A market downturn is always a good opportunity to shop for cheap stocks. Some big blue chip names have seen their share prices drop to levels that make them good values. These are everyday household names that participate in different areas of the economy. They all trade in the teens and are attractive for either their upside potential or dividend.
General Electric (GE)
I said the other day that General Electric would be a buy at $15 a share and the stock has finally hit the level. Investors are getting a chance to own a premium name at a discounted price. Shares are trading at just 1.3 times book value. General Electric has $8.50 per share in cash alone on the balance sheet. The stock is currently yielding just under 4%. Anything under $15 a share and General Electric is a bargain.
I have never been a big Cisco fan but at $13.73 a share the stock is just too appealing to pass up. The stock trades at 1.6 times book values and just 9 times its conservative earnings estimate. The company has a remarkable $43 billion dollars in cash on the balance sheet which represents 60% of the current stock price. At $13 a share, there is a lot of upside potential in this name.
This is the second time this week that Pfizer has made my buy list. At $17 a share, the downside risk is minimal at best. I hate the long term capital appreciation opportunity of Pfizer but love the dividend. I am not alone as Goldman Sachs has just added Pfizer to its conviction buy list today. I guess it is the 4.8% yield that makes the stock an appealing one for dividend investors.