Four Bargain-Priced Financial Names
On Monday, Four Bargain-Priced Tech Names was one of Benzinga’s most popular stories.
As a result, we’re continuing the series by exploring the financial sector.
If you read yesterday’s story, you know that we found four technology stocks that were trading below the average sector P/E of 22.7. Just like Monday, the ground rules are:
- The company has to have a market cap above $300 million;
- Trades an average of at least 400,000 shares daily;
- Has a P/E below 13.7—the average P/E of the financial sector;
- You can put these names on your research list but no buying on this single data point.
With those rules in mind, here we go!
AFLAC Inc. (NYSE: AFL)- You have to love those AFLAC duck commercials but the stock, which has had an impressive run this year, trades at a significant discount to its peers. At only eight times earnings, this is a stock that’s up 25 percent since April. The overall market weakness has caused a pullback to its 50 day moving average.
JPMorgan Chase (NYSE: JPM)- Bottom line—this stock is cheap! You could pay 12 times earnings for Wells Fargo (NYSE: WFC), 30 times earnings for Bank of America (NYSE: BAC), or 8 times earnings for JPMorgan. Even better, this is a stock that is selling off. It broke below its upward trend line as well as all major moving averages but has some support levels down to $50. This is one of those names where selling isn’t a sign of problems at the company. It’s likely a stock on sale.
Capital One Financial Corp. (NYSE: COF)- Another name with cool commercials but that’s no reason to buy a stock. What is a good reason is the forward P/E of only 9, the 1.8 percent dividend, and the chart. The uptrend in the stock started in March and looks quite healthy. In most of June, the stock consolidated before rocketing to 52 week highs. Now, it is testing its 50 day moving average. If it holds, and the broader market shows signs of stabilizing, Capital One looks great!
Goldman Sachs (NYSE: GS)- If you look at the average P/E of the large investment banks, you find an average of 18.3. Goldman Sachs sports a forward P/E of 10 and if you’re a stickler for a Dow-theory-looking chart, go no further.
Charts that go straight up without any profit taking have to break down and when they do, it will be carnage. (Tesla (NASDAQ: TSLA) comes to mind.) Goldman Sachs continues higher but has seen healthy sell-offs along the way. Currently, it’s flirting with its 50 day and lower trend line support. If it bounces off these levels, that’s a strong sign that the uptrend is intact.
Disclosure: At the time of this writing, Tim Parker had no position in the above named securities.
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