5 Blue-Chip Stocks on Sale

Everyone likes a sale, but most times the really good stuff isn't marked down. It is similar in the stock market -- the blue-chip companies, the best of the best, are rarely on sale. But sometimes they are.

Sometimes the market falls to a point where some of the biggest and best companies trade at very cheap prices. Some of us here at The Motley Fool think this time is now, so we should be able to find fantastic values out there.   

To look for such bargains, I used the screening tool found in CAPS, the Fool's community intelligence database of 115,000-plus investors.

CAPS weighs in
I screened for large-cap consumer goods stocks with four- or five-star CAPS ratings (the best) and 200 or more active picks. To winnow down the list to the best opportunities, I included these parameters:

  • A return on equity of 15% or higher (a good business).
  • Stock near its 52-week low.
  • A P/E of 17 or less (sign of a decent price).

And the contenders are:

Company

CAPS Rating (out of 5)

Return on Equity (TTM)

Market Cap ($B)

Price-to-Earnings (TTM)

% Above 12-Month Low

British American Tobacco (AMEX: BTI  )

****

34%

71

16.2

9%

ConAgra Foods (NYSE: CAG  )

****

17%

11

11.9

20%

Diageo (NYSE: DEO  )

*****

42%

48

15.3

8%

Toyota Motor (NYSE: TM  )

****

15%

145

16.8

11%

Unilever N.V. (NYSE: UN  )

****

33%

49

13.4

6%

Source: Motley Fool CAPS as of Aug. 18. TTM = trailing 12 months.

These multibillion-dollar blue chips have high ratings in CAPS, good returns on equity, and trade near their 52-week lows, which can often be the best time to buy strong companies. Would you rather buy a solid business like Unilever at its 52-week high of $37 per share, or near its 52-week low of $27 per share? If you answered the latter, now is your chance.  

Blue-chip companies like General Electric (NYSE: GE  ) or Disney (NYSE: DIS  ) might not go up 25% for you each year, but they shouldn't go down too much, either. If you can buy them at cheap prices (like now), you will greatly improve your prospective returns. So, play around with some CAPS screens and see if you can unearth other fantastically priced blue chips for your portfolio. 

Come join us on CAPS to investigate these and countless other interesting stock ideas, and perhaps rate some stocks of your own. 

Walt Disney is a Stock Advisor recommendation. Diageo is an Income Investor choice. Try any of our Foolish newsletters today, free for 30 days.

Fool analyst Andrew Sullivan likes blue chips (the stock and potato kind) but does not have a financial position in any of the stocks mentioned in this article. The Motley Fool has a disclosure policy.


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