Investing in low P/E stocks can prove to be a good bargain for investors as the P/E ratio is a snapshot of a firm’s earnings strength. However, the only hitch in this old school of investing is that P/E ratio hardly conveys a company’s future earnings growth.

Investors can easily fall prey to a value trap if the P/E ratio of a stock is low for a valid reason such as weak fundamentals. Therefore, it is essential to take the company’s earnings growth prospects into account before taking the dive with only low value stocks as lifeguards.

A thorough analysis of the company’s growth potential to determine if the particular company has a bright future along with low P/E will assure more returns. So we have shortlisted low P/E stocks with great growth potential and favorable Zacks Rank.

4 Stocks to Bet On

With the help of our Zacks Stock Screener, we have sorted four stocks that sport a Zacks Rank #1 (Strong Buy), trade at a Price/Earnings (F1) ratio of less than 15, carry a Growth Style Score of ‘A’ with projected EPS growth rate (F1/F0) of 20% or higher.

Using our new style score system, one can locate stocks that have a solid upside potential. Our Growth Style Score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth. Our research shows that stocks with Style Scores of ‘A’ or ‘B’ when combined with a Zacks Rank #1 or #2 offer the best investment opportunities.

Cal-Maine Foods, Inc. CALM is engaged in the production, cleaning, grading and packaging of fresh shell eggs for sale to shell egg retailers. The Mississippi-based company is the one of the largest producers and distributors of fresh shell eggs in the U.S.

Zacks Rank: #1
P/E (F1): 6.15
Growth Score: ‘A’
Projected EPS Growth: 152.4%

The Pennsylvania-based Trinseo SA TSE is a global materials company and manufacturer of plastics, latex and rubber. The company's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires.

Zacks Rank: #1
P/E (F1): 6.92
Growth Score: ‘A’
Projected EPS Growth: 2535.6%

Rentech Nitrogen Partners, L.P. RNF is a nitrogen fertilizer company and operates as a subsidiary of Rentech, Inc. The California-based company produces anhydrous ammonia, and urea ammonium nitrate solution.

Zacks Rank: #1
P/E (F1): 9.02
Growth Score: ‘A’
Projected EPS Growth: 192.7%

The Texas-based Hallmark Financial Services Inc. HALL is an insurance holding company, which markets, distributes, underwrites, and services property/casualty insurance products to businesses and individuals in the U.S. The company operates in the Standard Commercial, Specialty Commercial, and Personal segments.

Zacks Rank: #1
P/E (F1): 11.43
Growth Score: ‘A’
Projected EPS Growth: 49.3%