Once again, the major indices are trading at/near new record highs. As a result, valuations are stretched to the upside. For those of you who like to buy under-valued stocks, here are three shockingly cheap stocks that are about to breakout (in descending order). There are many ways to define “cheap” on Wall Street, so for the purposes of this article, I’m using the standard price-to-earnings (P/E) ratio from multiple sources.
Micron Technology: P/E Ratio (TTM) 7.11
The first stock on my list is Micron Technology. Micron just reported earnings and is trading near a fresh 52-week high. The stock has been a leading stock all year and is consolidating now as it sets the stage for its next move. I was very surprised to see Micron’s P/E ratio at only 7.11. It is also encouraging to see the stock trading just below its 52-week high which makes it ripe to breakout.
Ciena Corporation: P/E Ratio (TTM) 5.57
Ciena Corporation is the second stock on my list and currently enjoys an even lower P/E ratio of 5.57. The stock has enjoyed large gains in the past and is enjoying some healthy technical signs for those of you who like to analyze charts. The first bullish sign came a few weeks ago when big investors defended the 200 day moving average. Then, then the buying continued and the stock jumped above its 50 day moving average line which is another bullish sign.
CNX Resources Corporation: P/E Ratio (TTM) 4.15
CNX Resources is the last stock on my list and it sports the lowest P/E ratio on my list at only 4.15. That makes CNX one of the cheapest stocks on the Street right now. The stock is acting well and is trading above its 50 day moving average and below its 52-week high which makes it a ripe candidate to breakout. Additionally, the fundamental case for energy is bullish as well because, as the economy continues to grow, so will demand for energy. CNX Resources is an independent oil and natural gas company, explores for, develops, and produces natural gas in the Appalachian Basin so it is well positioned to capitalize on this growth.
These are just a few of the under-valued stocks that showed up on my radar this week. Even with the market trading at/near record highs, it is encouraging to see cheap stocks that are poised to breakout.
Position in MU