When looking ahead to 2016, investors must ask themselves what is the best way to gauge the market and what metrics they should be using. Looking back at 2015, it was a relatively flat year that was more or less governed by falling oil prices, among other things.

24/7 Wall St. is taking a look at the bottom line for companies in the S&P 500 going into 2016, and we have chosen some of the least expensive stocks for the year. In determining the “least expensive” companies, these were merely based on the lowest forward price-to-earnings (P/E) ratio. Included along with each was the recent trading history, the consensus analyst price target from Thomson Reuters and additional color for what is happening or may need to be watched ahead.

Whether these companies are ripe and ready to buy or a value trap is the question that will be answered in 2016.

It is no surprise that this list would be dominated by major airlines, as the result of incredibly low oil prices, but we have only chosen one, with a couple of honorable mentions.

Micron Technology

Being absolutely destroyed in 2015 earned Micron Technology Inc. (NASDAQ: MU) a spot on this list. The stock dropped roughly 60% over the course of the year. Expected 2016 EPS is $1.49, making the forward P/E ratio 9.73. Micron’s severe drop in price might put it back to where it was years ago when it was valued as a growth stock. However, to truly take advantage of this, Micron would have to make some strategic acquisitions, then we might see this semiconductor giant on the rise again.

Shares of Micron were recently trading at $14.50, with a consensus analyst price target of $18.45 and a 52-week trading range of $13.50 to $35.74.

Macy’s

Macy’s Inc. (NYSE: M) is one of the least expensive retailers going into 2016. Its P/E ratio is 8.91, when compared to 2016’s expected earnings. Most retail stocks had a less than stellar performance in 2015’s holiday season as the result of Amazon dominating the e-commerce market. Fewer consumers are coming out to fight the crowds and more are staying in and ordering their Christmas goods online. This wasn’t so much of a factor on the forward P/E as the drop in the current price level, making Macy’s more attractive going into 2016.

Macy’s shares were last seen trading at $35.82. The consensus analyst price target is $45.05, and the 52-week trading range is $34.05 to $73.61.
Gilead Sciences

Not only is Gilead Sciences Inc. (NASDAQ: GILD) one of the strongest biotech companies on the market, but it is one of the cheapest. Over the past couple of years, this company has experienced a boom in its pipeline surrounding its hepatitis C virus treatment. That has had an incredible impact on both the top and bottom lines. The stock has a forward P/E ratio of 8.52, when compared to the current price level and expected earnings per share (EPS) of $12.01.

Shares of Gilead were recently trading at $102.34, within a 52-week trading range of $86.00 to $123.37. The consensus price target is $124.31.

American Airlines

Among the airlines, American Airlines Group Inc. (NASDAQ: AAL) is the least expensive, with a P/E ratio of 6.80, when compared to the consensus 2016 EPS estimate of $6.36. Low oil prices have fueled the airlines over the course of 2015. Previously, Southwest Airlines was the industry leader with its low price-to-cost model, but American Airlines seems to have taken over this position going into 2016. United Continental has a forward P/E of 6.98.

American Airlines was trading at $43.23 per share, with a consensus price target of $52.31 and a 52-week range of $34.10 to $56.20.

GM

Looking ahead to 2016, General Motors Co. (NYSE: GM) is the most inexpensive stock on this list. The company has more or less been in line over the course of 2015, outperforming the broad markets with a relatively cheap valuation. GM is getting some kickback from cheaper oil prices, but it is not as significant as other companies mentioned. Thomson Reuters estimates 2016 EPS to be $5.41, yielding a 6.38 P/E multiple, when compared to the current price level.

Shares of GM were recently trading at $34.51. The stock has a consensus price target of $41.88, as well as a 52-week range of $24.62 to $38.99.

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