Apollo Group Inc (APOL), Western Digital Corp. (WDC), Seagate Technology PLC (STX): The 5 Cheapest Stocks in the Market

CF Industries Holdings, Inc. (NYSE:CF) , 6.71 P/E
Fertilizer-maker CF Industries has benefited from favorable conditions in the agricultural market for years now. Combined with benign cost considerations for fertilizer production, CF has reaped the rewards in strong earnings. Unfortunately, rising natural gas prices could start to hamper its profit growth, as the energy source is a major component of the company’s production process.

As the ag market starts to revert to more normal conditions, analysts see CF’s earnings falling by 7% to 10% annually in 2013 and 2014. Yet as long as earnings hit bottom near their 2014 levels, then the stock would still have a forward multiple of just 8 — an attractive level even for a cyclical company.

Pitney Bowes Inc. (NYSE:PBI) , 6.90 P/E
One of the most remarkable things about seeing Pitney Bowes on this list is that its shares have already risen more than 40% this year, recouping a big chunk of its 2012 losses. The company that once dominated the postage-meter business has worked hard to restructure and find a new strategic direction, yet investors have been skeptical of Pitney Bowes’ ability to compete well in the enterprise-communications area.

Even with those concerns, investors seem prepared for Pitney Bowes to hit bottom in 2014 from an earnings standpoint after seeing about an 11% drop in earnings per share in 2013. If that proves to be the low point for Pitney’s earnings, then a forward P/E of less than 8 would give value investors a reasonable shot at long-term gains.

Bargains worth looking at
Cheap stocks aren’t always good stocks, and these companies all have challenges to face. But if you think that they’re up to the task, then the low stock prices these companies give you the potential for some lucrative gains over the long haul.

The article The 5 Cheapest Stocks in the Market originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool owns shares of CF Industries and Western Digital.

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