Bargains abound in big U.S companies - Barron's

NEW YORK, July 4 (Reuters) - Big U.S. companies are cheaply valued in the stock market, providing plenty of opportunities for bargain hunters, said Barron's in its July 5 edition.

Thirteen of the top 25 companies in the S&P 500 now trade at, or below 10 times estimated 2011 profits, said Barron's.

This includes International Business Machines Corp (IBM.N), Exxon Mobil Corp (XOM.N), Microsoft Corp (MSFT.O), Intel Corp (INTC.O), Merck & Co Inc (MRK.N) and Hewlett-Packard Company (HPQ.N).

The low price-to-earnings ratios reflect the indifference among investors to U.S. stocks and scepticism over bullish profit forecasts for next year in the face of a weakening global economy, said Barron's.

Still, if there is no profit collapse, stocks look good, according to Barron's. The forward price-to-earnings on the S&P 500 index is below 12, the lowest since the late 1980s.

Oppenheimer strategist Brian Belski told Barron's the S&P 500 could hit 1,300 this year, 27 percent above its current. level.

Investors are being defensive at the moment but they are holding high levels of cash and will jump back into the markets once they start moving higher, Belski said.

In addition, corporate balance sheets are strong and many companies are boosting dividends and repurchasing stock, Barron's said. (Reporting by Helen Kearney; Editing by Marguerita Choy)