There are a lot of overvalued stocks in the market right now. As great as Neflix’s (NFLX) and Amazon’s (AMZN) business models are I would not touch either stock because of their massive valuations. I would never pay 50 times earnings for any company. These companies trade well above those levels. I prefer to shop in the value section of the market. Here are a few companies that are looking like decent value stocks.
I wrote a post about AOL last week. I felt like the stock was finally a potential buying candidate between $17 to $18. AOL is almost in the sweet spot having dropped to $19.30 a share. The media company is now trading below book value, sales, and earnings growth. At just 3.1 times Enterprise Value/EBITDA, AOL is almost worth a shot. I never thought the day would come that I would say that AOL is a potential buy.
Hewlett Packard (HPQ)
At $41 a share Hewlett Packard is a pretty good buying opportunity. I like the stock at these levels. If it falls to the 30’s, the stock is an absolute steal. As it is you are only paying 7.8 times earnings. $12 billion or more in operating cash flow generated each year leaves a whole lot of room for more dividend increases.
I have already stated why I am a fan of Ford’s stock in the past. Investors are getting a great opportunity to buy shares of Ford for $15. The stock trades at just under 8 times earnings and has tremendous growth potential over the next few years. In my opinion long term shareholders will be rewarded as Ford has been making all of the right moves to broaden its appeal in North America and Asia.
Are there any stocks that you think are looking like good values right now?