Bargains abound in big U.S companies - Barron's

Thomson Reuters






NEW YORK, July 4 (Reuters) - Big U.S. companies are cheaply
valued in the stock market, providing plenty of opportunities
for bargain hunters, said Barron's in its July 5 edition.

Thirteen of the top 25 companies in the S&P 500 now trade
at, or below 10 times estimated 2011 profits, said Barron's.

This includes International Business Machines Corp ,
Exxon Mobil Corp , Microsoft Corp , Intel Corp
, Merck & Co Inc and Hewlett-Packard Company
.

The low price-to-earnings ratios reflect the indifference
among investors to U.S. stocks and scepticism over bullish
profit forecasts for next year in the face of a weakening
global economy, said Barron's.

Still, if there is no profit collapse, stocks look good,
according to Barron's. The forward price-to-earnings on the S&P
500 index is below 12, the lowest since the late 1980s.

Oppenheimer strategist Brian Belski told Barron's the S&P
500 could hit 1,300 this year, 27 percent above its current.
level.

Investors are being defensive at the moment but they are
holding high levels of cash and will jump back into the markets
once they start moving higher, Belski said.

In addition, corporate balance sheets are strong and many
companies are boosting dividends and repurchasing stock,
Barron's said.
(Reporting by Helen Kearney; Editing by Marguerita Choy)