I think that your opinion about the market ignoring undervalued stocks at the moment is correct. Recently, I think that the focus has been on taking profits, and also buying big cap issues on the recent correction.
Once the current round of profit taking is over, and big caps have reached what is perceived as fair valuation (overvaluation?), I think we will see rotation back into undervalued small cap stocks. This was happening about two months ago before the latest big cap correction. Many of my undervalued issues took a tumble on no negative company information other than a general market tumble. My philosophy is to buy high growth, low P/E stocks and hold them until they reach a fair valuation (i.e. PEG = 1), or the story changes.
Be very careful about the list I posted. Analyst coverage on some of the stocks is very thin, and sometimes outdated. I use this screening as a start point. One must still do your due diligence before investing.
Typically, I send off for an investor relations packet from the companies, including last two annual reports, last two 10(k)s, recent 10(q)s since last 10(k), one year of press releases, recent analysts reports, etc. I also scour the internet for any other information that I can locate (i.e. Silicon Investor, Motley Fool, etc.).
Happy investing. |
