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Zacks Value Trader Highlights: Avid Technology, Cardinal Health, EMCOR and Fastenal

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For Immediate Release

Chicago, IL – April 17, 2020 – Zacks Value Trader 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:

How to Find Value Stocks During the Coronavirus Crisis

Welcome to Episode #186 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.

It should be easy to be a value investor in 2020, right?

But it’s not.

With companies withdrawing guidance, and revenue and earnings expected to fall sharply at many companies in 2020, how does a value investor figure out if a company is genuinely cheap?

With earnings on the decline, it feels like the entire S&P 500 might just be one big value trap.

Screening for Cheap Zacks Strong Buy Stocks

Zacks Rank #1 (Strong Buy) stocks are ranked that high because they are supposed to have rising earnings estimates.

Right now, many companies have just the opposite, or earnings that are expected to decline dramatically.

Why not screen for Zacks Strong Buy stocks that are also cheap to see if there are some genuine values there?

Running a basic screen with a forward P/E under 15 and the Zacks Rank of #1 (Strong Buy), returns 17 stocks.

Here are 3 of them.

3 Cheap Zacks Strong Buy Stocks

1.       Avid Technology, Inc. is a small cap software company in the media, television and film industries. It recently reported record growth in paid subscriptions for its cloud-enabled software in the first quarter. But with film and television shows shut down, it’s getting hurt on sales in those categories. It’s trading with a forward P/E of 7.1 but will those earnings estimates hold up?

2.       Cardinal Health, Inc. (CAH - Free Report) is supplying PPE to hospitals, labs, pharmacies and other healthcare facilities. Not surprisingly, the shares are only down 2% year-to-date. But it’s still cheap, with a forward P/E of 9.4.

3.       EMCOR Group, Inc. (EME - Free Report) is in mechanical and electrical construction, industrial energy infrastructure and facilities services. It is paying its regular dividend this month, in April, which is yielding 0.5%. Shares are down 30.9% year-to-date and are trading at just 10.4x.

Investors might want to watch companies that are involved in the PPE industry, other than Cardinal Health.

Fastenal (FAST - Free Report) already reported earnings. It’s a Zacks Rank #4 (Sell) currently, but the safety business, which includes PPE, was up 31% in the month of March. It’s not cheap, however, as it’s trading with a forward P/E of 27.

Additionally, some investors might want to wait on the sidelines with individual stocks while the earnings picture clears up.

You don’t have to get fancy about it. Investors can just buy a broad market index, like the Vanguard S&P 500 ETF (VOO).  

What else do you need to know about finding value stocks while earnings remain volatile?

Listen to this week’s podcast to find out.

[In full disclosure, Tracey owns shares of VOO in her personal portfolio.]

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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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Fastenal Company (FAST) - free report >>

Cardinal Health, Inc. (CAH) - free report >>

EMCOR Group, Inc. (EME) - free report >>

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