Any thoughts on buy and hold lowest PE ratio Mag 7 stock? (backtested)
u/Madison_369 ·
Reddit — r/ValueInvesting
· July 02, 2026 at 05:03
· ⬆ 17 pts
· 💬 24 comments
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Summary
The author backtests a simple value strategy: each year buy the Magnificent 7 stock with the lowest trailing P/E, hold for one year, rebalance annually.
The backtest from 2013–2025 shows the strategy returned ~27.8% annually, nearly double the S&P 500's ~14.7%, with Apple, Meta, and Google as the recurring picks.
The post is an interesting historical observation, but lacks forward-looking data or a current recommendation; it is more of a hypothesis than a fully rigorous deep dive.
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**Rule tested:** each year buy the Mag7 stock with the lowest **positive** year-end trailing P/E from the prior year, hold for 1 year, rebalance annually.
Selections were mostly **Apple 2013–2020**, then **Meta 2021–2024**, then **Google 2025**. Apple’s PE was very low in the 2010s, often around 10–16, and Meta became cheapest after its 2022 crash.
From 2013-2025 this strategy would have yielded average \~27.8% yearly returns in that same period SPY averages at \~14.7%, nearly double SPY returns.