The market is coming off of one of its biggest weeks of the year, but there are still plenty of good buying opportunities out there. With the exception of a couple of decent days last week, some stocks remain fairly beaten down. Here are four stocks that may already be oversold. (To help you decide if a company is on the way up, check out Qualitative Analysis: What Makes A Company Great?)

TUTORIAL: Financial Ratios

A Tale of Two Tapes
In just the last three months, Intel (Nasdaq:INTC) and Advanced Micro Devices (NYSE:AMD) have seen their stock prices head in very opposite directions. INTC shares have spiked 14.3% while AMD shares have declined by 15.0%.

AMD now sits at a forward P/E of 9.5 and has said that it is seeing strong demand for its Fusion accelerated processing units. In Q1, its non-GAAP revenue inched up slightly on a year-over-year basis. Potential investors should keep in mind that AMD has been fighting a decline in the average selling price for its microprocessors and this trend may have yet to bottom out.

The glassmaker Owens-Illinois (NYSE:OI) recently lowered its Q2 outlook saying that operating profit margins may be 3% to 6% below what they were a year ago. The reaction to this news seems to be a bit overdone as the stock has fallen about 14% in the past month. The stock now rests at a forward P/E of 8.4. (To get a better understanding of what all these numbers mean, read What Are A Stock's "Fundamentals"?)

Nerves of Steel
Steel Dynamics (Nasdaq:STLD) is in a similar situation to Owens-Illinois. The company recently announced that its Q2 EPS would come in below analyst estimates as it has been experiencing tighter margins in its metals recycling business. STLD shares are now over 11% lower than where they began the year and trade at a forward P/E of 7.5.

It does not appear that Steel Dynamics is in all that bad of shape. Its shipments continue to trend upwards and pricing has improved dramatically for the company. The company has reported weakness in the non-residential construction market for steel, but has a diverse portfolio of operating segments. STLD also sports a relatively high dividend yield for a steel company at 2.4%.

One other steel stock that may already be oversold is Reliance Steel (NYSE:RS). The stock has dropped almost 16% during the past three months and carries a forward P/E of 8.5. At this point, it would not take much favorable news in the steel markets to give RS shares a quick bounce, but investors may need to be a little bit patient with either of these steel plays.

The Bottom Line
Even as the market has roared back, they are still a number of stocks worthy of consideration for value oriented investors. Knee-jerk reactions to the slightest bit of negative news can send a stock into a tailspin where it can take some time for investors to realize that the sell-off was unwarranted. These are four stocks that might fall into such a category. (For more help on value investing, see The Value Investor's Handbook.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Stock Analysis

    How to Find Quality Stocks Amid the Wreckage

    Finding companies with good earnings and hitting on all cylinders in this environment, although possible, is not easy.
  2. Stock Analysis

    Analyzing Sirius XM's Return on Equity (ROE) (SIRI)

    Learn more about the Sirius XM's overall 2015 performance, return on equity performance and future predictions for the company's ROE in 2016 and beyond.
  3. Stock Analysis

    Will Virtusa Corporation's Stock Keep Chugging in 2016? (VRTU)

    Read a thorough review and analysis of Virtusa Corporation's stock looking to project how well the stock is likely to perform for investors in 2016.
  4. Stock Analysis

    Analyzing Porter's Five Forces on JPMorgan Chase (JPM)

    Examine the major money-center bank holding firm, JPMorgan Chase & Company, from the perspective of Porter's five forces model for industry analysis.
  5. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  6. Stock Analysis

    Analyzing Dish Network's Return on Equity (ROE) (DISH, TWC)

    Analyze Dish Network's return on equity (ROE), understand why it has vacillated so greatly in recent years and learn what factors are influencing it.
  7. Fundamental Analysis

    5 Must-Have Metrics For Value Investors

    Focusing on certain fundamental metrics is the best way for value investors to cash in gains. Here are the most important metrics to know.
  8. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  9. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  10. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  3. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  4. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  5. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  6. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center