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.
Hot Low Price Stocks To Own Right Now: Buenaventura Mining Company Inc.(BVN)
Compañía de Minas Buenaventura S.A.A., a precious metals company, engages in the exploration, mining, and processing of gold, silver, lead, zinc, and copper metals in Peru. The company operates five directly operating mining units, including Uchucchacua, Orcopampa, Julcani, Mallay, and Breapampa; and two mining unites that are under development stage comprising Tambomayo and San Gabriel. It also owns interests in Colquijirca-Marcapunta, Tantahuatay, and La Zanja mines, as well as Tantahuatay, Yanacocha and Cerro Verde mines. In addition, the company provides electrical transmission services; energy generation services through hydroelectric plants; and geological, engineering, design, and construction consulting services to the mining sector, as well as engages in chemical processing activities. Compañía de Minas Buenaventura S.A.A. was founded in 1953 and is headquartered in Lima, Peru.
Advisors’ Opinion:
- [By Adam Levine-Weinberg]
One disadvantage for Southwest Airlines is that customers have to bring their own food along. Hawaiian Holdings (NASDAQ:HA) still offers complimentary meals for customers in coach, and other airlines have buy-onboard options. By contrast, Southwest’s planes have small galleys, so the carrier will only offer a “snack bag” on its Hawaii flights. Many travelers may want at least the option of a hot meal for what can be a six-hour flight.
- [By Adam Levine-Weinberg]
Shares of Hawaiian Holdings (NASDAQ:HA) cratered on Monday, falling 11% as Southwest Airlines (NYSE:LUV) finally began selling tickets for its long-awaited Hawaii flights. The stock continued to move downward on Tuesday.
Hot Low Price Stocks To Own Right Now: OMNOVA Solutions Inc.(OMN)
OMNOVA Solutions Inc. (referred to in this report as OMNOVA Solutions, OMNOVA, the Company, we or our) became an independent publicly-traded company on October 1, 1999, when it was spun off by GenCorp Inc., its former parent company. OMNOVA Solutions is incorporated under the laws of the State of Ohio, and its headquarters is located at 25435 Harvard Road, Beachwood, Ohio 44122-6201. OMNOVA Solutions is an innovator of performance-enhancing chemistries and surfaces for a number of commercial, industrial, and residential end uses. Our products provide a variety of important functional and aesthetic benefits to hundreds of products that people use daily. We hold leading positions in key market categories, which have been built through innovative products, customized product solutions, strong technical expertise, well-established distribution channels, recognized brands, and long-standing customer relationships. Advisors’ Opinion:
- [By Logan Wallace]
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- [By Joseph Griffin]
OMNOVA Solutions Inc. (NYSE:OMN) – Analysts at KeyCorp issued their Q2 2019 earnings estimates for shares of OMNOVA Solutions in a report issued on Wednesday, February 6th. KeyCorp analyst M. Sison expects that the specialty chemicals company will post earnings per share of $0.17 for the quarter. KeyCorp also issued estimates for OMNOVA Solutions’ Q3 2019 earnings at $0.18 EPS.
Hot Low Price Stocks To Own Right Now: CSP Inc.(CSPI)
CSP Inc., together with its subsidiaries, develops and markets IT integration solutions and cluster computer systems to commercial and defense customers in the Americas, Europe, and Asia. The companys High Performance Products segment offers computing systems for digital signal processing applications in the defense market; Ethernet adapters and application software for various applications in packet capture, financial transaction, broadcast video, and media markets; and network adapters for use in automated trading and network monitoring applications. Its Technology Solutions segment provides computer managed and integration services; and third-party computer hardware and software value added reseller services to various customers in Web and infrastructure hosting, education, telecommunications, health services, distribution, financial and professional services, and manufacturing industries. This segment also offers professional IT consulting services, such as implementation, integration, migration, configuration, installation, and project management services; unified storage platforms; virtualization solutions; enterprise security intrusion prevention, network access control, and unified threat management services; IT security compliance services; unified communications, wireless and routing, and switching solutions; custom software applications and solutions development, and support services; maintenance and technical support services; and managed IT services, such as monitoring, reporting, and management of alerts for the resolution and preventive general IT and IT security support tasks. This segment provides its professional services for IT environments, including security, unified communications and collaboration, wireless and mobility, and data center and network solutions. The company markets its products and services through direct sales force and third-party distributors. CSP Inc. was founded in 1968 and is headquartered in Lowell, Massachusetts.
