let’s dig a little deeper.
Why Stocks with Rising P/E Can be Equally Hit
Investors should note that stock prices move in line with earnings performance. If earnings come in stronger, the price of a stock shoots up. Solid quarterly earnings and the forward guidance in turn boost earnings forecasts, leading to stronger demand for the stock and an uptrend in its price.
So, if share price is rising steadily, it means that investors are assured of the stock’s fundamental strength and expect some strong positives out of it. Also, studies have revealed that stocks have seen their P/E ratios jump over 100% from their breakout point in the cycle. So, if you can pick stocks early in their breakout cycle, you can end up seeing considerable gains.
Best Low Price Stocks To Buy Right Now: Just Hold Your Nose and Dive Into Under Armour Inc (UAA)
Down more than 37% since its September-2015 peak (and still within easy reach of new 52-week lows), it would be easy to liken a purchase of Under Armour Inc (NYSE:UAA, NYSE:UA) to catching a falling knife — you generally don’t want to do it. Bolstering the bearish case against Under Armour stock is the fact that even with the steep selloff, UAA shares are still priced at a frothy trailing P/E of 64 [the old ‘UA’ ticker now represents the class C shares; both are still investable].
UAA)(NYSE:UA) shares rise on a strong second quarter and there are reasons for optimism. Gartner (NYSE:IT) pops more than 10% on its own strong second quarter. In this episode of MarketFoolery, Asit Sharma analyzes those stories and shares why having a good brand is helpful, but not always enough. /p /li li b[By ]/b pUnder Armour (NYSE: UAA), a branded performance apparel, footwear, and accessories company, faces competition in most categories. But this is a company where annual profit growth is expected to exceed 28% — and its subscription box experiment is likely to contribute. /p /li li b[By Jim Robertson]/b pThe Company had also cut back on the space given to Under Armour (NYSE: UAA) with the Chairman & CEO repeatedly blaming them during multiple earnings calls last year for negatively impacting sales; but he noted in the Q&A: “…we’re enthusiastic about our Under Armour business going forward. But it will remain in the floor space that it has today… Under Armour will turnaround in our stores.”/p /li li b[By Jeremy Bowman]/b pOver the past five years, Nike has been the clear winner as Disney has struggled with the transition to streaming. Nike separated itself from Disney recently when it returned to steady growth in key markets and rival Under Armour (NYSE:UA) (NYSE:UAA) began falling apart./p /li /ul h3Best Low Price Stocks To Buy Right Now: Standex International Corporation(SXI)/h3 pStandex International Corporation was incorporated in 1975 and is the successor of a corporation organized in 1955. As used in this report, the terms “we,” “us,” “our,” the “Company” and “Standex” mean Standex International Corporation and its subsidiaries. We have paid dividends each quarter since Standex became a public corporation in November 1964.br / Unless otherwise noted, references to years are to fiscal years.br / We are a leading manufacturer of a variety of products and services for diverse commercial and industrial markets. We have 11 operating segments, aggregated and organized for reporting purposes into five segments: Food Service Equipment, Engraving, Engineering Technologies, Electronics and Hydraulics. Overall management, strategic development and financial control are maintained by the executive staff from our corporate headquarters located in Salem, New Hampshire. bAdvisors’ Opinion:/b /p ul li b[By Ethan Ryder]/b pStandex Int’l Corp. (NYSE:SXI) – Equities researchers at William Blair boosted their Q3 2019 earnings per share (EPS) estimates for shares of Standex Int’l in a note issued to investors on Monday, October 1st. William Blair analyst N. Heymann now expects that the industrial products company will earn $1.51 per share for the quarter, up from their prior estimate of $1.49. /p /li li b[By Stephan Byrd]/b pStandex Int’l Corp. (NYSE:SXI) has been assigned a consensus rating of “Hold” from the eight brokerages that are covering the company, Marketbeat Ratings reports. One analyst has rated the stock with a sell recommendation, two have issued a hold recommendation and four have issued a buy recommendation on the company. The average 1 year target price among analysts that have covered the stock in the last year is $120.50. /p /li li b[By Logan Wallace]/b pBarclays PLC boosted its holdings in Standex Int’l Corp. (NYSE:SXI) by 13.2% during the 1st quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 4,804 shares of the industrial products company’s stock after buying an additional 561 shares during the period. Barclays PLC’s holdings in Standex Int’l were worth $459,000 as of its most recent SEC filing. /p /li /ul h3Best Low Price Stocks To Buy Right Now: Rockwell Collins, Inc.(COL)/h3 pRockwell Collins, Inc. designs, produces, and supports communications and aviation systems worldwide. The company operates through three segments: Commercial Systems, Government Systems, and Information Management Services. The Commercial Systems segment provides communications, navigation, and situational awareness and surveillance systems and products, as well as integrated avionics and cabin electronics, electro-mechanical, and simulation and training systems. It also offers satellite-based global voice and data communication products and services; wireless information distribution technologies; and maintenance, repairs, parts, after-sales support services, and aftermarket used equipment. This segment serves original equipment manufacturers of commercial air transport, business and regional aircraft, commercial airlines, and business aircraft operators. The Government Systems segment provides defense-related systems, products, and services comprising communications systems and products; avionics sub-systems; precision targeting, electronic warfare, and range and training systems; and visual system products, and training systems and services. This segment serves U.S. Department of Defense, other ministries of defense, other government agencies, and defense contractors. The Information Management Services segment offers voice and data communication services; flight support services; airport communications and information systems; train dispatching and information systems; mission critical security systems; and backup communications services. This segment serves commercial airlines, business aircraft operators, the U.S. Federal Aviation Administration, airport and critical infrastructure operators, and passenger and freight railroads. The company markets its products directly to customers, as well as through sales force, dealers, and sales representatives. Rockwell Collins, Inc. was founded in 1933 and is headquartered in Cedar Rapids, Iowa./p pCOL"> Advisors’ Opinion:
- [By Stephan Byrd]
Rockwell Collins, Inc. (NYSE:COL) saw some unusual options trading activity on Tuesday. Stock investors bought 1,159 call options on the stock. This represents an increase of 1,367% compared to the typical daily volume of 79 call options.
- [By Lee Samaha]
Investors in United Technologies (NYSE:UTX) should prepare for some pretty big changes at the conglomerate. It’s been a long time coming, but the company’s acquisition of Rockwell Collins (NYSE:COL) should be completed by the end of September, and within a couple of months, management will publicly outline the results of its review of strategic options. They are widely expected to deliver a breakup plan. Here’s the lowdown, and why splitting up the business makes sense.
- [By Logan Wallace]
Raymond James & Associates raised its stake in Rockwell Collins, Inc. (NYSE:COL) by 1.0% in the second quarter, Holdings Channel reports. The fund owned 43,229 shares of the aerospace company’s stock after purchasing an additional 441 shares during the quarter. Raymond James & Associates’ holdings in Rockwell Collins were worth $5,822,000 at the end of the most recent reporting period.