3 great financial stocks that are getting cheaper by the day

Don't buy just because a share price drops, it could still be expensive.

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Last week, Platinum Asset Management Limited (ASX: PTM) fell around 8% as stocks with exposure to US equity markets were sold down. That selling has continued on Monday with Platinum losing over 2% by mid-morning. While it's never any fun as a shareholder watching your investments fall, it is part and parcel of investing. More so, share price falls can create opportunities to pick up stocks at enticing prices and this is really what investors should be concerned with.

Unfortunately – for investors looking for a buying opportunity – Platinum probably has to fall a lot further before it becomes appealing. Despite falling around 10% in two days the stock has still registered gains of over 32% in the past 12-months and trades on a forward price-to-earnings (PE) multiple of 20.

Meanwhile investment bank Macquarie Group Ltd (ASX: MQG) is down nearly 4% in the past week. In many ways Macquarie is holding up well considering how exposed the firm is to buoyant financial markets. At a recent presentation, the group provided an earnings update and once again stressed that the outlook remained subject to market conditions. These conditions can indeed play havoc with management's expectations; however given guidance is for a 40-45% increase in FY 2014 earnings and Macquarie is trading on a consensus forecast PE of just 15.4, any share price retraction could represent a buying opportunity.

AMP Limited (ASX: AMP) has been something of a quiet achiever this calendar year. The insurer suffered difficult trading conditions within its wealth protection business in 2013 which led to an underperforming share price. Despite opening lower today, AMP has actually rallied 19% since the beginning of February. Some investors may be kicking themselves that they didn't pick up AMP a couple of months ago – which is understandable – but with volatility on the rise they may just get another buying opportunity around the $5 mark.

AMP, like Macquarie looks like a good candidate for the watchlist right about now.

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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