Back to top

Image: Bigstock

Screening for Ultimate Value Stocks

Read MoreHide Full Article

  • (1:30) - Is It A Good Time To Invest In The Banks?
  • (10:30) - Stock Screen and Tracey’s Top Stock Picks
  • (20:50) - Episode Roundup: MTH, CSIQ, ODP, JPM, BAC


Welcome to Episode #200 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.

200 episodes!

Thanks for tuning in over all these years to find out about value stocks.

With the stock market still hitting new highs nearly daily, ARE there any value stocks out there?

Warren Buffett Buys More Bank Shares

Warren Buffett’s Berkshire Hathaway loves the banks. It has owned some for years.

Recently, we learned that Berkshire had bought more shares of its largest bank holding, Bank of America (BAC - Free Report) .

It also owns JPMorgan Chase (JPM - Free Report) , another favorite on the Street.

Banks are really out of favor by investors, which makes them prime candidates to be value stocks. But are banks the only “cheap” stocks out there?

Screening for the Ultimate Value Stocks

If you’re going to buy value right now, why not buy companies that are cheap across all value fundamentals?

That would be a company with low P/E, P/S, PEG and P/B ratios. You could also add on low P/Cash Flow for even more firepower.

Additionally, adding the Zacks Ranks of #1 (Strong Buy) or #2 (Buy) would hopefully produce some stocks with rising earnings estimates.

For even more value characteristics, the Zacks Style Score of A, the top score, could be added to the screen.

This very narrow screen, which is designed to find the ultimate value stocks.

It returned just 8 companies.

Who are these rare companies?

3 Ultimate Value Stocks Right Now

1.       Meritage Homes (MTH - Free Report) recently reported earnings and saw a record second quarter with revenue up 20%. Even though shares are up 66% year-to-date, they’re still cheap. Meritage trades with a forward P/E of 10.8 and has a PEG of 0.6.

2.       Canadian Solar (CSIQ - Free Report) has been cheap all year. This Zacks Rank #2 (Buy) trades with a forward P/E of just 8.8. Earnings are expected to be up 25% year-over-year which has resulted in a PEG ratio of just 0.3.

3.       Office Depot (ODP - Free Report) saw sales fall 17% in the difficult second quarter. It operates 1300 stores. But it also began selling PPE to businesses which boosted business. Shares are dirt cheap, with a forward P/E of just 4.7 and a Price-to-Sales ratio of only 0.1.

What else should you know about finding the ultimate value stocks right now?

Tune into this 200th episode of the 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 >>

Published in