These days, investors willing to take a risk are like kids in a candy store. Stocks are cheap, and if the economy rebounds, they'll be happy campers indeed.
"Nearly 100 of the 460 companies in the Standard & Poor's 500 with profit forecasts for 2011 are selling at single-digit price-earnings ratios based on those earnings expectations," says Matt Krantz of USA TODAY.
Stocks with PEs under 10 are generally considered undervalued. For some companies this can be the sign of a rough spot in performance.
Yet some analysts think that for many stocks it is only the general distrust in the economy that leaves company's performances underrepresented in the share price.
Hedge funds are taking note. To help you identify the trends of Big Money, we list below the top 10 S&P 500 stocks with a P/E below 10 and significant levels of institutional buying over the last quarter.
Big Money thinks the following names are undervalued at current levels -- do you agree? Use the list below as a starting point for your own analysis.
List sorted by net institutional buying as a % of share float. (Click here to access free, interactive tools to analyze these ideas)
1. Diamond Offshore Drilling
2. Advanced Micro Devices
3. DeVry
4. Tesoro
5. Discover Financial Services
6. Cliffs Natural Resources
7. Humana
8. Forest Laboratories
9. Lincoln National
10. Archer Daniels Midland
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Becca Lipmna does not own any of the shares mentioned above. Institutional investor data sourced from Fidelity. All other data sourced from Finviz.