Is a picture really worth a thousand words? Decide for yourself, by looking at charts of last week's employment data.... new claims, ongoing claims, and the unemployment rate. The media loves to compare this week's or this month's data to last week's or last month's, but the bigger trend means so much more. Let's get a feel for the real story on that front.  After that, we're going to name the market's cheapest stocks - by P/E ratios, sorted by industry - per 2010's expectations. Are these the best bargains? Not necessarily, as a low P/E for one group may be expensive by another group's standards. Nevertheless, it's a worthy exercise and a great place to start a search for an undervalued stock.  First up, however, let's work through our new community commentary.  Though the market was closed on Friday (and was effectively out of session for a half-day on Thursday), we still got some great contributions late last week.... and a couple of compelling write-ups to kick things off this week. In the spotlight most recently are China Recycling Energy (CREG), Cardiome Pharma Corporation (CRME), Electric Car Company (ELCR), Sequenom (SQNM), and United Community Banks (UCBI). Links are below.    Stocks In Focus Why They Are Such Good Deals: ABCD, SQNM, LIOX As Dennis Askew properly pointed out for Sequenom, Inc. (NASDAQ:SQNM) on Friday, speculation and lots of eyeballs and options have pushed SQNM higher and lower more so than the average stock. Considering the Lazard view of the company's potential of the Down Syndrome test though, buying Sequenom on the dips continues to be the best way to play this small cap.  Stocks Staging Big Q2 2010 Moves: UCBI, QLTY, TGA  Why is United Community Banks, Inc. (NASDAQ:UCBI) considered a 'buy' according to Dennis Askew? A lot of it has to do with short covering - potential and actual - in the wake of news that the company was getting rid of a huge chunk of bad debt. The buyer of those non-performing assets also has the right to buy United Community Banks' preferred stock within a couple of years.  Three Pharma Stocks that Offer Great Promise: AVNR, IMMR, CRME Cardiome Pharma Corporation (NASDAQ:CRME) is like the Energizer bunny.... it keeps going, and going, and going. Yet, despite the prolonged rally, Dennis Askew still sees CRME as a long-term buy here, based on a strong drug pipeline and a revenue-bearing development partnership with Merck. Cardiome Pharma shares may have hit new 52-week highs, but they're still well under 2008's peak levels... lots of room to run.  Will a Good Friday Lead to a Good Monday for ABIO, CHK, & ELCR? The question James Brumley asked of Electric Car Company, Inc. (OTC:ELCR) on Friday will at least be partially answered today.... will ELCR make good on its recent breakout effort now that the company dropped some real revenue-bearing news? Expect volatility no matter what, but in the grand scheme of things, he thinks the chart is leaning bullishly now.  CEU and UTA Past Prime; Higher Potential Returns For BSPM and CREG  New contributor Larry Isen chimed in last week about the opportunity China Recycling Energy Corporation (NASDAQ:CREG) currently offers, fueled by triple-digit earnings growth in 2008 as well as 2009. CREG has already doubled its share price this year so far. How'd that happen? With China Recycling Energy in the steepest part of its growth curve right now, so too is the stock... a condition that will eventually end when the company fully matures. Timing is everything.    Jobs (& Joblessness) In Perspective Not only did we get the normal weekly update of new unemployment claims and ongoing unemployment claims, we rounded the data out with the monthly dose of the raw unemployment data. Though the market can rally - and has - without an accompanying revival in employment, it can't do so indefinitely. The question is, are we at the point where either employment has to perk up, or stocks have to go down?  We'll address the question, but first a quick summary of the trends....  Yes, continuing claims were a tad lower last week than they were the week before. Before you get too excited though (and this is the reason we plot these charts), ongoing claims have been moving higher since mid-February - in stark contrast to the downtrend we saw start in September of last year. In fact, we can safely say that downtrend has been snapped.  As for the initial claims, they were basically flat last week, and generally remain in a volatile downtrend. Of course, with unemployment as high as it is, there are simply fewer people to lay off now. While 'less bad' is a start, it's not the finish line either.  Still, the pace of layoffs has also slowed since September of last year, and we've even seen net job growth in three of the last five months, the biggest of which came last month (a net of 162K new jobs). Many would argue that the hiring of census workers was the cause for the net jump in payrolls, though that only accounted for 48,000 of the new workers. The rest came organically.  And finally, the unemployment rate held steady at 9.7%... the third month in a row we've seen the figure. Again, it's not worse, though it's not getting any better either. The underemployment rate held steady last month as well, at 16.9%.  So what's the assessment of the whole jobs picture? To be fair, there's a light at the end of the tunnel, though that light is still well off in the distance.  Now, as for how long the market and the economy can continue to improve without any relief on the jobs front, history says possibly up to two years, though that would be an extreme. Most of the time, the 'turn' happens about a year or less after the market starts to rebound, and about six months after the economy makes a clear rebound. Needless to say, the current numbers are pushing the norms to uncomfortable extremes.    The Market's Cheapest Like bargains? Who doesn't? With that in mind, I'm continuing to see a real divergence within sectors and industries.... not all of them are overvalued like they were in 2007, and not all of them are undervalued like they were in early 2009. That's good news though - it gives us all a chance to beat the market by picking targets carefully.  Not that a low P/E is everything (growth is the other half of the value equation), but take a look at the market's ten lowest forecasted industry price/earnings ratios for 2010.  Do I have faith in all of these expectations? In a word, no - some are simply unattainable earnings levels. In the cases where the trailing P/Es are already at or near the projected numbers though, it would be hard to justify saying these companies will do worse in 2010 than they did in 2009.  Like I said a moment ago though, value is only half the equation; growth rates are the other half. To that end, I've added PEG ratios (P/E divided by earnings growth rate.... lower is better, and 1.5 is roughly the average) to the chart to give you some perspective on how or why these industries are so cheap at first glance.  Among the arenas that strongly compel me right now are health care plans, computer wholesale, diversified investments, and foreign banks. All four groups are already producing earnings at the coming year's expected levels, and you aren't paying a big premium for strong growth. I suspect, however, there's something worth digging into within all ten of these industries.  But isn't the healthcare reform bill going to crimp earnings from health care plans and providers? That seems to be the initial assumption, but with (realistically) about 16 million new insurance customers and 2400 pages worth of reform bill, I see more upside than downside in the arena.  Aside from the obvious revenue bump, healthcare's lawyers and accountants should find plenty of loopholes and revenue opportunities in the 2400 page bill... the inevitable result of excessively verbose legislation. I'll take healthcare plans' low P/E ratios at face value.  By the way, 'diversified investments' is the generic term used to describe the likes of Goldman Sachs, Morgan Stanley, the stock exchanges, capital/trust companies, etc.    We Value Your Feedback Got comments, questions or suggestions? 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