Biggest Changes in Valuations Since the 10/9 Top

The market peaked on the first day of third quarter earnings season on 10/9.  The unofficial end to earnings season came on Tuesday when WMT reported quarterly results.  During earnings season, valuations change significantly along with earnings estimates.  Below we highlight the change in next year's estimated P/E ratios for the 30 Dow stocks from the October 9th peak.  As shown, Citigroup's (C) estimated P/E ratio is down 18.54% since 10/9 from 9.82 to 8.00.  The stock is down 27% over the same time frame.  AIG's P/E is down 16.63%, MMM's is down 15.59% and IBM's is down 13%.  In general, the stocks that have seen price declines have also seen P/E declines.  GM, however, has seen an 18% rise in its estimated P/E ratio, but its stock price is down 21%. 

We also found the stocks in the Russell 1,000 with the biggest declines and increases in estimated next year P/E ratios since the 10/9 market peak (we only looked at stocks with positive earnings).  PHM's estimated P/E has actually gone from 115 down to 14.45.  The stock is down 12%, but that's not bad for a homebuilder.  LBTYA's P/E has declined 68%, ABK's has declined 58% and LEAP's has declined 53%. 

We also list the stocks in the Russell 1,000 with the lowest estimated next year P/E ratios at the moment.  As shown, ABK is at 3.44, ACF is at 4.55, ETFC is at 4.68, MBI is at 5.52 and LCC is at 5.56.  CFC's estimated P/E is at 6.13, and the only big broker on the list is MS at 6.94.  It's also surprising to see NutriSystem (NTRI) on the list with an estimated P/E of 6.77, giving it a PEG ratio of 0.34.  Now that's a low value growth stock!   

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