Everyone likes a sale, but most times the really good stuff isn't marked down. It's 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. We at The Motley Fool think this time is now, so we should be able to find some fantastic opportunities 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 further winnow the list to the best opportunities, I searched for stocks:
- With a return on equity of 15% or higher (a good business).
- Near their 52-week lows.
- With a P/E of 17 or less (sign of a decent price).
And the contenders are ...
|
Company Name |
Current CAPS Rating |
Return on Equity (TTM) |
Market Capitalization (billions) |
Price-to-Earnings (TTM) |
% Above 12-Month Low |
|---|---|---|---|---|---|
|
Canon (NYSE:CAJ) |
***** |
15.0 |
$38.5 |
9.1 |
19.1% |
|
General Mills (NYSE:GIS) |
**** |
21.2 |
$19.4 |
15.8 |
13.9% |
|
H.J. Heinz (NYSE:HNZ) |
**** |
43.2 |
$13.0 |
15.2 |
8.2% |
|
Koninklijke Philips Electronics (NYSE:PHG) |
***** |
15.9 |
$22.2 |
2.4 |
6.6% |
Source: Motley Fool CAPS screener, data as of Oct. 10. 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 like the above.
Blue-chip companies like Eli Lilly (NYSE:LLY) or Wells Fargo (NYSE:WFC) 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.
In the coming weeks, Fool co-founder David Gardner and his Motley Fool Pro team will invest $1 million in a portfolio designed to help you make money in any market. The service, which just launched, will rely heavily on proprietary CAPS "community intelligence" data to establish long and short positions in a broad range of securities, including common stocks, publicly traded put and call options, and exchange-traded funds. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.
