We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Dow Jones Industrial Average (DJI) hit a 52-week high yesterday, closing at $18,506.41 while the Standard & Poor’s 500, which was rising of late, closed the last trading session at $2,163.75, a little lower than its last 52-week high of $2,168.99.
Since the beginning of 2016, markets were plagued by a number of macroeconomic factors that caused widespread volatility. Fortunes, however, turned around recently, with an improvement in job numbers, rebounding oil prices, negligible impact of Brexit on the U.S. market and low volatility in the markets, as indicated by the CBOE Volatility Index (VIX). In fact, so far this year, the DJI and the S&P 500 have improved a respective 6.2% and 5.9%.
Investment Strategy: Go for Value
Finding the right stocks to invest in is always a challenge. It is more so with an uncertain second-quarter earnings season around the corner. At this juncture, knowing the right investment strategy is no mean feat. We believe it is time to let go of your fascination for popular stocks and instead focus on the ones that are trading below their fair value. Investing in cheap stocks is probably the best option right now, seeing that they are both safe and profitable.
This is known as value investing, and since the emphasis is on cheap stocks with steady growth and solid price momentum, the strategy offers compelling prospects.
Why Value Investing
Investors usually have a negative impression about cheap stocks. However, they are not always a bad idea. Sometimes, stocks trade lower than their fair value because of temporary negative factors. In fact, stocks that have a low price/earnings or P/Es ratio, an impressive outlook, a decent dividend payment history and high returns are a worthy choice for value investors. These stocks are usually a darling for risk-averse investors who can’t afford to buy high-priced stocks during phases of high volatility.
Picking Such Stocks
It’s never easy to find stocks that offer great value but are trading cheap at the moment. Here, we have used our latest style score system to zero in on six stocks with healthy prospects that would be sensible picks for value investors.
Our Value Style Score highlights all valuation metrics and represents them as one score that warns investors against ‘value traps’ and helps them to find stocks that are actually trading cheap.
A Zacks Rank indicating “Strong Buy” or even “Buy” (Zacks Rank #1 or #2) translates into an upward trend in the stock’s earnings estimates.
Thus, stocks with a Value Style Score of ‘A,’ when combined with a Zacks Rank #1 or #2, offer the best opportunities in the value investing space.
Each of these six stocks has both a favorable Zacks Rank and Value Score. We have also considered the P/E – an important metric used for recognizing value stocks. All of these stocks have P/E less than 10.
Headquartered in Toronto, Canada, Manulife Financial is one of the three leading life insurers operating in the Canadian market. The company also has a rapidly growing footprint across the U.S. and several Asian countries. Manulife’s deep penetration in the Asian market and a growing asset management business are expected to drive long-term earnings growth. It also holds a significant market in Canada and the Standard Life Overseas Holdings takeover broadened its share in the region.
Manulife has a Zacks Rank #2 and a Value Style Score of ‘A.’ The stock has a P/E ratio of 9.48. The company’s expected 3–5 year EPS growth rate is 10%.
Mylan N.V.
Mylan N.V. is a global pharmaceutical company with a well-established generics business as well as a presence in specialty pharmaceuticals. The company’s business model includes the development, manufacturing and marketing of branded and generic drugs as well as active pharmaceutical ingredients (APIs) in North America, Europe and Rest of World. Notably, Mylan has one of the world’s largest API operations.
This Zacks Rank #2 stock currently has a Value Style Score of ‘A.’ Its P/E ratio is 9.2. The expected 3–5 year EPS growth rate of the company is 10.4%.
Huntsman Corporation is one of the world's largest global manufacturers of differentiated and commodity chemical products for a variety of industrial and consumer applications.
Presently, Huntsman Corporation sports a Zacks Rank #1 and has a Value Style Score of ‘A’. The stock has a P/E ratio of 8.62. The company’s expected 3–5 year EPS growth rate is 7.75%.
Air Lease Corporation is an aircraft leasing company, principally engaged in purchasing commercial aircraft and leasing them to airlines around the world. The company provides leasing services in Asia, the Pacific Rim, Latin America, Middle East and eastern Europe.
Currently, Air Lease Corporation sports a Zacks Rank #1 and has a Value Style Score of ‘A.’ The stock has a P/E ratio of 8.49. The expected 3–5 year EPS growth rate of the company is 8.91%.
Bofi Holding, Inc.
Bofi Holding is the holding company for Bank of Internet USA – a consumer-focused, nationwide savings bank operating primarily through the Internet from a single location in San Diego, CA. The company offers an array of consumer banking services, focusing primarily on gathering retail deposits over the Internet, and originating and purchasing multi-family and single-family loans for investment.
Bofi Holding currently has a Zacks Rank #2 and has a Value Style Score of ‘A.’ The stock has a P/E ratio of 7.96. Its expected 3–5 year EPS growth rate is 10%.
ORIX Corporation is a diversified financial services institution with operations across the fields of both corporate and retail finance, including leasing, lending, rentals, life insurance, real estate financing and development, venture capital, investment and retail banking, commodities funds, and securities brokerage. The company’s international operations cover leasing, rentals, fixed income investment, aircraft and ship financing, commercial mortgage servicing and property development.
ORIX Corporation currently has a Zacks Rank #2 and has a Value Style Score of ‘A’. The stock has a P/E ratio of 7.54. Its expected 3–5 year EPS growth rate is 9.18%.
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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
6 Stocks Still Trading Cheap in Today's Market
The Dow Jones Industrial Average (DJI) hit a 52-week high yesterday, closing at $18,506.41 while the Standard & Poor’s 500, which was rising of late, closed the last trading session at $2,163.75, a little lower than its last 52-week high of $2,168.99.
Since the beginning of 2016, markets were plagued by a number of macroeconomic factors that caused widespread volatility. Fortunes, however, turned around recently, with an improvement in job numbers, rebounding oil prices, negligible impact of Brexit on the U.S. market and low volatility in the markets, as indicated by the CBOE Volatility Index (VIX). In fact, so far this year, the DJI and the S&P 500 have improved a respective 6.2% and 5.9%.
Investment Strategy: Go for Value
Finding the right stocks to invest in is always a challenge. It is more so with an uncertain second-quarter earnings season around the corner. At this juncture, knowing the right investment strategy is no mean feat. We believe it is time to let go of your fascination for popular stocks and instead focus on the ones that are trading below their fair value. Investing in cheap stocks is probably the best option right now, seeing that they are both safe and profitable.
This is known as value investing, and since the emphasis is on cheap stocks with steady growth and solid price momentum, the strategy offers compelling prospects.
Why Value Investing
Investors usually have a negative impression about cheap stocks. However, they are not always a bad idea. Sometimes, stocks trade lower than their fair value because of temporary negative factors. In fact, stocks that have a low price/earnings or P/Es ratio, an impressive outlook, a decent dividend payment history and high returns are a worthy choice for value investors. These stocks are usually a darling for risk-averse investors who can’t afford to buy high-priced stocks during phases of high volatility.
Picking Such Stocks
It’s never easy to find stocks that offer great value but are trading cheap at the moment. Here, we have used our latest style score system to zero in on six stocks with healthy prospects that would be sensible picks for value investors.
Our Value Style Score highlights all valuation metrics and represents them as one score that warns investors against ‘value traps’ and helps them to find stocks that are actually trading cheap.
A Zacks Rank indicating “Strong Buy” or even “Buy” (Zacks Rank #1 or #2) translates into an upward trend in the stock’s earnings estimates.
Thus, stocks with a Value Style Score of ‘A,’ when combined with a Zacks Rank #1 or #2, offer the best opportunities in the value investing space.
Each of these six stocks has both a favorable Zacks Rank and Value Score. We have also considered the P/E – an important metric used for recognizing value stocks. All of these stocks have P/E less than 10.
Our Picks
Manulife Financial Corporation (MFC - Free Report)
Headquartered in Toronto, Canada, Manulife Financial is one of the three leading life insurers operating in the Canadian market. The company also has a rapidly growing footprint across the U.S. and several Asian countries. Manulife’s deep penetration in the Asian market and a growing asset management business are expected to drive long-term earnings growth. It also holds a significant market in Canada and the Standard Life Overseas Holdings takeover broadened its share in the region.
Manulife has a Zacks Rank #2 and a Value Style Score of ‘A.’ The stock has a P/E ratio of 9.48. The company’s expected 3–5 year EPS growth rate is 10%.
Mylan N.V.
Mylan N.V. is a global pharmaceutical company with a well-established generics business as well as a presence in specialty pharmaceuticals. The company’s business model includes the development, manufacturing and marketing of branded and generic drugs as well as active pharmaceutical ingredients (APIs) in North America, Europe and Rest of World. Notably, Mylan has one of the world’s largest API operations.
This Zacks Rank #2 stock currently has a Value Style Score of ‘A.’ Its P/E ratio is 9.2. The expected 3–5 year EPS growth rate of the company is 10.4%.
Huntsman Corporation (HUN - Free Report)
Huntsman Corporation is one of the world's largest global manufacturers of differentiated and commodity chemical products for a variety of industrial and consumer applications.
Presently, Huntsman Corporation sports a Zacks Rank #1 and has a Value Style Score of ‘A’. The stock has a P/E ratio of 8.62. The company’s expected 3–5 year EPS growth rate is 7.75%.
Air Lease Corporation (AL - Free Report)
Air Lease Corporation is an aircraft leasing company, principally engaged in purchasing commercial aircraft and leasing them to airlines around the world. The company provides leasing services in Asia, the Pacific Rim, Latin America, Middle East and eastern Europe.
Currently, Air Lease Corporation sports a Zacks Rank #1 and has a Value Style Score of ‘A.’ The stock has a P/E ratio of 8.49. The expected 3–5 year EPS growth rate of the company is 8.91%.
Bofi Holding, Inc.
Bofi Holding is the holding company for Bank of Internet USA – a consumer-focused, nationwide savings bank operating primarily through the Internet from a single location in San Diego, CA. The company offers an array of consumer banking services, focusing primarily on gathering retail deposits over the Internet, and originating and purchasing multi-family and single-family loans for investment.
Bofi Holding currently has a Zacks Rank #2 and has a Value Style Score of ‘A.’ The stock has a P/E ratio of 7.96. Its expected 3–5 year EPS growth rate is 10%.
ORIX Corporation (IX - Free Report)
ORIX Corporation is a diversified financial services institution with operations across the fields of both corporate and retail finance, including leasing, lending, rentals, life insurance, real estate financing and development, venture capital, investment and retail banking, commodities funds, and securities brokerage. The company’s international operations cover leasing, rentals, fixed income investment, aircraft and ship financing, commercial mortgage servicing and property development.
ORIX Corporation currently has a Zacks Rank #2 and has a Value Style Score of ‘A’. The stock has a P/E ratio of 7.54. Its expected 3–5 year EPS growth rate is 9.18%.
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 >>