Asbury Automotive, American Woodmark, DR Horton, Kroger and Flagstar Bancorp

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:

(https://www.zacks.com/stock/news/1026258/the-basics-of-value-investing)

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.

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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.

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