The Low PE Stocks can be quite Dangerous if you are buying for Low PE ratio only.What looks like a low PE may be Quite high.

What are Things to Consider while Buying Low PE stocks

1 First and most Important Never Buy Stocks Below RS 10 .

Why?

Because Rs 10 is The Greatest Barrier for all Stocks.Many Stocks  are not able to cross this Wall in their Lifetime .Let the Stock Cross Rs 10 Before buying .

2. Check The Financial Reports .

A low PE may be very High PE .

See the List Given at http://nse2rich.com/list-of-100-b-group-midcap-stocks-in-bse-having-lowest-pe-ratio-as-on-24-nov-2009/

on Top of List is
Scrip Code : 500248 Company : MAVI INDUSTRIES LTD.
Mavi Ind with PE of 0.09
PE of 0.09 !!! its a Hidden Gem !!!

now If you Check the results at BSE you will See that this Company is Making Operational Losses every Quarter .

PE is 0.09 Due to Extraordinary Item consists of interest provisions written back on account of one time settlement of loan from
majority of banks / financial institutions in March Quarter .

Scrip Code : 505726
Company : IFB INDUSTRIES LTD. is Given with PE of 0.47

Now if You Check  results at Here

You will Find one thing In Quarter Ended December 2008 and March 2009 The Company received Rs 2500 Million Due to gain on waiver of interest on full & final settlement of debts as per negotiated settlement .

now this was one Time Gain.If we exclude those two Quarters And Annualize the earnings of  next Quarters ,yearly EPS is  Rs 12.50 .

Ar Current Price of  62 The PE is nearly 5.Which is quite low But Much Higher than the  PE of 0.47 as Given in List.