Good Cheap Stocks For March 2012

One of the hallmarks of improved investor sentiment is when folks are willing to pay ever greater premiums for equities in expectation of future profit growth. And since the market started rallying from its early March lows, it's clear that sentiment seems to be improving, at least in certain corners of the market.

One indicator of improved sentiment is the rise in forward price-to-earnings multiples. Forward P/E is derived by dividing a company's share price by analysts' average estimate for future earnings per share; for the 500 stocks in the Standard & Poor's 500 Index ($INX), this ratio has risen to 16 from 13 in March, according to The Wall Street Journal Market Data Group.

Such growth is a clear indication that investors are starting to shake off the shock of last year's meltdown and have regained some appetite for risk, says Hank Smith, the chief investment officer of equity at Haverford Investments in Haverford, Pa.

 

As risk appetite grows, Smith says, many bigger, "safer" shares have been left in the dust; that's keeping a lid on the Dow Jones Industrial Average ($INDU). The forward P/E on this bastion of the bluest of blue-chip stocks is less than 14, down from nearly 18 in March, according to Dow Jones Indexes. In other words, as the broader market has gotten more expensive, the Dow has become cheaper.

Such low valuations could lead one to believe that the Dow is just chock-full of blue-chip bargains. In some cases, that's true. But sometimes cheap stocks are a steal, and sometimes they're cheap for a reason.

Here is a look at the Dow's cheapest stocks, as measured by forward P/E, including an assessment as to whether these inexpensive bets are likely to become investor darlings or dogs in the next 12 to 18 months.

Good Cheap Stocks For March 2012:Franklin Universal Trust (FT)

 Franklin Universal Trust is a closed-ended fund balanced mutual fund launched by Franklin Resources Inc. The fund is managed by Franklin Advisers, Inc. The fund invests in the public equity and fixed income markets of the United States. It invests in companies operating in utility sector. The fund employs fundamental analysis to invest in a diversified portfolio of corporate bonds and dividend paying utility stocks. The fund benchmarks the equity component of its balanced portfolio against the S&P 500 Electric Utilities Index and the fixed component against the Credit Suisse High Yield. Franklin Universal Trust was formed on September 23, 14988 and is domiciled in the United States.

Good Cheap Stocks For March 2012:Skystar Bio-Pharmaceutical Company (SKBI)

 Skystar Bio-Pharmaceutical Company engages in the research, development, production, marketing, and sale of veterinary healthcare and medical care products in the People?s Republic of China. Its products include veterinary medicine for poultry and livestock; micro-organism products; bio-pharmaceutical veterinary vaccines; and feed additives. The company offers its products through distributors and directly to customers. Skystar Bio-Pharmaceutical Company is headquartered in Xi?an, the People?s Republic of China.

Good Cheap Stocks For March 2012:Putnam Master Intermediate Income Trust (PIM)

 Putnam Master Intermediate Income Trust is a close ended fixed income mutual fund launched and managed by Putnam Investment Management, LLC. The fund is co-managed by Putnam Investments Limited. It invests in the fixed income markets of the United States. The fund invests in bonds of companies operating across diversified sectors. It benchmarks the performance of its portfolio against the Barclays Capital Government/Credit Bond Index. Putnam Master Intermediate Income Trust was formed on April 29, 1988 and is domiciled in the United States.

Good Cheap Stocks For March 2012:Transportadora De Gas Sa Ord B (TGS)

 Transportadora de Gas Del Sur S.A. engages in the transportation of natural gas, as well as production and commercialization of natural gas liquids primarily in Argentina. It operates approximately 8627 km long pipeline system. The company transports its natural gas to distribution companies, industries, traders, producers, and power plant operators. The company?s production and commercialization activities are conducted at the Cerri Complex located near Bahia Blanca. Its natural gas liquid products comprise ethane, propane, butane, and natural gasoline. It also provides midstream services, which consist of gas treatment, gas compression, and wellhead gas gathering services; removal services for impurities from the natural gas stream; and pipeline construction, operation, and maintenance services. In addition, the company offers telecommunication services for telephone operators and other corporate users. Its telecommunication network includes a microwave's digital system with synchronous digital hierarchy technology. The company was founded in 1992 and is based in Buenos Aires, Argentina. Transportadora de Gas Del Sur S.A. is a subsidiary of Compania de Inversiones de Energia S.A.

Good Cheap Stocks For March 2012:Terra Nova Royalty Corporation (TTT)

 Terra Nova Royalty Corporation operates as a mineral royalty company in Canada. It owns a royalty stream on the Wabush iron ore mine located in Labrador Newfoundland. The company was formerly known as KHD Humboldt Wedag International Ltd. and changed its name in March 2010 to Terra Nova Royalty Corporation as a result of spin off of KHD Humboldt Wedag International Ltd. Terra Nova Royalty Corporation is based in Vancouver, Canada.

Good Cheap Stocks For March 2012:Sanderson Farms Inc. (SAFM)

 Sanderson Farms, Inc., an integrated poultry processing company, engages in the production, processing, marketing, and distribution of fresh, frozen, processed, and prepared chicken products. The company?s prepared chicken product line includes institutional and consumer packaged partially cooked or marinated chicken items. It sells ice pack, chill pack, bulk pack, and frozen chicken in whole, cut-up, and boneless form under the Sanderson Farms brand name. The company sells its products to retailers, distributors, and casual dining operators in the southeastern, southwestern, northeastern, and western United States, as well as to the United States based customers who resell frozen chicken into export markets. Sanderson Farms, Inc. was founded in 1947 and is headquartered in Laurel, Mississippi.

Good Cheap Stocks For March 2012:Skechers U.S.A. Inc. (SKX)

 Skechers U.S.A., Inc. engages in the design, development, marketing, and distribution of footwear for men, women, and children in the United States and internationally. The company offers various products comprising casuals, such as boots, shoes, and sandals for men, as well as slip-ons, lug outsole and fashion boots, and casual sandals for women; dress casuals; relaxed fit for men; sandals; and casual fusion under the Skechers USA brand name. It also provides a line of sport footwear for men and women, including men?s lifestyle athletic footwear, lightweight women?s sneakers, and sport sandals under the Skechers Sport brand name. In addition, the company offers men?s and women?s casuals, field boots, hikers, and athletic shoes under the Skechers Work brand name; and a range of infants, toddlers, boys, and girls? boots, shoes, and sneakers under the Skechers Kids brand name. Further, its product line includes Skechers Active products, such as casual everyday and sport fusion sneakers for females; Tone-ups and Tone-ups Fitness products comprising casual and athletic-inspired sandals for women, as well as sneakers; Shape-ups toning footwear for men and women; and Skechers Resistance Runner technical shoes for runners. Skechers U.S.A. markets its products through department and specialty stores, athletic and independent retailers, and boutiques, catalog and Internet retailers, as well as through own e-commerce Website and retail stores. As of February 15, 2011, it operated 105 concept stores, 99 factory outlet stores, and 40 warehouse outlet stores in the United States, as well as 28 concept stores and 16 factory outlets internationally. The company was founded in 1992 and is headquartered in Manhattan Beach, California.