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Welcome to Episode #230 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.
In 2021, value stocks have moved into favor but many growth stocks are still trading near their all-time highs even with a recent correction.
Are you considering buying into some of the big winners like Visa (V - Free Report) on this pullback?
Berkshire Hathaway has owned shares since 2011 but it hasn’t added to this position in years.
Visa trades with a P/S ratio of 21.3. When it went IPO in 2008, its P/S ratio was around 4.
Sorry value investors. It’s not “cheap” here.
Betting on Hopes and Dreams
Or maybe you’re considering glamour stock Tesla (TSLA - Free Report) .
It used to be a “hope and dream” stock when it wasn’t yet selling any electric cars. But now it is, and it now has solid earnings.
But Tesla, even with the pullback in the shares, is trading with a P/S ratio of 23.6.
It’s not cheap.
Recently ARK Invest put out a new model on Tesla and incorporated a possible large future insurance underwriting business Tesla doesn’t yet have, to justify the bull case of its new price target of $3,000 for 2025.
Insurance is, for now, a “hope and dream.”
GameStop (GME - Free Report) is also now a “hope and dream” stock as Jefferies’ analyst just put a $175 price target on it on the belief that it will be able to transform itself into an e-commerce, collectibles and digital player.
Yet, in fiscal 2021, GameStop is expected to lose $0.06 even as its brick-and-mortar business bounces back from the pandemic.
Fundamentals Matter
Value investors don’t have to look to hopes and dreams to get a company on sale.
1. Want to own a piece of the gaming industry? Forget GameStop. Buy Sony which is actually making the hottest console in the industry. It’s cheap and trades with a forward P/E of just 12.2 and a P/S ratio of 1.6.
2. Want to own collectibles? You don’t have to wait for GameStop to figure it out. Funko (FNKO - Free Report) is expecting to grow revenues by 25% to 30% in 2021. Shares are still cheap, even though Reddit traders have discovered the stock as a possible NFT play. It trades with a forward P/E of 20 and a P/S ratio of 1.0.
What else should you know about avoiding the hope and dream stocks and finding the hidden gems?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of FNKO in her personal portfolio.]
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Image: Bigstock
How to Avoid Traps and Find the Hidden Gem Stocks
Welcome to Episode #230 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.
In 2021, value stocks have moved into favor but many growth stocks are still trading near their all-time highs even with a recent correction.
Are you considering buying into some of the big winners like Visa (V - Free Report) on this pullback?
Berkshire Hathaway has owned shares since 2011 but it hasn’t added to this position in years.
Visa trades with a P/S ratio of 21.3. When it went IPO in 2008, its P/S ratio was around 4.
Sorry value investors. It’s not “cheap” here.
Betting on Hopes and Dreams
Or maybe you’re considering glamour stock Tesla (TSLA - Free Report) .
It used to be a “hope and dream” stock when it wasn’t yet selling any electric cars. But now it is, and it now has solid earnings.
But Tesla, even with the pullback in the shares, is trading with a P/S ratio of 23.6.
It’s not cheap.
Recently ARK Invest put out a new model on Tesla and incorporated a possible large future insurance underwriting business Tesla doesn’t yet have, to justify the bull case of its new price target of $3,000 for 2025.
Insurance is, for now, a “hope and dream.”
GameStop (GME - Free Report) is also now a “hope and dream” stock as Jefferies’ analyst just put a $175 price target on it on the belief that it will be able to transform itself into an e-commerce, collectibles and digital player.
Yet, in fiscal 2021, GameStop is expected to lose $0.06 even as its brick-and-mortar business bounces back from the pandemic.
Fundamentals Matter
Value investors don’t have to look to hopes and dreams to get a company on sale.
1. Want to own a piece of the gaming industry? Forget GameStop. Buy Sony which is actually making the hottest console in the industry. It’s cheap and trades with a forward P/E of just 12.2 and a P/S ratio of 1.6.
2. Want to own collectibles? You don’t have to wait for GameStop to figure it out. Funko (FNKO - Free Report) is expecting to grow revenues by 25% to 30% in 2021. Shares are still cheap, even though Reddit traders have discovered the stock as a possible NFT play. It trades with a forward P/E of 20 and a P/S ratio of 1.0.
What else should you know about avoiding the hope and dream stocks and finding the hidden gems?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of FNKO in her personal portfolio.]
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>