Some of the world's most successful investors - from Sir John Templeton to Warren Buffett - made their reputations and fortunes by buying undervalued stocks and holding until the rest of the market recognized the stock's true worth.
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Today, however, with the S&P 500 resting atop the 1,400 level and the Nasdaq just over 3,010, finding undervalued issues isn't as easy as it was a few months back.
Fortunately, there are tools that can help you more easily ferret out some of the market's remaining hidden gems and find the best undervalued stocks.
They're called "stock screeners." There are at least a half dozen free ones that you can access online to help you search for value among the more than 8,000 companies traded on the various U.S. stock exchanges and electronic networks.
Some are fairly basic, allowing you to analyze stocks based on just 10 or 12 different criteria, while a couple are quite comprehensive. They let you request data in up to 60 different fundamental, technical and descriptive categories.
Some allow you to enter a range of values - e.g., a price/earnings (P/E) ratio between 12 and 20. Others utilize an over/under format asking you to enter absolute numbers - e.g., a P/E "<18" (18 or less). All allow you to pick only the indicators you're interested in for a given screening.
However, before you can use any screener - and I'll provide links to several of the leading free ones in just a minute - you need to know which fundamental and technical measures are most useful in finding undervalued stocks poised to grow.