With the ASX continuing to shrug off its mid-winter blues and reach six-year highs, being a value investor may feel like a tough existence right now. Indeed, when share prices are generally high, finding a bargain can be more of a challenge. So, with that in mind, here are three stocks that could be classed as essential stocks for value investors at the present time.
Monadelphous Group Limited
Results released by mining services business Monadelphous Group Limited (ASX: MND) this week showed that the company, while making strong headway with its cost-cutting programme, is seeing its top and bottom lines decline. A key reason for this is a reduction in demand for its mining work, with the next two years expected to see earnings fall by around 6.9%. However, Monadelphous may have potential as a value play, since shares in the company now trade on a P/E of just 10.9 (versus 16.4 for the ASX) and also offer a fat, fully franked yield of 7.6%. As a result, there seems to be significant scope for an upward rating revision, as well as strong income returns moving forward.
STW Communications Group Ltd.
Shares in media operator STW Communications Group Ltd. (ASX: SGN) have disappointed of late, with them being down 15% in the last month alone. A key reason for this has been a fairly downbeat set of results that showed an increase of just 1% in EPS. However, the future could be a lot brighter for the company and its investors. That's because STW is forecast to increase its bottom line by 5% over the next two years, which may not sound much until you realise that there is vast scope for an upwards rating revision too. STW trades on a P/E of just 10, which is 28.5% lower than the media sector P/E of 14 and 39% below the ASX P/E of 16.4. Meanwhile, a fully franked 6.9% yield should help to bolster total returns over the medium term.
Cardno Limited
Although 2014 has been a disappointing year thus far for engineering business Cardno Limited (ASX:CDD), with shares falling by 3%, it could have a bright future. Earnings are all set to increase by 4.7% over the next two years, while a P/E of 13.1 is well behind the ASX's P/E of 16.4 and makes Cardno a potential value play. Allied to this is a 100% franked yield of 5.4% that is expected to see dividends per share grow by 6.7% over the next two years. Therefore, as with STW and Monadelphous, Cardno could prove to be an essential stock for value investors moving forward.
