In the current market session, Unilever Inc. (NYSE:UL) is trading at $52.26, after a 0.1% gain. However, over the past month, the stock fell by 3.15%, and in the past year, by 3.69%. Shareholders might be interested in knowing whether the stock is undervalued, even if the company is performing up to par in the current session.

The stock is currently higher its 52 week low by 13.44%. Assuming that all other factors are held constant, this could present itself as an opportunity for investors trying to diversify their portfolio with Personal Products stocks, and capitalize on the lower share price observed over the year.

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The P/E ratio is used by long-term shareholders to assess the company's market performance against aggregate market data, historical earnings, and the industry at large. A lower P/E can either represent a company's poor future earnings potential or a buying opportunity relative to other stocks. It shows that shareholders are less than willing to pay a high share price, because they do not expect the company to exhibit growth, in terms of future earnings.

Most often, an industry will prevail in a particular phase of a business cycle, than other industries.

Compared to the aggregate P/E ratio of the 31.45 in the Personal Products industry, Unilever Inc. has a lower P/E ratio of 22.14. Shareholders might be inclined to think that the stock might perform worse than its industry peers. It's also possible that the stock is undervalued.

There are many limitations to P/E ratio. It is sometimes difficult to determine the nature of the earnings makeup of a company. Shareholders might not get what they're looking for, from trailing earnings.