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Zacks Value Investor Highlights: Ameriprise Financial, American Woodmark, Bonanza Creek Energy, Ecopetrol and KEMET

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For Immediate Release

Chicago, IL – July 27, 2018 – 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/313423/how-to-screen-for-hidden-gem-stocks)

How to Screen for Hidden Gem Stocks

Welcome to Episode #102 of the Value Investor Podcast.

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.

One of the basic concepts of value investing is buying stocks that are being ignored by Wall Street.

That sounds easy enough. Sometimes, the stocks, or industries, being shunned are obvious such as the retail and energy stocks that sold off in 2016 and 2017.

But what about other companies that don’t make the news?  How do you find those hidden gems?

Putting Together a Screen to Find the Hidden Gems

To find those hidden gems, look for both the “hidden” and then focus on the “gems.”

1.       For hidden stocks, you want stocks that are being ignored. That usually means that analysts also ignore them. The average S&P 500 company has 14 covering analysts so Tracey went just under half of that and screened for stocks with 6 covering analysts or less.

2.       She also wanted a Zacks Rank of #1 (Strong Buy) or #2 (Buy) in order to get rising earnings estimates.

3.       Earnings growth would also be nice, preferably 10% or more estimated for this year.

4.       To get cheap hidden gems, she added a forward P/E of 15 and under.

The screen returned 100 stocks including many community banks, small and mid-cap companies and foreign companies who tend not to get much analyst coverage.

Tracey narrowed the list to a diverse list of five companies.

5 Cheap Hidden Gem Stocks

1.       Ameriprise Financial, Inc. (AMP - Free Report) is in financial services and retirement planning. It’s a big cap with a market cap of $20 billion. It just reported record results in the first half of 2018. The company has a forward P/E of just 9.9 and, as an added bonus, shareholders get a dividend currently yielding 2.5%.

2.       American Woodmark Corporation (AMWD - Free Report) has a market cap of just $1.5 billion. This kitchen and bath cabinet maker is expected to grow earnings by 43% in fiscal 2019. But shares have plunged 37% year-to-date making it cheap. It has a forward P/E of just 11.5.

3.       Bonanza Creek Energy is a small cap E&P which drills in the Wattenberg Field and the Mid-Continent. It is not a Permian Basin play. The analysts are super bullish though, with one raising 2018 and 2019 earnings estimates in just the last week. It’s dirt cheap with a forward P/E of just 6.3.

4.       Ecopetrol S.A. (EC - Free Report) is Colombia’s big state-run oil giant. With crude above $60, earnings are expected to soar 60.5% in 2018. Even with shares up 33% year-to-date, it has a forward P/E of just 11.7. Investors also get a nice dividend, yielding about 3%.

5.       KEMET Corporation (KEM - Free Report) has a market cap of $1.6 billion and is covered by just 2 analysts. This supplier of electronic components is up 78.5% year-to-date, but it still sports a value P/E of just 14.7. Is it too volatile for most investors?

These are just 5 stocks out of the screen. There were dozens of others that also had the great hidden gem fundamentals.

Remember, always do your homework on any company you invest in. During earnings season, listen in on conference calls and read the company presentations.

What else should you know about screening for hidden gems?

Find out on 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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