For Immediate Release
Chicago, IL – July 31, 2020 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
The Basics of Value Investing
Welcome to Episode #199 of the Value Investor Podcast.
Market Edge From Zacks · The Basics of Value Investing
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
With so many new investors, many are confused about what value investing is.
What is it?
And how do you find good value stocks?
The Definition of Value Investing
Value investing is buying cheap stocks. But “cheap” doesn’t mean share price.
Cheapness is usually determined by the price-to-earnings ratio (P/E). That is the price divided by earnings. The lower it is, the cheaper the company.
Value stocks are also usually in an industry that Wall Street is ignoring. In 2020, think of the banks. They are all mostly cheap as Wall Street is avoiding them.
Screening for Value Stocks
Investors can use the P/E ratio to find cheap stocks, but if you only screen with that one metric, you will get over 1,000 stocks.
That’s where the Zacks Rank comes in handy. The Zacks Rank can narrow down the list of cheap stocks.
Screening for Zacks Rank #1 (Strong Buy) stocks, which is the highest of the Zacks Ranks, and a P/E ratio under 15, really narrowed down the list of stocks.
That screen gave just 77 stocks.
5 Value Stocks with Zacks Ranks of #1
1. Asbury Automotive Group ABG has a forward P/E of just 10.6. It recently reported record second quarter results as operating margin was a record 5.7%.
2. American Woodmark AMWD has seen its earnings estimates revised higher over the past 30 days. The cabinet maker is cheap, with a forward P/E of 12.8.
3. DR Horton DHI just posted a hot second quarter as consumers are out in droves buying new homes. Even as the shares have surged, they are still attractive with a forward P/E of 13.2.
4. Kroger KR is part of the cocoon at home companies. Many consumers are still reluctant to eat outside the home. The shares are still trading with a cheap valuation, with a forward P/E of 12.4.
5. Flagstar Bancorp FBC is a community bank in Michigan which also operates a national mortgage lending business. With record low mortgage rates, home buying has been hot despite the pandemic. In the second quarter, Flagstar reported its best quarter in the company’s history. Yet these shares are still dirt cheap with a forward P/E of 8.1.
What else do you need to know about how to value invest?
Find out this week’s podcast.
Today’s Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained an impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Kroger Co. (KR) : Free Stock Analysis Report
American Woodmark Corporation (AMWD) : Free Stock Analysis Report
D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
Flagstar Bancorp, Inc. (FBC) : Free Stock Analysis Report
Asbury Automotive Group, Inc. (ABG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research