It sounds very clichéd, but low P/E stocks in the micro cap world will ultimately be recognized. Many academic and investment studies point to low-P/E stocks as a powerful indicator of future stock performance. It is important to note that the low P/E in the micro cap world is the trailing or historic P/E. Because there is a general lack of analyst coverage of micro cap stocks, the ability to get a consensus forward earnings estimate is nearly impossible. Without direct guidance from the company, it is possible to estimate future earnings only by building a company financial model to estimate those earnings. This is not something the individual investor will typically undertake. However, finding companies that are trading at a low multiple of past earnings is a simple screen that can be used on most Internet stock screening sites. Again, because there are very few analysts that cover the micro cap world, these companies often post a strong change in earnings trend and trade at a low P/E multiple for some period of time before a broader cross section of investors realizes the valuation level and begins to examine the company. There are times that companies with good growth prospects and excellent business performance trade at low P/E multiples. This can be a window of opportunity to make excellent investments at reasonable prices.