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5 stocks for your watch list

Many investors are finding it increasing difficult to find value in the stock market at present. Of course, investors shouldn’t feel pressured to always be fully invested; patient investors won’t mind increasing their cash holdings until more appealing opportunities present themselves.

However, despite fewer “cheap” stocks being available at present, there are still stocks that look interesting and could be worth a closer look. Here are five to consider.

1. Challenger (ASX: CGF) has consensus earnings (according to Morningstar) for financial year 2014 of 61.4 cents per share (cps). With the shares last trading at $6.13, the stock is on a forward price-to-earnings (PE) ratio of 10 times.

2. Leighton Holdings (ASX: LEI) has a December financial year end, and is forecast to earn 162.7 cps. With Leighton’s share price currently trading at $16.89, this implies a forward PE ratio of 10.4.

3. Lend Lease (ASX: LLC) is forecast to report earnings of 86.1 cps in FY 2014. With the global property firm’s shares trading at $11.13, the stock is on a forward PE of 12.9.

4. Programmed Maintenance (ASX: PRG) shares are selling for $3 and have forecast earnings per share (EPS) of 28.1 cps for the financial year ending March 2014. Based on this consensus figure, the stock is selling on a forward PE ratio of 10.7.

5. STW Communications (ASX: SGN) has consensus EPS of 12.5 cps for the financial year ending December 2013. The stock is trading at $1.50, which implies a forward PE of 12.

Foolish takeaway

The above companies are leading businesses in their respective industries, and each is reasonably well placed to continue to grow as the economy expands, although Leighton and Programmed Maintenance are exposed to the slowing resource sector. While the rallying stock market is making it much harder to identify outright “cheap” stocks, the above five stocks do appear to be “relatively” cheaper than their peers.

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See all posts by Tim McArthur
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