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Welcome to Episode #137 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
IPOs are the big story in 2019.
Yet many seem to have an issue with valuation because a lot of them aren’t profitable. There is no “E” in the P/E.
Does that mean value investors are shut out of the IPO market?
How Value Investors Can Buy IPOs
Value investors are known for their patience. They will wait until the price is right to buy.
Instead of buying the hottest new launches, why not look back at IPOs from the last two years?
Tracey looked through lists of the top IPOs of 2017 and 2018 to see if there were any values either by P/E or other value metrics like P/S or P/B ratios.
While growth still dominated, there were some surprising stocks that made the cut.
5 Attractively Valued Recent IPOs
1. Graftech (EAF - Free Report) was the cheapest of the bunch and is a true value stock. It trades with a forward P/E of just 4.9. It’s in the steel industry as its tag line is “engineering the future” for its steelmaking customers. Year-to-date, the stock has rebounded 23%.
2. Gates Industrial Corp. (GTES - Free Report) is in fluid power and power transmission solutions. It’s trading under its 2018 IPO price but has rebounded 22.5% on the year. It has a forward P/E of just 12.6 and a P/B ratio of only 2.0. These are some bona fide value credentials.
3. Hudson Limited operates the Hudson News stores in airports and train stations as well as duty free shops. It has a P/B ratio of 2.2 and a P/S ratio of only 0.7. However, estimates have been cut in the last 60 days and the stock is now a Zacks Rank #4 (Sell).
4. Americold Realty Trust (COLD - Free Report) operates temperature-controlled warehouses worldwide. Shares have soared in 2019, up 69%. It’s not as cheap as it was to start the year, with a forward P/E of 23.6, but investors will get a dividend yielding 2.6%.
5. GreenSky is a fin-tech company with point-of-sale technology for merchants in the home improvement and healthcare industries. It grew active merchants by 37% in fiscal 2018 to 14,907. It expects revenue growth between 30% and 38% in 2019 and yet it trades with an attractive P/E of just 21.
While not all of these stocks would be considered to be “dirt cheap” they are profitable and have attractive valuations.
What else should value investors know about buying IPO stocks?
Tune into this week’s episode to find out.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
Image: Bigstock
Can Value Investors Buy IPOs?
Welcome to Episode #137 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
IPOs are the big story in 2019.
Yet many seem to have an issue with valuation because a lot of them aren’t profitable. There is no “E” in the P/E.
Does that mean value investors are shut out of the IPO market?
How Value Investors Can Buy IPOs
Value investors are known for their patience. They will wait until the price is right to buy.
Instead of buying the hottest new launches, why not look back at IPOs from the last two years?
Tracey looked through lists of the top IPOs of 2017 and 2018 to see if there were any values either by P/E or other value metrics like P/S or P/B ratios.
While growth still dominated, there were some surprising stocks that made the cut.
5 Attractively Valued Recent IPOs
1. Graftech (EAF - Free Report) was the cheapest of the bunch and is a true value stock. It trades with a forward P/E of just 4.9. It’s in the steel industry as its tag line is “engineering the future” for its steelmaking customers. Year-to-date, the stock has rebounded 23%.
2. Gates Industrial Corp. (GTES - Free Report) is in fluid power and power transmission solutions. It’s trading under its 2018 IPO price but has rebounded 22.5% on the year. It has a forward P/E of just 12.6 and a P/B ratio of only 2.0. These are some bona fide value credentials.
3. Hudson Limited operates the Hudson News stores in airports and train stations as well as duty free shops. It has a P/B ratio of 2.2 and a P/S ratio of only 0.7. However, estimates have been cut in the last 60 days and the stock is now a Zacks Rank #4 (Sell).
4. Americold Realty Trust (COLD - Free Report) operates temperature-controlled warehouses worldwide. Shares have soared in 2019, up 69%. It’s not as cheap as it was to start the year, with a forward P/E of 23.6, but investors will get a dividend yielding 2.6%.
5. GreenSky is a fin-tech company with point-of-sale technology for merchants in the home improvement and healthcare industries. It grew active merchants by 37% in fiscal 2018 to 14,907. It expects revenue growth between 30% and 38% in 2019 and yet it trades with an attractive P/E of just 21.
While not all of these stocks would be considered to be “dirt cheap” they are profitable and have attractive valuations.
What else should value investors know about buying IPO stocks?
Tune into this week’s episode to find out.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>