This is an excerpt from a Seeking Alpha post I published on August 8th:
According to a Zach’s Investment blog post, the average long term P/E for the Dow Industrial (DIA) has been between 14 and 15 for the last 100 years. The current market conditions fall right within that range. The Wall Street Journal estimates the forward P/E for the Dow at 14.51 as of August 8th. Using numbers obtained from Morningstar I found the forward P/E to be about 14.2. This puts the market firmly within the historical average range. I wanted to take a closer look however at the individual components and see which stocks were at the lower end of the average. I used stock information from Google Finance for the YTD returns and Morningstar to conclude on each stocks forward P/E. I also wanted to get a sense of which stocks of the Dow may be the most “unpopular”. Instead of looking at trading volume, (which could easily fluctuate due to stock news) I chose to just use the amount of followers each stock had here on Seeking Alpha to get a better sense of investor interest. This can be seen by the size of the bubbles in the chart below. I’ve included some thoughts below about my findings. . . . .
To read more visit my full post here.