While the short-term market outlook looks fairly uncertain, investors looking to buy longer-term may see several price prospects following the massive decline in stocks so far this year. CNBC Pro ran a screen looking for the cheapest stocks and their historical valuations compared to the rest of the market. Here are the criteria: Cheap relative to market: Forward P/E below 17.38 (the current forward P/E of the S&P 500) Cheap relative to history: Current forward P/E is 50% lower than the average valuation of the past five years . Earnings growth: EPS expected to rise or fall by more than 5% for this year by analysts Here are 9 S&P 500 stocks that made the cut: Ford tops the list with its valuation slump this year as investors has lost some of its enthusiasm for its electric vehicles, causing shares to fall back to the price-earnings ratio for a century-old automaker. Still, many on Wall Street believe that valuation isn’t giving Ford enough credit for its long-term electric vehicle development plan. “If US auto data points prove to be truly reassuring in the coming months, we think sentiment could improve in Ford shares, especially when the underlying company’s story (including major EV launches/ramps) is headed in the right direction.” This suggests the stock should respond well to favorable auto cycle growth,” said a Citigroup note last week. It told clients that the stock could rise in the next three months. Note that the forward P/E is the price-earnings ratio based on earnings projections for the next 12 months. The rest of the list includes pandemic darlings Netflix and Moderna, both of which have crashed back to earth as the US tries to move on from Covid. Note that the list is not all beaten stock. Some energy stocks have made the list with expected earnings growth this year due to higher oil prices, making those stocks look cheap. Exxon Mobil these days only sports a forward P/E of 10.7, which has gone unnoticed by Wall Street. Evercore ISI upgraded Exxon on Tuesday, saying the stock remains cheap even after a 61 percent price rise this year. “Given the long energy cycle ahead and strong earnings (rising returns) in XOM (and Integrated Oil Peers), we think it is worthwhile to consider the ‘true’ multiplier,” the analyst wrote in a note. To be sure, outside of energy stocks, most names are cheap for a reason. If a recession hits, stocks like Ford could continue to get cheap as auto sales take a big hit. But if the US survives a significant economic downturn, it could be a historic buying opportunity for some of these stocks. —With reporting by Michael Bloom
