Here are 7 'cheap' stocks

Based on projected earnings, these seven stocks look like a bargain.

Valero

cheapest stock valero energy
  • Forward P/E: 7.6
  • 2014 stock performance: -0.8%

Valero Energy (VLO) may be the cheapest stock in the S&P 500.

Investors like to value stocks based on their projected profits, or forward price-to-earnings (P/E). Based on that measure, Valero's price tag is the least expensive among S&P 500 companies with a market value of at least $15 billion.

Why? The market is clearly spooked by America's decision to allow some ultra-light crude oil to be exported. The fear is the move could boost domestic oil prices and raise costs on American refiners like Valero, which tumbled about 10% on the June 25 export announcement.

Yet Wall Street is signaling the selling may be overdone.

A lofty 71% of analysts who cover Valero have a "buy" rating on the stock, up from 61% in April. And the average price target of nearly $64 is well above the current price of around $50.

That means either Wall Street needs to ratchet its targets down, or the market may be undervaluing Valero shares.

- Last updated July 17 2014 01:01 AM ET
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