Here is the latest update for July from Validea’s market valuation tool. Rather than focusing on market-cap weighted indexes like the S&P 500, our tool focuses on the valuation of the average stock relative to history. We use the median of our investable universe of 2700 stocks to perform the calculation.

Despite the big run in the S&P 500, the average stock actually got cheaper on the month due to a combination of the narrowness of the rallly and continued earnings growth. The median PE fell from 20 to 19.8 for the month.

Using current year earnings estimates, the valuation looks a little cheaper and also fell slightly from the previous month.

The median Price/Sales remained steady and the average stock looks much less attractive from a valuation standpoint using this metric due to historically high margins.