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5 Top Classic Value Stocks

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  • (0:30) - Finding Classic Value Stocks
  • (5:20) - Tracey’s Top Stock Picks
  • (17:50) - Episode Roundup: ANTM, CI, GTN, HIBB, MTH
  •     Podcast@Zacks.com

 

Welcome to Episode #208 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 the S&P 500 briefly testing a 10% correction, before finishing September down 3.9%, now’s the time to screen for classic value stocks.

Screening for Classic Value

Classic value is the toughest to screen for.

It involves all of the classic value fundamentals including low price-to-earnings, price-to-book, price-to-sales and price to cash flow ratios along with a PEG ratio under 1.0, which indicates both growth and value.

That would limit the screen considerably.

But if you add on the top Zacks Ranks of #1 (Strong Buy) and #2 (Buy), which should mean earnings estimates are on the rise, that will narrow it further.

And to top it off, why not throw on Zacks Value Style Scores of A or B, which are the top style scores.

This screen produced just 9 stocks.

They’re all cheap with top Ranks and Style Scores.

5 Top Classic Value Stocks

1.       Anthem (ANTM - Free Report) is a healthcare insurer with a market cap of $67 billion. Shares are down 11.5% this year due to uncertainty over the future of the ACA, aka Obamacare. It has a forward P/E of 11.6 and a P/S ratio of just 0.6.

2.       Cigna (CI - Free Report) is also a healthcare insurer with a market cap of $63 billion. It’s shares are down 17.5% year-to-date. It’s dirt cheap, with a forward P/E of 8.9 and a PEG of 0.8. Is it a buying opportunity ahead of the election?

3.       Gray Television (GTN - Free Report) owns television stations across the United States. Earnings are on the rise thanks to the election, where there will be huge political advertising. It’s dirt cheap with a forward P/E of 5.2. It also has a PEG ratio of just 0.5.

4.       Hibbett Sports (HIBB - Free Report) is trading near its 52-week highs. This specialty retailer is still cheap, however, with a forward P/E of 8.8 and a P/S ratio of just 0.5. With shares up 44.7% year-to-date, does it still have more left in the tank?

5.       Meritage Homes (MTH - Free Report) is breaking out to new 5-year highs as the housing industry remains hot. Meritage shares are up 80% year-to-date but are still cheap thanks to rising earnings estimates. It trades with a forward P/E of 11.1 and a P/B ratio of 0.3.

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

Tune in to this week’s podcast to find out.

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