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I regularly scour the FTSE 100 for cheap shares and even with the index hitting all-time highs, I’m still finding bargains.
The quickest way I know to check whether a stock is good value is to look at its price-to-earnings ratio. Other measures include the price-to-book ratio and discounted cash flow, but this is my first port of call.
Using the P/E, three stocks stand out, but with a proviso. Cheap doesn’t automatically mean it’s a good time to buy. Sometimes there’s a very good reason a stock is in the bargain bin.
EasyJet shares are grounded
I’ve been tempted by budget carrier easyJet (LSE: EZJ) for a while. It looks dirt cheap with a P/E of 7.6, but it’s struggling to hit take-off velocity.
easyJet shares are down 5% over the past year, at a time when FTSE 100 peer International Consolidated Airlines Group has rocketed 103%. easyJet operates in a…
