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My Best Advice to New Value Investors

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  • (0:45) - Understanding What Value Investing Really Means
  • (4:10) - Breaking Down Netflix’s Current Valuation
  • (8:50) - Patience Is Key: Finding The Right Stock For You
  • (19:30) -Keeping A Watchlist: Can Value Investors Buy In Growth Industries?
  • (24:00) - Tracey’s Top Tips For Value Investing
  • (36:15) - Episode Roundup: NFLX, CSIQ, GME, ABBV, LULU, COLM, FB, SNE, AAPL
  •                 Podcast@Zacks.com

 

Welcome to Episode #223 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.

Stock investing has caught on and many people are jumping in for the first time.

Many new investors are choosing to be value investors in 2021, spurred on by some traders on Reddit/Wall Street Bets forum who have done deep dives into value stocks as they look for deals.

Congrats.

Value investing is fun and a great way to invest.

The #1 Skill You Will Need

Value investors look for stocks that are being ignored by Wall Street.

It’s not easy to be a contrarian and to go against the herd.

The #1 skill value investors need is patience. Yes, patience.

Look at GameStop (GME - Free Report) . Professional value investors like Michael Burry, founder of Scion Asset Management and famous from The Big Short book and movie, had bought into GameStop all the way back in 2019.

He’s been waiting several years for the turnaround.

Similarly, Canadian Solar (CSIQ - Free Report) has soared 59% over the last 3-months but from January 2016 to January 2020, the shares were actually down 7.2%.

Meanwhile, the NASDAQ was up 97% during that time.

While the stock remained cheap throughout, how many value investors held on?

Different Ways to Find Value

New value investors should know they can find value using classic value fundamentals like the Price-to-Earnings ratio OR by finding value within an industry.

AbbVie (ABBV - Free Report) , the maker of Botox, has been ignored by Wall Street for the last 2 years. Shares have under performed the S&P 500 during that time.

It’s a classic value stock, with a forward P/E of just 8.

Additionally, Sony , while it’s hitting new 5-year highs, has mostly been ignored by all the technology company lovers on the Street.

It has few analysts covering it despite its reach into music, gaming, consumer products like cameras and televisions and semiconductors.

Sony is trading with a forward P/E of just 15.3.

Cheapest of the FAANGs?

If you want to find value within an industry, look no further than Facebook (FB - Free Report) which remains out of favor among the FAANG and social media stocks.

Shares are trading with a forward P/E of 23.9, the lowest among the FAANG stocks.

What else should new investors know as they dive into value investing?

Tune into this week’s podcast to find out.

[In full disclosure, Tracey owns shares of FB in her personal portfolio.]

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Canadian Solar Inc. (CSIQ) - free report >>

GameStop Corp. (GME) - free report >>

Facebook, Inc. (FB) - free report >>

AbbVie Inc. (ABBV) - free report >>

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