After 20,000 milestone, finding cheap Dow stocks gets harder. Here are three

Published Fri, Jan 27 20172:46 PM EST

After the Dow Jones industrial average rose above the key 20,000 level this week, CNBC PRO sought to find out if there were any cheap members of the blue chip benchmark left. In the past three months, the Dow is up 10.5 percent in a continuation of the stock market's postelection rally. After the strong gains, only three Dow components have a forward 12-month price-earnings ratio below their five-year average forward multiple, a simple analysis often used by value investors to spot cheap companies. Below we highlight the five companies trading at the lowest multiples in relation to where they've traded in the past. One of the stocks on the list is Nike , which has a forward P/E ratio of 21 compared with a historical multiple of 22.3, according to data from FactSet. In October, CNBC PRO referenced research from Susquehanna Financial Group, which initiated Nike with a positive rating, alerting clients to a "rare opportunity" to pick up shares of a world-class company trading near a 52-week low. "The point is, Nike has a host of drivers and levers at its disposal across geographies vis-a-vis its: 1) robust innovation engine, 2) extensive scale and reach, 3) unmatched marketing prowess and 4) highly sophisticated (and improving) grassroots go-to-market strategy," equity analyst Sam Poser wrote in a research note. Since he made that call, Nike's stock has gone up a modest 3 percent. Susquehanna's 12-month price target of $63 implies a gain of nearly 17 percent from where the stock currently trades. While it is not trading below its five-year average, Wal-Mart is relatively cheap with a forward P/E ratio of 15.1, slightly above its five-year multiple of 14.6, according to FactSet. This week, analysts at Wells Fargo resumed coverage of Wal-Mart with a market perform rating and a $70-$72 valuation range, which implies a potential gain of as much as 8 percent from here. "As the largest brick-and-mortar retailer in the U.S., we believe WMT is well-positioned to benefit from improvements in U.S. consumer spending, and we see long-term (LT) opportunities from a more robust e-commerce platform plus a host of domestic and international store initiatives to drive growth," equity analyst Zachary Fadem wrote in a research note. "We see WMT in the early stages of a multiyear reinvestment cycle focusing on store upgrades, sharper pricing and improved e-commerce relevance," he said.

A Nike shoe is displayed in a window at a Nike store in San Francisco.

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After the Dow Jones industrial average rose above the key 20,000 level this week, CNBC PRO sought to find out if there were any cheap members of the blue chip benchmark left.

In the past three months, the Dow is up 10.5 percent in a continuation of the stock market's postelection rally.

After the strong gains, only three Dow components have a forward 12-month price-earnings ratio below their five-year average forward multiple, a simple analysis often used by value investors to spot cheap companies.

Below we highlight the five companies trading at the lowest multiples in relation to where they've traded in the past.