Profits for Dollar Tree, which sells everything from toys to pet food for $1 or less, will rise 24 percent in fiscal 2013, ending in January, and 13 percent the next year, according to analyst estimates. While the shares have almost tripled since March 2009, the price-earnings ratio at 16.7 is 21 percent below the five-year average.
Southwest Airlines Co. trades 22 percent below its historic valuation, even though earnings at the Dallas-based company have surpassed analyst projections for the past five quarters and are forecast to rise 65 percent in 2013. The shares are up 4.3 percent in 2012.
Of the 500 companies in the index, 245 have price-earnings ratios below their five-year means, data compiled by Bloomberg show. That's up from 196 at this time last year and 174 two years ago, the data show.
Bull markets "normally finish with a real burst of hyper enthusiasm," Michael Shaoul, chairman of New York-based Marketfield Asset Management, which oversees $3.5 billion, said in a phone interview. "We haven't seen the beginning of that yet. The transition from tepid enthusiasm to hyper enthusiasm is going to be worth few hundred points in the S&P."