Zacks Value Trader Highlights: Best Buy, Costco, Sprouts Farmers Market, TRI Pointe Group and SPX

BBY COST TPH SFM SPXC

For Immediate Release

Chicago, IL – April 13, 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:

Value Investors: Time to Get Back to Basics

Welcome to Episode #185 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.

Stocks have rebounded off the big coronavirus sell-off, but that doesn’t mean there aren’t still bargain stocks out there.

Value investors don’t have to get fancy.

Don’t worry about buying at the bottom, or that you might have missed the bottom. Worry about buying the best quality companies when they are cheap.

How to Screen for Cheap Stocks

Value investors could use a basic P/E ratio screen to find cheap stocks, but what is the “E” going to look like over the next couple of quarters as the coronavirus shutdowns hit?

Investors might want to use the price-to-sales (P/S) ratio instead.

While there may not be much certainty over revenue, current P/S ratios are calibrated on the prior 12 months. If a stock is cheap heading into the pandemic, they may be once we come out of it.

You can run a screen with a P/S ratio under 1 and a Zacks Rank of #1 (Strong Buy) and #2 (Buy), to get stocks with rising earnings estimates, if that’s even possible right now.

This screen returned over 200 stocks so if you remove the small caps, you’ll get 78 stocks.

5 Stocks with Low P/S Ratios

1.       Best Buy (BBYcould be one of the beneficiaries of the work-from-home mania gripping the country during the coronavirus crisis. Have you ordered a new computer, microphone or other tech equipment? Best Buy has a P/S ratio of just 0.37.

2.       Costco (COSThas had strong comparables even before the virus hit. It has a P/S ratio of just 0.85.

3.       Sprouts Farmers Market (SFMshares are actually up 0.1% year-to-date. Groceries are hot. But it still trades with a value P/S ratio of just 0.4.

4.       TRI Pointe Group (TPHis a smaller home builder based in Irvine, California. It builds single family homes in 10 states. Shares have fallen 32.6% year-to-date. It has a P/S ratio of only 0.4.

5.       SPX Corp. (SPXCoperates in heating, ventilation and cooling in 17 countries. Shares have been hit hard, falling 34% in 2020. But it has a P/S ratio of just 0.9.

What else should you know about finding companies with low P/S ratios?

Tune into this week’s podcast to find out.

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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/performance for information about the performance numbers displayed in this press release.

Zacks Names "Single Best Pick to Double"

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