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5 Hidden Value Strong Buy Stocks

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  • (1:00) - Cheap Stocks With Growing Earnings
  • (6:30) - Tracey’s Top Stock Picks
  • (19:45) - What Can You Learn From This Stock Screener?
  • (23:40) - Episode Roundup: WDR, THO, RLGY, ETH, BG
  •     Podcast@Zacks.com

 

Welcome to Episode #212 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.

Many investors think that with growth stocks soaring, there’s simply no value stocks. They think that everything is overvalued or “expensive.”

But value stocks are still alive and well.

And they’re being ignored by the Street.

Screening for Cheap Strong Buy Stocks

The top Zacks Rank is the #1 (Strong Buy). Currently, there are just 241 Zacks Rank #1 (Strong Buy) stocks.

The Zacks Rank can change daily. It’s based on analyst earnings estimate revisions. During earnings season, it sees a lot of shifts.

But if you screen with the Zacks Rank, it can uncover companies that are seeing an increase in their consensus estimate which can indicate something positive is going on at that company.

For value, you can add any of the common value fundamentals. In this case, those would be the P/E ratio under 15 and the P/S ratio under 1.0.

Running that screen, it returned 56 stocks.

5 Hidden Value Strong Buy Stocks

1.       Waddell & Reed is an investment management and financial services. In the third quarter, it saw an 11.5% increase in revenue. It pays a dividend, which yields 6.2%. Earnings are expected to rise in 2020, but just 1.3%. WDR is attractively valued with a P/E of just 10.

2.       Thor Industries (THO - Free Report) makes RVs and owns the Airstream brand.  In September, it reported a record backlog of $5.74 billion to end its Fiscal 2020 year. Earnings are expected to be up 38.6% in Fiscal 2021. It’s trading with a forward P/E of just 13.2 and pays a dividend, yielding 1.9%.

3.       Realogy (RLGY - Free Report) operates residential real estate services through its brands like Coldwell Banker, Corcoran Group and Sotheby’s. Third quarter revenue jumped 20% as closed transaction volume rose 28%. Earnings are expected to rise 13.7% in 2020 and 38% in 2021. It trades with a forward P/E of just 10.5.

4.       Ethan Allen (ETH - Free Report) is also benefitting from the hot housing market as this furniture retailer saw retail written orders rise 10.8% in the first quarter of Fiscal 2021. Earnings are expected to jump 144% in Fiscal 2021 to $1.27. It’s still cheap, with a forward P/E of 13.2.

5.       Bunge (BG - Free Report) sources, processes and supplies oilseed and grain products globally. It posted a huge beat in the third quarter and raised its full year outlook. Earnings are expected to be up 18.8% in 2020.

What else should you know about finding cheap strong buy stocks?

Tune into this week’s podcast to find out.

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