Bank of America Corp (BAC), Chevron Corporation (CVX): America: Is It Cheap Enough for Your Portfolio?

Page 1 of 2

U.S. stocks have exploded out of the gate in 2013. The Dow Jones Industrial Average has repeatedly hit new all-time highs while surging nearly 8.6% since the start of the year. Yet despite those impressive gains, the Dow’s maintained a respectable average P/E valuation of just 14.9, a number that’s far from expensive.

Chevron Corporation (CVX)

The best investors know that buying good stocks on the cheap is a recipe for success, however. As U.S. markets have surged, others around the world have experienced mixed results. So just which international markets are too cheap to ignore right now — and which are too expensive for your investment?

Cheap China, expensive America
The United States’ national P/E average of stocks ranks quite a bit higher than the Dow’s — it’s currently at 17.7, still a respectable valuation but more in line with the impressive gains we’ve seen since the start of 2013.

Surprisingly, the U.S. ranks as more expensive than the big winner in 2013 that has gobbled up attention everywhere — Japan. Japanese markets boast a national average P/E of 16.9, even as the Nikkei index has significantly outperformed the Dow to start the year. Fueled by the weakening yen and new Prime Minister Shinzo Abe’s inflationary tactics, the Nikkei has sprinted to gains of more than 20% year to date, and Japanese stocks remain an attractive buy despite the surge. With the country’s central bank unveiling an unprecedented stimulus action this past week, Japan’s set to unload a massive amount of yen into its stagnant economy. It’s a risky move, but Japanese financial stocks in particular stand to reap rewards on the back of easy money.

Not every Asian nation’s doing quite as well as Japan, however. Disgruntled neighbor China, which has singled out Japan’s bond-buying program as the precursor to a currency war, ranks as much cheaper. China sports an average P/E of only 7.9: Chinese stocks have struggled to stay above water to start the year, and the country’s slowdown has worried economists about the second-largest economy’s growth. Hong Kong’s Hang Seng Index has fallen by 6.8% since the start of 2013, although the index sports a slightly higher P/E of 10.9.

While China’s economy is still growing faster than nearly every other advanced nation, it needs to grow at a considerably quicker rate to support its developing middle class. Unless China identifies a plan that will pick up growth soon, don’t be deceived by that cheap valuation: This country’s still experiencing the ups and downs of a developing society, and Japan’s massive stimulus move won’t help Chinese exporters any.

China’s fellow BRIC member, Russia, comes in as even cheaper, with an average P/E of just 6. That’s a cheaper valuation than any member of the Dow currently; the closest blue-chip stock to Russia is Chevron Corporation (NYSE:CVX) , which sports a P/E of 8.9. Coincidentally, one of Chevron Corporation (NYSE:CVX)’s biggest global rivals has become one of Russia’s brightest companies: Russian state-owned oil major Rosneft became the largest publicly traded oil company in the world in March after purchasing TNK-BP, outstripping Chevron Corporation (NYSE:CVX) and fellow energy rivals in size.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!