Image source: Getty Images
When searching for cheap FTSE shares, many investors lean on well-known valuation metrics such as the price-to-earnings (P/E) ratio or the price-to-book (P/B) ratio. These figures can offer a quick snapshot of how the market currently values a business relative to its profits or assets.
A low P/E might hint at a bargain — or it could be flashing a warning sign. That’s because these numbers alone don’t guarantee growth or a turnaround. They’re anchored in current or forecast earnings that depend on wider economic conditions, demand, supply chains and consumer habits. In other words, today’s ‘cheap’ stock might stay cheap if profits don’t recover.
Two FTSE shares currently stand out to me with P/E ratios under 7. But do they represent genuine bargains, or potential value traps?
The struggling private label goods giant
McBride (LSE: MCB) is Europe’s largest…
