Stock Picks and Politics: Four Companies to Buy Cheap After CEOs Meet With Obama
Administration staffers say this meeting is part of Obama's normal efforts to reach out to the business community, but it's likely that the president invited these CEOs to the White House now because he was stung by the $30 million spent by the U.S. Chamber of Commerce -- a private lobbying group -- to back Republican candidates in the midterm elections.
Of course not. However, it may get these savvy CEOs some goodies, which could lead to positive surprises down the road for shareholders. It's impossible to guess which of the companies might benefit, but it's not as hard to see which are trading at the lowest levels, based on their price/earnings to growth (PEG) ratios. (In my opinion, a PEG below 1 makes a stock a good value.)
So, here are the four of those 17 publicly traded companies that are cheapest relative to earnings ranked by PEG:
- Honeywell (HON): 0.30 based on a P/E of 19.8 on earnings forecast to grow 66% to $3.67 in 2011.
- Dow Chemical (DOW):0.73. P/E: 23.8; earnings +32.4% to $2.44 in 2011.
- Boeing (BA):0.87. P/E: 13.8; earnings +15.8% to $4.62 in 2011.
- Cisco Systems (CSCO):0.88. P/E: 14.4; earnings +16.4% to $1.63 in 2011.
With stocks hitting their highest level in years, these four may have further to run.