Also, what are some useful indicators to determine whether a stock is undervalued or overvalued (e.g. P/E ratio)?
Some ASX stocks with a low P/E ratio include:
Boart Longyear (BLY)
Flight Centre (FLT)
Hastie Group (HST)
Incitec Pivot (IPL)
Macquarie Airports (MAP)
Ten Network (TEN)
Some people also use PEG ratios, but I just keep it simple and just use P/E. I’ve been looking for stocks with PE’s between 1 and 12, preferably under 10 to get in before all the speculators. Dividend yield can be useful too.