9 companies matchUpdated with our data, free, no account

Deep value, with a pulse

A very low earnings multiple is usually a warning. This screen demands a low multiple AND evidence the business still works.

Figure

P/E ratio across the top 9 matches

Look at the spread, not the ranking. If the bars are all the same length, the screen is arbitrary: one point of p/e ratio separates a company that made the list from one that did not, and the cut is doing more work than the data supports. A long tail means the top few are genuinely exceptional and the rest merely qualified.

Figure

What this screen is really buying

Financials

Healthcare

Materials

Consumer

Energy

More than half of these companies are in one sector (Financials). That is worth knowing: this screen has quietly become a sector bet, and if that sector re-rates, every name on the list moves together. Diversification comes from low correlation, not from the length of a list.

Company	Price	P/E	Yield	Moat	Rating
GSK.L GSK plc	£14.60	9.5	4.0%	71	68
RIO.L Rio Tinto	£48.20	9.0	6.2%	60	63
FSR.JO FirstRand	R78.40	11.0	4.5%	72	68
SBK.JO Standard Bank Group	R236.00	9.5	5.2%	68	67
JPM JPMorgan Chase	$198.70	11.6	2.3%	70	69
HSBA.L HSBC Holdings	£7.10	8.5	5.8%	66	66
BATS.L British American Tobacco	£31.20	9.0	8.0%	72	66
SHEL.L Shell plc	£29.10	9.2	4.1%	63	64
BRK.B Berkshire Hathaway	$444.10	9.8	0	78	72

Educational information, not financial advice, and not a recommendation to buy anything. A screen is a place to start reading, never a place to stop.

Why this screen works

The cheapest companies on any screen are usually cheap because the market has correctly worked out that earnings are about to fall. A screen for low P/E alone is a screen for distress.

So this one adds a profitability floor. Cheap, and still earning a real return on the owners' money. That is a much smaller and much more interesting list.

The exact screen

P/E between 0 and 12.
Return on equity above 10%, so it is cheap despite working, not because it has stopped.
Debt to equity below 1.5.

Companies where we hold too little data to judge are excluded rather than quietly ranked.

When this screen is wrong

This is where value traps live. A low multiple can persist for a decade, and being right about the value while nothing ever closes the gap is indistinguishable from being wrong.
For a cyclical, the P/E is lowest at the top of the cycle. Several names here will be about to see earnings collapse.
Ask what the catalyst is. Without one, cheap stays cheap.

Understand it properly

Value investing The P/E ratio, and how it lies to you Normalised earnings: valuing a business through the cycle How to find undervalued stocks