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Zacks.com featured highlights TotalEnergies, Target, Signet Jewelers, and Micron Technology
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For Immediate Release
Chicago, IL – April 11, 2022 – Stocks in this week’s article are TotalEnergies SE (TTE - Free Report) , Target Corp. (TGT - Free Report) , Signet Jewelers Ltd. (SIG - Free Report) and Micron Technology, Inc. (MU - Free Report) .
Design a Balanced Portfolio with These 4 Low P/CF Stocks
Addressing rising commodity prices is of top priority for the Federal Reserve and policymakers have hinted at tightening the monetary policy methodically. The Federal Reserve has signaled a steady increase in the benchmark interest rate and shrinking its $9-trillion balance sheet by approximately $95 billion a month. The officials have agreed to trim $60 billion a month from the U.S. central bank's Treasury holdings and $35 billion from holdings of mortgage-backed securities.
Evidently, the Federal Reserve's hawkish stance calls for a prudent investment strategy. So, as investors rebalance their portfolios, market pundits are placing their bets on value stocks. Investment in stocks made on diligent value analysis is usually considered one of the best practices. In value investing, investors pick stocks that are cheap but fundamentally sound. There are a number of ratios to identify value stocks but none alone can conclusively determine their inherent potential.
Each ratio helps an investor understand a particular aspect of the company's business. One such ratio, Price to Cash Flow (or P/CF), can work wonders in stock picking if used prudently. This metric evaluates the market price of a stock relative to the amount of cash flow that the company is generating on a per-share basis – the lower the number, the better. TotalEnergies SE, Target Corp., Signet Jewelers Ltd., and Micron Technology, Inc. boast a low P/CF ratio.
Why P/CF Ratio?
You must be wondering why we are considering this when the most widely used valuation metric is Price/Earnings (or P/E). Well, one of the important factors that make P/CF a highly dependable metric is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, truly diagnosing a company's financial health.
Analysts caution that a company's earnings are subject to accounting estimates and management manipulation. Then again, cash flow is quite reliable. Net cash flow unveils how much money a company generates and how effectively management is deploying the same.
A positive cash flow indicates an increase in the company's liquid assets. This gives the company the means to settle debt, meet its expenses, reinvest in business, endure downturns and finally undertake shareholder-friendly moves. Negative cash flow implies a decline in the company's liquidity, which, in turn, lowers its flexibility to support these endeavors.
However, an investment decision solely based on the P/CF metric may not fetch the desired results. To identify stocks that are trading at a discount, you should expand your search criteria and take into account the price-to-book ratio, price-to-earnings ratio and price-to-sales ratio. Adding a favorable Zacks Rank and a Value Score of A or B to your search criteria should lead to even better results as these eliminate the chance of falling into a value trap.
Here are four of the 17 stocks that qualified the screening:
TotalEnergies, which operates as an integrated oil and gas company globally, sports a Zacks Rank #1 and has an expected earnings per share (EPS) growth rate of 6.6% for three-five years. TotalEnergies company has a trailing four-quarter positive earnings surprise of 18.9%, on average. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TotalEnergies' current financial year EPS suggests growth of 45.8% from the year-ago period. TotalEnergies has a Value Score of A. Shares of TTE have gained 10.2% in the past year.
Target, a general merchandise retailer in the United States, carries a Zacks Rank #2 and has an expected EPS growth rate of 16.5% for three-five years. Target has a trailing four-quarter positive earnings surprise of 21.3%, on average.
The Zacks Consensus Estimate for Target's current financial year sales and EPS suggests growth of 3.5% and 6.7%, respectively, from the year-ago period. Target has a Value Score of B. Shares of TGT have gained 11.2% in the past year.
Signet, the world's largest retailer of diamond jewelry, carries a Zacks Rank #2. It has an expected EPS growth rate of 8% for three-five years. Signet has a trailing four-quarter earnings surprise of 73.8%, on average.
The Zacks Consensus Estimate for Signet's current financial year sales suggests growth of 5.2% from the year-ago period. SIG has a Value Score of A. The stock has risen 11.5% in the past year.
Micron, which designs, manufactures, and sells memory and storage products globally, carries a Zacks Rank #2. It has an expected EPS growth rate of 32% for three-five years. Micron has a trailing four-quarter earnings surprise of 6.6%, on average.
The Zacks Consensus Estimate for Micron's current financial year sales and EPS suggests growth of 21.1% and 57.4%, respectively, from the year-ago period. MU has a Value Score of A. The stock has declined 23.1% in the past year.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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/performancefor information about the performance numbers displayed in this press release.
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Zacks.com featured highlights TotalEnergies, Target, Signet Jewelers, and Micron Technology
For Immediate Release
Chicago, IL – April 11, 2022 – Stocks in this week’s article are TotalEnergies SE (TTE - Free Report) , Target Corp. (TGT - Free Report) , Signet Jewelers Ltd. (SIG - Free Report) and Micron Technology, Inc. (MU - Free Report) .
Design a Balanced Portfolio with These 4 Low P/CF Stocks
Addressing rising commodity prices is of top priority for the Federal Reserve and policymakers have hinted at tightening the monetary policy methodically. The Federal Reserve has signaled a steady increase in the benchmark interest rate and shrinking its $9-trillion balance sheet by approximately $95 billion a month. The officials have agreed to trim $60 billion a month from the U.S. central bank's Treasury holdings and $35 billion from holdings of mortgage-backed securities.
Evidently, the Federal Reserve's hawkish stance calls for a prudent investment strategy. So, as investors rebalance their portfolios, market pundits are placing their bets on value stocks. Investment in stocks made on diligent value analysis is usually considered one of the best practices. In value investing, investors pick stocks that are cheap but fundamentally sound. There are a number of ratios to identify value stocks but none alone can conclusively determine their inherent potential.
Each ratio helps an investor understand a particular aspect of the company's business. One such ratio, Price to Cash Flow (or P/CF), can work wonders in stock picking if used prudently. This metric evaluates the market price of a stock relative to the amount of cash flow that the company is generating on a per-share basis – the lower the number, the better. TotalEnergies SE, Target Corp., Signet Jewelers Ltd., and Micron Technology, Inc. boast a low P/CF ratio.
Why P/CF Ratio?
You must be wondering why we are considering this when the most widely used valuation metric is Price/Earnings (or P/E). Well, one of the important factors that make P/CF a highly dependable metric is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, truly diagnosing a company's financial health.
Analysts caution that a company's earnings are subject to accounting estimates and management manipulation. Then again, cash flow is quite reliable. Net cash flow unveils how much money a company generates and how effectively management is deploying the same.
A positive cash flow indicates an increase in the company's liquid assets. This gives the company the means to settle debt, meet its expenses, reinvest in business, endure downturns and finally undertake shareholder-friendly moves. Negative cash flow implies a decline in the company's liquidity, which, in turn, lowers its flexibility to support these endeavors.
However, an investment decision solely based on the P/CF metric may not fetch the desired results. To identify stocks that are trading at a discount, you should expand your search criteria and take into account the price-to-book ratio, price-to-earnings ratio and price-to-sales ratio. Adding a favorable Zacks Rank and a Value Score of A or B to your search criteria should lead to even better results as these eliminate the chance of falling into a value trap.
Here are four of the 17 stocks that qualified the screening:
TotalEnergies, which operates as an integrated oil and gas company globally, sports a Zacks Rank #1 and has an expected earnings per share (EPS) growth rate of 6.6% for three-five years. TotalEnergies company has a trailing four-quarter positive earnings surprise of 18.9%, on average. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TotalEnergies' current financial year EPS suggests growth of 45.8% from the year-ago period. TotalEnergies has a Value Score of A. Shares of TTE have gained 10.2% in the past year.
Target, a general merchandise retailer in the United States, carries a Zacks Rank #2 and has an expected EPS growth rate of 16.5% for three-five years. Target has a trailing four-quarter positive earnings surprise of 21.3%, on average.
The Zacks Consensus Estimate for Target's current financial year sales and EPS suggests growth of 3.5% and 6.7%, respectively, from the year-ago period. Target has a Value Score of B. Shares of TGT have gained 11.2% in the past year.
Signet, the world's largest retailer of diamond jewelry, carries a Zacks Rank #2. It has an expected EPS growth rate of 8% for three-five years. Signet has a trailing four-quarter earnings surprise of 73.8%, on average.
The Zacks Consensus Estimate for Signet's current financial year sales suggests growth of 5.2% from the year-ago period. SIG has a Value Score of A. The stock has risen 11.5% in the past year.
Micron, which designs, manufactures, and sells memory and storage products globally, carries a Zacks Rank #2. It has an expected EPS growth rate of 32% for three-five years. Micron has a trailing four-quarter earnings surprise of 6.6%, on average.
The Zacks Consensus Estimate for Micron's current financial year sales and EPS suggests growth of 21.1% and 57.4%, respectively, from the year-ago period. MU has a Value Score of A. The stock has declined 23.1% in the past year.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1895421/design-a-balanced-portfolio-with-these-4-low-pcf-stocks?art_rec=quote-stock_overview-zacks_news-ID02-txt-1895421
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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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.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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/performancefor information about the performance numbers displayed in this press release.