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Value investing is centered around jumping on stocks trading at a discount, with the idea that the market will eventually ‘catch up’ and recognize their true value, which can lead to serious gains.
After all, who doesn’t love a good deal?
And the strategy can become even more lucrative when adding in the Zacks Rank.
Three top-ranked stocks trading at enticing valuation levels – Unum Group (UNM - Free Report) , NXP Semiconductors (NXPI - Free Report) , and Graphic Packaging Holding Company (GPK - Free Report) – could all be worthy additions to any value-focused investor’s watchlist.
Below is a chart illustrating the performance of all three in 2023, with the S&P 500 added as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at all three.
Unum Group
Unum Group provides disability insurance, long-term care insurance, life insurance, and employee-paid group benefits and related services. The stock is presently a Zacks Rank #1 (Buy), with shares yielding a solid 3% annual dividend.
Shares currently trade at a 6.2X forward 12-month earnings multiple, just marginally above the five-year median and well below the Zacks Finance sector average.
Image Source: Zacks Investment Research
Further, the company’s current forward 12-month price-to-sales ratio works out to be 0.7X, again well beneath the Zacks sector average.
UNM carries a Style Score of “A” for Value.
Image Source: Zacks Investment Research
And to top it off, the company carries a respectable growth profile, with earnings forecasted to climb 15% on 3% higher revenues in its current fiscal year (FY23). And in FY24, earnings and revenue are projected to witness growth of 5.3% and 3.3%, respectively.
NXP Semiconductors
NXP Semiconductors, a Zacks Rank #2 (Buy), is a global semiconductor company providing high-performance mixed signal and standard product solutions used in various applications. Shares currently yield 2.4% annually, with the company’s payout growing by an impressive 40% over the last five years.
Image Source: Zacks Investment Research
NXPI’s current 12.3X forward 12-month earnings multiple sits well beneath the 16.1X five-year median, with the value also reflecting a 47% discount relative to the Zacks Computer and Technology sector.
The stock carries a Style Score of “B” for Value.
Image Source: Zacks Investment Research
Graphic Packaging
Graphic Packaging is a leading provider of paperboard packaging solutions for various products. Analysts have raised their earnings estimates across the board, helping land the stock into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
GPK’s 8.5X forward 12-month earnings multiple is a fraction of the 12.9X five-year median and the Zacks Industrial Products sector average.
Image Source: Zacks Investment Research
In addition, the forward 12-month price-to-sales ratio presently sits at a small 0.8X, nearly in line with the five-year median and again nowhere near the Zacks sector average.
Image Source: Zacks Investment Research
Bottom Line
Value investors are always looking for deals, expecting the rest of the crowd to eventually catch onto the discounts and lead to significant gains.
And when you pair this strategy with the Zacks Rank, which is focused on earnings estimate revisions, it’s much easier to find mispriced stocks with great near-term potential.
All three stocks above – Unum Group (UNM - Free Report) , NXP Semiconductors (NXPI - Free Report) , and Graphic Packaging Holding Company (GPK - Free Report) – could be watchlist considerations.
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3 Stocks That Could Entice Value Investors
Value investing is centered around jumping on stocks trading at a discount, with the idea that the market will eventually ‘catch up’ and recognize their true value, which can lead to serious gains.
After all, who doesn’t love a good deal?
And the strategy can become even more lucrative when adding in the Zacks Rank.
Three top-ranked stocks trading at enticing valuation levels – Unum Group (UNM - Free Report) , NXP Semiconductors (NXPI - Free Report) , and Graphic Packaging Holding Company (GPK - Free Report) – could all be worthy additions to any value-focused investor’s watchlist.
Below is a chart illustrating the performance of all three in 2023, with the S&P 500 added as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at all three.
Unum Group
Unum Group provides disability insurance, long-term care insurance, life insurance, and employee-paid group benefits and related services. The stock is presently a Zacks Rank #1 (Buy), with shares yielding a solid 3% annual dividend.
Shares currently trade at a 6.2X forward 12-month earnings multiple, just marginally above the five-year median and well below the Zacks Finance sector average.
Image Source: Zacks Investment Research
Further, the company’s current forward 12-month price-to-sales ratio works out to be 0.7X, again well beneath the Zacks sector average.
UNM carries a Style Score of “A” for Value.
Image Source: Zacks Investment Research
And to top it off, the company carries a respectable growth profile, with earnings forecasted to climb 15% on 3% higher revenues in its current fiscal year (FY23). And in FY24, earnings and revenue are projected to witness growth of 5.3% and 3.3%, respectively.
NXP Semiconductors
NXP Semiconductors, a Zacks Rank #2 (Buy), is a global semiconductor company providing high-performance mixed signal and standard product solutions used in various applications. Shares currently yield 2.4% annually, with the company’s payout growing by an impressive 40% over the last five years.
Image Source: Zacks Investment Research
NXPI’s current 12.3X forward 12-month earnings multiple sits well beneath the 16.1X five-year median, with the value also reflecting a 47% discount relative to the Zacks Computer and Technology sector.
The stock carries a Style Score of “B” for Value.
Image Source: Zacks Investment Research
Graphic Packaging
Graphic Packaging is a leading provider of paperboard packaging solutions for various products. Analysts have raised their earnings estimates across the board, helping land the stock into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
GPK’s 8.5X forward 12-month earnings multiple is a fraction of the 12.9X five-year median and the Zacks Industrial Products sector average.
Image Source: Zacks Investment Research
In addition, the forward 12-month price-to-sales ratio presently sits at a small 0.8X, nearly in line with the five-year median and again nowhere near the Zacks sector average.
Image Source: Zacks Investment Research
Bottom Line
Value investors are always looking for deals, expecting the rest of the crowd to eventually catch onto the discounts and lead to significant gains.
And when you pair this strategy with the Zacks Rank, which is focused on earnings estimate revisions, it’s much easier to find mispriced stocks with great near-term potential.
All three stocks above – Unum Group (UNM - Free Report) , NXP Semiconductors (NXPI - Free Report) , and Graphic Packaging Holding Company (GPK - Free Report) – could be watchlist considerations.