Bargain shoppers may have their time cut out for them, as many exchange traded funds (ETFs) are touting low price-to-earnings ratios (P/E Ratios).
The P/E Ratio is a valuation of a company’s current share price compared to its per-share earnings. Generally, a high P/E indicates that investors are expecting higher earnings growth in the future.
The exact bottom of some of the most beat up sectors is unknown, but long-tern value seekers should be on the lookout, according to Gary Gordon for ETF Expert.
Gordon points out the Dow Jones US Insurance Index (IAK) which is near its 52-week low, and trading at a multiple of 8.7. It’s been bearing the brunt of the subprime mess, however, don’t forget how profitable insurance companies can be.
iShares Nasdaq Biotechnology Index (IBB) is trading at a P/E of 11, where biotech companies usually have a historic multiple of 20.
At the bottom of the bin is the S&P Homebuilder Index (XHB) at a P/E of 4.25. This is for the hardiest of investors who can see long-term opportunities amidst all the gray.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.