3 Interesting Stocks with P/E Ratios Below 10

US stocks are on track to close lower for the third straight month. This will be the first time this has happened since the fall of the pandemic in early 2020.

Contributor Depositphotos.com/Depositphotos.com – MarketBeat

With no end in sight to the Russian offensive in Ukraine, equity markets in other parts of the world are also nervous. Outside of the energy sector, stock prices continued to decline amid heightened geopolitical uncertainty and exploding commodity prices.

This means that the price-to-earnings ratio, or P/E, also falls for most firms. Around 22x before the start of the Russia-Ukraine crisis, forward P/E on the S&P 500 had dropped to 19x, the first sub-20x reading since the start of the Covid period.

It’s a risky market to buy, but the truth is domestic stocks haven’t shown such valuation in a long time. A high double name can remain a target for further compression so stocks with low P/E are relatively unharmed.

In the low P/E group investors will find several companies with declining valuations and limited bargaining. These three stocks have P/E ratios below 10 and favorable risk-reward profiles.

What is Good Steel Stock?

Reliance Steel & Aluminum Co. (NYSE:RS) trading at 8x estimated earnings this year. Metal producers rose to a record $194.91 last week on soaring prices for carbon and stainless steel, which together account for about three-quarters of revenue. The $15 pullback since then has presented a more ideal entry point for a stock that would continue to trend higher in a year already dominated by rising commodities.

As the largest metal service center in North America, Reliance provides more than 100,000 metal products along with processing services to a wide range of customers. Its largest market, the commercial construction industry, is experiencing increased supply activity and is expected to be a source of strong demand. Customers in the auto, aerospace and energy markets are also showing strong demand with the industry entering recovery mode.

Reliance’s diverse customer base combined with higher prices drove a 60% jump in sales last year. And with steel rebar prices already up 12% this year and ongoing US infrastructure projects, things are looking for 2022. Bars (steel) will set high after 2021’s stellar performance, but current valuations are making Reliance a steal.

Do Builders FirstSource Stock Buy?

Builders FirstSource, Inc. (NYSE: BLDR) is an underrated construction game of a different kind. It has also fallen from a recent record high to 20%. With less than 8x future income, the country’s leading supplier of building materials may be the cheapest way to invest in the US homebuilding and remodeling boom.

With more than 550 locations in 39 states, Builders FirstSource is a one-stop shop for home builders, subcontractors, and self-employed workers. His offerings run the entirety of residential construction from floor to roof to wall to window.

Among the biggest trends to come out of the pandemic is the increasing interest in home remodeling and remodeling. A seller’s market and near-record low mortgage rates are encouraging other homeowners to build. This trend has become a powerful two-pronged demand engine for Builders FirstSource products and services.

The company is coming off a banner year in which sales rose 56% to a record $19.9 billion. Hopes for a healthy housing market in 2022 have management predict another strong year.

While Builders FirstSource won’t continue to generate the kind of growth it did in 2021, its projected 10% annual sales growth through 2025 will keep the business running well above anticipated US GDP growth. A healthy housing market, solid balance sheet and focus on digital innovation make this company a worthy addition to a long-term growth portfolio.

Is Whirlpool Stock Undervalued?

Some manufacturers have been challenged by current economic headwinds as much as Whirlpool Corp. (NYSE: WHR). Home appliance makers continue to face a one-two punch from supply chain disruptions and rising raw material costs. While things like higher shipping and steel costs have weighed on margins, the good news is that the underlying selling trend is positive.

After posting a 13% jump in revenue last year, consumer demand for washers, dryers, refrigerators and other household appliances is expected to grow by 2022. And with roughly half of sales generated outside the US, Whirlpool has strong regional diversification. good to follow. with a diverse lineup of brands, including KitchenAid, Maytag and Consul.

Despite supply chain woes and cost inflation, Whirlpool has been able to beat consensus revenue estimates for the 14th straight quarter. This demonstrates management’s ability to manage costs and implement price increases effectively to take advantage of a healthy background of demand.

With the logistics nightmare expected to subside as the year progresses, management casts a somewhat dreamy tone in its 2022 outlook. Although high steel prices are expected to reduce profitability by at least $1 billion, the company expects price hikes and a better product mix to drive the 6 % in operating margin.

EPS is estimated at $27 to $29. At the midpoint, this implies a forward P/E of only 7x. At this assessment, investors must buy, rinse, and repeat.