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Find Top-Ranked Value Stocks to Buy Amid the Massive Market Rally
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Wall Street bulls fought back after a red start on Monday to close slightly green. The upbeat start to the week came despite Moody’s U.S. credit rating downgrade and warnings from JPMorgan chief executive Jamie Dimon about tariff complacency.
Tariff negotiations, trade deals, lower inflation, and strong earnings fueled the recent stock market rally. As long as these sturdy foundations remain in place, the market should remain strong in 2025.
Still, stocks could use a period of calm and sideways trading following the Nasdaq’s 26% rally off its April lows. Investors might also start taking some profits off the top of the pile after the furious run.
This backdrop should lead some investors to search for strong stocks that are far from overheated.
Today, we walk investors through how to screen for stocks that offer the winning combination of great value and improving earnings outlooks, ideal for buying in May and beyond.
Value Stock Screen Basics
The screen we are digging into today comes loaded with the Research Wizard and aims to sort through highly-ranked Zacks stocks to find some of the top value names.
This value-focused screen searches only for stocks that boast Zacks Rank #1 (Strong Buys) or #2 (Buys). It also focuses on stocks with price-to-earnings (P/E) ratios under the median for its industry.
The screen also looks for stocks with price-to-sales (P/S) ratios under the median for its industry to help lock in relative value compared to its peers, since basing it off the wider market is not always the most useful tool.
The screen then digs into quarterly earnings rates above the median for its industry. This particular Zacks screen also uses a special blend of upgrades and estimates revisions to select the best seven stocks in this list.
The screen basics are listed below…
· Only Zacks Rank #1 (Strong Buy) or #2 (Buy) Stocks
· P/E (using 12-month EPS) - Under the Median for its Industry
· P/S - Under the Median for its Industry
· Percentage Change Act. EPS Q(0)/Q(-1)
· Rating Change and Revisions Factors (to help narrow the list to the 7 best stocks in this list)
This strategy comes loaded with the Research Wizard and it is called bt_sow_value_method1. It can be found in the SoW (Screen of the Week) folder.
The screen is pretty simple, yet powerful. Here is one of the seven stocks that made it through this week's screen…
Buy This Soaring Stock At All-Time Highs for Great Value
Heritage Insurance Holdings, Inc. ((HRTG - Free Report) ) is a super-regional property and casualty insurance holding company that underwrites about $1.4 billion in gross premiums for personal and commercial residential insurance across multiple states, including the Northeast, Southeast, Hawaii, and California’s excess and surplus lines. HRTG stock has skyrocketed 670% in the past three years to blow away its industry’s 62%, reaching an all-time high in the process.
Image Source: Zacks Investment Research
HRTG’s surge helped it rebound just above its 2015 peaks, with it now up 100% since its 2014 IPO. Its Insurance-Property and Casualty segment is in the top 20% of over 250 Zacks industries. Despite its impressive run to fresh records, Heritage trades 14% below its average Zacks price target.
The stock trades at a 75% discount to its highly-ranked industry and directly in line with HRTG’s 10-year median at 7.4X forward 12-month earnings.
Image Source: Zacks Investment Research
Heritage posted a huge beat-and-raise first quarter in early May, having topped our EPS estimates by an average of 363% in the past four months. HRTG’s earnings outlook has soared since its release, with it projected to grow its adjusted earnings by 61% in 2025 and another 13% next year, on 5% and 7% higher respective sales.
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Image: Bigstock
Find Top-Ranked Value Stocks to Buy Amid the Massive Market Rally
Wall Street bulls fought back after a red start on Monday to close slightly green. The upbeat start to the week came despite Moody’s U.S. credit rating downgrade and warnings from JPMorgan chief executive Jamie Dimon about tariff complacency.
Tariff negotiations, trade deals, lower inflation, and strong earnings fueled the recent stock market rally. As long as these sturdy foundations remain in place, the market should remain strong in 2025.
Still, stocks could use a period of calm and sideways trading following the Nasdaq’s 26% rally off its April lows. Investors might also start taking some profits off the top of the pile after the furious run.
This backdrop should lead some investors to search for strong stocks that are far from overheated.
Today, we walk investors through how to screen for stocks that offer the winning combination of great value and improving earnings outlooks, ideal for buying in May and beyond.
Value Stock Screen Basics
The screen we are digging into today comes loaded with the Research Wizard and aims to sort through highly-ranked Zacks stocks to find some of the top value names.
This value-focused screen searches only for stocks that boast Zacks Rank #1 (Strong Buys) or #2 (Buys). It also focuses on stocks with price-to-earnings (P/E) ratios under the median for its industry.
The screen also looks for stocks with price-to-sales (P/S) ratios under the median for its industry to help lock in relative value compared to its peers, since basing it off the wider market is not always the most useful tool.
The screen then digs into quarterly earnings rates above the median for its industry. This particular Zacks screen also uses a special blend of upgrades and estimates revisions to select the best seven stocks in this list.
The screen basics are listed below…
· Only Zacks Rank #1 (Strong Buy) or #2 (Buy) Stocks
· P/E (using 12-month EPS) - Under the Median for its Industry
· P/S - Under the Median for its Industry
· Percentage Change Act. EPS Q(0)/Q(-1)
· Rating Change and Revisions Factors (to help narrow the list to the 7 best stocks in this list)
This strategy comes loaded with the Research Wizard and it is called bt_sow_value_method1. It can be found in the SoW (Screen of the Week) folder.
The screen is pretty simple, yet powerful. Here is one of the seven stocks that made it through this week's screen…
Buy This Soaring Stock At All-Time Highs for Great Value
Heritage Insurance Holdings, Inc. ((HRTG - Free Report) ) is a super-regional property and casualty insurance holding company that underwrites about $1.4 billion in gross premiums for personal and commercial residential insurance across multiple states, including the Northeast, Southeast, Hawaii, and California’s excess and surplus lines. HRTG stock has skyrocketed 670% in the past three years to blow away its industry’s 62%, reaching an all-time high in the process.
Image Source: Zacks Investment Research
HRTG’s surge helped it rebound just above its 2015 peaks, with it now up 100% since its 2014 IPO. Its Insurance-Property and Casualty segment is in the top 20% of over 250 Zacks industries. Despite its impressive run to fresh records, Heritage trades 14% below its average Zacks price target.
The stock trades at a 75% discount to its highly-ranked industry and directly in line with HRTG’s 10-year median at 7.4X forward 12-month earnings.
Image Source: Zacks Investment Research
Heritage posted a huge beat-and-raise first quarter in early May, having topped our EPS estimates by an average of 363% in the past four months. HRTG’s earnings outlook has soared since its release, with it projected to grow its adjusted earnings by 61% in 2025 and another 13% next year, on 5% and 7% higher respective sales.
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Click here to sign up for a free trial to the Research Wizard today.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: www.zacks.com/performance_disclosure