Highest P/Es for Commodity Companies Hide Bargains

While investors paid an average 33.1 times earnings this year for copper, plastic and seed producers last week, the premium fell to 17.7 based on 2010 analyst estimates that call for profits to almost double, data compiled by Bloomberg show. The decline in the price-earnings ratio is the steepest for any group in the S&P 500 and would leave the companies 23 percent less expensive than their historical average of 23.2 times.

“China is going to continue to suck in materials,” said Hussey, whose parent company had $250 billion in assets under management as of June 30. “Infrastructure spending and all the projects that the Chinese government are putting in has at least a couple of years of very good growth to come.”