3 Attractive Growth Stocks with Value-Like P/E Ratios There are currently eight stocks in the S&P 500 that have a P/E ratio, the inverse of S&P's preferred earnings-to-price (or earnings yield) measure, under 10. Are they misclassified

It can be difficult to make sense of a growth stock in a value wrapper. Some are simply great bargains. Others are classic value traps.

Taking a step back, there are many metrics used to label a stock as growth or value. Standard & Poor's uses the earnings-to-price ratio, sales growth, and momentum to define growth. Book-to-price, earnings-to-price, and sales-to-price are used as value factors.

Adding a layer of complexity is the fact that some stocks exhibit characteristics of both growth and value. As such, the style labels are not mutually exclusive. In fact, approximately 70% of S&P 500 Growth constituents also call the S&P 500 Value index home.

There are currently eight stocks in the S&P 500 that have a P/E ratio, the inverse of S&P's preferred earnings-to-price (or earnings yield) measure, under 10. Are they misclassified?

That's open to debate. What's a bit clearer is that three of those names look like bargain buys for growth & value investors.

Is Ebay Stock Undervalued?

Ebay (NASDAQ: EBAY) has the lowest (non-negative) trailing P/E ratio among S&P 500 growth names at 3.7x. This translates to a 27% earnings yield which is simply the inverse of the P/E ratio—and one of the growth metrics used by S&P.

Nowadays, Ebay's valuation is light years away from the astronomical multiples it had during the dot com bubble. Granted, the company is no longer the hot e-commerce retailer it once was but at the current P/E it is bargain well worth bidding on.

Ebay is in the process of slimming down its business by selling underperforming or low growth assets in favor of higher growth opportunities. These include tapping into higher-value product groups like luxury goods and trading cards. It also means focusing more on higher-value sellers and higher frequency buyers.

Investors can't expect the type of growth from two decades ago, but what they can expect is steady profit growth from a more mature, but still relevant e-commerce player.

Analysts are forecasting 10% EPS growth in the second half of the year which would mark a significant slowdown from the 23% posted during the first half. However, things get more interesting next year when Ebay's EPS growth is expected to be around 13%. This means the stock is also cheap on a forward P/E basis at 16x compared to the 20x consensus estimate for the S&P 500.

Does Hologic Have Good Growth Prospects?

Hologic (NASDAQ: HOLX) is one of the least expensive large-cap health care stocks at 8.4x earnings. After climbing 27% and 39% in 2019 and 2020, respectively, it is down slightly this year. The relative strength indicator (RSI) has slipped to 20 which along with the valuation points to an attractively valued growth stock.

The maker of diagnostic and medical imaging systems got off to a fast start in fiscal 2021 amid feverish demand for its COVID-19 testing devices. With this revenue source slowing, some investors have moved on to other growth names putting downward pressure on the share price.

This has turned Hologic into an unlikely value play despite there being several non-COVID growth catalysts ahead. As hospital environments normalize, more women are expected to follow-through on elective procedures and cancer screenings. In turn, hospitals, private practices, and medical imaging centers will need more of Hologic's Breast Health and GYM Surgical products as medical industry conditions normalize.

What makes Hologic a particularly compelling buy at this price is that the company derives most of tis revenue from consumables. Throw away diagnostics like collection devices and assays that go with Hologic equipment serve as a steady revenue stream. Since Hologic is growing its installed base of Panther diagnostic equipment, soon customers will be ordering more consumables to test for infectious disease and women's health conditions. Investors shouldn't dispose of this buy opportunity.

Is the PulteGroup Pullback a Buy Opportunity?

At less than 9x earnings, PulteGroup (NYSE: PHM) offers the best of both worlds—solid growth prospects and an attractive valuation. The stock is trading 27% below its May 2021 peak and several analysts are calling it a buy.

Although residential construction activity is no longer through the roof in many key housing markets, a warm rather than hot housing market should suit PulteGroup just fine. In fact, its construction backlog is so strong that profits are forecast to rise 23% next year and build off a stellar 2021.

Some investors are concerned that elevated home prices and higher mortgage rates will reduce Americans' interest in building especially with lumber prices trending higher in recent weeks. While this may have some impact on demand, home construction activity should remain elevated with mortgage rates still near historic lows and the supply of existing homes for sale still limited.

PulteGroup is in a good position to succeed in this housing market because it caters to entry-level homebuyers. Last quarter, almost one-third of its closings involved first-time buyers. Offering a selection of more affordable homes for Millennials and new families should enable it to generate the volume needed to sustain healthy profit growth. Indeed, it's a good time to build a position in PulteGroup.