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Welcome to Episode #194 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.
With most companies now having reported first quarter earnings, investors now have a good look at where companies stood when the coronavirus pandemic hit the United States.
And it wasn’t all bad news.
Analysts actually had to raise their earnings estimates on some companies which performed better-than-expected despite COVID-19.
Screening for Cheap Stocks with Rising Earnings Estimates
With so many companies withdrawing guidance, and analysts having to slash earnings estimates, why not look for companies that are seeing rising earnings estimates instead?
Those would be Zacks Rank #1 (Strong Buy) stocks, the highest of the Zacks Ranks.
There are only about 220 of those so that’s a narrow universe.
Then, add on value fundamentals like price-to-earnings ratio under 20 and a price-to-sales ratio under 1.0, which usually indicates a company is undervalued.
Running this screen, it produced 25 companies.
5 Dirt Cheap Stocks to Buy Now
1. Atlas Air Worldwide Holdings operates cargo airlines and charter flights. At the end of the first quarter, it saw a surge in demand for cargo which continued into the second quarter. It even had to reactivate 3 of its 747 converted freighters. It’s expected to grow earnings by 61.3% this year. It’s dirt cheap, with a forward P/E of just 4.9.
2. Oasis Midstream Partners is a crude and natural gas midstream master limited partnership which pays a dividend. Be warned, the dividend is set quarterly so it can change. Year-to-date, these shares are down 42%, but are off the March lows. It’s super cheap, with a forward P/E of just 2.99.
3. Tutor Perini (TPC - Free Report) is a construction company that specializes in civil, building and specialty construction. The company made just $0.70 last year. Analysts expect them to earn $2.10 in 2020. That’s earnings growth of 200%. It has a forward P/E of only 6.
4. Donnelley Financial Solutions (DFIN - Free Report) is a global risk and compliance company that saw record software solutions sales in the first quarter. Software has jumped up to 21.4% of total sales compared to 19.5% a year ago. Earnings are expected to rise 39.2% year-over-year. It’s dirt cheap, as well, with a forward P/E of just 5.5.
5. B&G Foods (BGS - Free Report) makes frozen and prepared foods such as Green Giant. It saw a big boost in business in the first half of the year as consumers stocked their freezers. But is the surge in demand already over? Shares have soared 36% this year so the shares are more expensive, with a forward P/E of 12.2. That’s still well under the average of the S&P 500 and indicates value.
What else do you need to know about dirt cheap stocks?
Listen to this week’s podcast to find out.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
5 Dirt Cheap Stocks to Buy Now
Welcome to Episode #194 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.
With most companies now having reported first quarter earnings, investors now have a good look at where companies stood when the coronavirus pandemic hit the United States.
And it wasn’t all bad news.
Analysts actually had to raise their earnings estimates on some companies which performed better-than-expected despite COVID-19.
Screening for Cheap Stocks with Rising Earnings Estimates
With so many companies withdrawing guidance, and analysts having to slash earnings estimates, why not look for companies that are seeing rising earnings estimates instead?
Those would be Zacks Rank #1 (Strong Buy) stocks, the highest of the Zacks Ranks.
There are only about 220 of those so that’s a narrow universe.
Then, add on value fundamentals like price-to-earnings ratio under 20 and a price-to-sales ratio under 1.0, which usually indicates a company is undervalued.
Running this screen, it produced 25 companies.
5 Dirt Cheap Stocks to Buy Now
1. Atlas Air Worldwide Holdings operates cargo airlines and charter flights. At the end of the first quarter, it saw a surge in demand for cargo which continued into the second quarter. It even had to reactivate 3 of its 747 converted freighters. It’s expected to grow earnings by 61.3% this year. It’s dirt cheap, with a forward P/E of just 4.9.
2. Oasis Midstream Partners is a crude and natural gas midstream master limited partnership which pays a dividend. Be warned, the dividend is set quarterly so it can change. Year-to-date, these shares are down 42%, but are off the March lows. It’s super cheap, with a forward P/E of just 2.99.
3. Tutor Perini (TPC - Free Report) is a construction company that specializes in civil, building and specialty construction. The company made just $0.70 last year. Analysts expect them to earn $2.10 in 2020. That’s earnings growth of 200%. It has a forward P/E of only 6.
4. Donnelley Financial Solutions (DFIN - Free Report) is a global risk and compliance company that saw record software solutions sales in the first quarter. Software has jumped up to 21.4% of total sales compared to 19.5% a year ago. Earnings are expected to rise 39.2% year-over-year. It’s dirt cheap, as well, with a forward P/E of just 5.5.
5. B&G Foods (BGS - Free Report) makes frozen and prepared foods such as Green Giant. It saw a big boost in business in the first half of the year as consumers stocked their freezers. But is the surge in demand already over? Shares have soared 36% this year so the shares are more expensive, with a forward P/E of 12.2. That’s still well under the average of the S&P 500 and indicates value.
What else do you need to know about dirt cheap stocks?
Listen to this week’s podcast to find out.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>