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Zacks Value Trader Highlights: Whiting Petroleum, M/I Homes, Group 1 Automotive, Flagstar Bancorp and Macy's
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For Immediate Release
Chicago, IL – September 3, 2021 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
Welcome to Episode #249 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.
Even with the major stock indexes continuing to hit all-time highs, there’s a lot of cheap stocks out there.
How could that be after the big rally in the last year?
While the “P” in the P/E ratio is on the rise, so is the “E.”
Earnings are expected to be at a record high this year and next year. That’s keeping valuations in check.
Screening for Top Stocks That are Dirt Cheap
It’s easy to find cheap stocks but to find quality cheap stocks, use the Zacks Rank.
Screening for Zacks Rank #1 (Strong Buy) and #2 (Buy) stocks should provide a list of companies with rising earnings estimates.
To find classic cheap stocks, you can screen with the basic value fundamental of price-to-earnings (P/E) ratio of under 10.
A single digit P/E has always historically been cheap.
But **warning**:
There is sometimes a reason for a dirt-cheap valuation. Make sure you do your homework for all companies.
If it sounds too good to be true, it usually is.
This screen returned 228 stocks.
5 Top Stocks with P/Es Under 10
1. Whiting Petroleum is trading with a forward P/E of just 4.1 as shares are up just 4% over the last 3 months even as earnings have risen. The energy stocks have rallied big off their 2020 lows, and so have the earnings estimates. This Rocky Mountain explorer and producer is expected to make $11.38 per share this year.
2. M/I Homes (MHO - Free Report) , a homebuilder with a $2 billion market cap, has a forward P/E of only 4.6 even though earnings are expected to rise 63% this year and another 8% next year. The Street thinks that new housing demand, and therefore sales, have peaked but home demand just keeps on growing.
3. Group 1 Automotive, Inc. (GPI - Free Report) trades with a forward P/E of just 5.4. This auto retailer with dealerships in the United Kingdom, the United States and Brazil, is expected to grow earnings by 71% in 2021 but analysts believe this could be peak earnings as they have forecasted a decline of 20% in 2022.
4. Flagstar Bancorp, Inc. is both a regional Michigan-based bank and a national mortgage lender. It trades with a forward P/E of just 5.9. However, analysts believe 2020 was peak earnings as the Zacks Consensus expects earnings to decline 11.9% this year and another 30% in 2022. Is it a value trap?
5. Macy’s (M - Free Report) remains dirt cheap even though the shares are up about 100% in 2021. It trades with a forward P/E of just 6 as earnings are expected to jump 268% this year. But what will happen next year, after the recovery takes hold?
What else should you know about screening for dirt cheap stocks in 2021?
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Value Trader Highlights: Whiting Petroleum, M/I Homes, Group 1 Automotive, Flagstar Bancorp and Macy's
For Immediate Release
Chicago, IL – September 3, 2021 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
Welcome to Episode #249 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.
Even with the major stock indexes continuing to hit all-time highs, there’s a lot of cheap stocks out there.
How could that be after the big rally in the last year?
While the “P” in the P/E ratio is on the rise, so is the “E.”
Earnings are expected to be at a record high this year and next year. That’s keeping valuations in check.
Screening for Top Stocks That are Dirt Cheap
It’s easy to find cheap stocks but to find quality cheap stocks, use the Zacks Rank.
Screening for Zacks Rank #1 (Strong Buy) and #2 (Buy) stocks should provide a list of companies with rising earnings estimates.
To find classic cheap stocks, you can screen with the basic value fundamental of price-to-earnings (P/E) ratio of under 10.
A single digit P/E has always historically been cheap.
But **warning**:
There is sometimes a reason for a dirt-cheap valuation. Make sure you do your homework for all companies.
If it sounds too good to be true, it usually is.
This screen returned 228 stocks.
5 Top Stocks with P/Es Under 10
1. Whiting Petroleum is trading with a forward P/E of just 4.1 as shares are up just 4% over the last 3 months even as earnings have risen. The energy stocks have rallied big off their 2020 lows, and so have the earnings estimates. This Rocky Mountain explorer and producer is expected to make $11.38 per share this year.
2. M/I Homes (MHO - Free Report) , a homebuilder with a $2 billion market cap, has a forward P/E of only 4.6 even though earnings are expected to rise 63% this year and another 8% next year. The Street thinks that new housing demand, and therefore sales, have peaked but home demand just keeps on growing.
3. Group 1 Automotive, Inc. (GPI - Free Report) trades with a forward P/E of just 5.4. This auto retailer with dealerships in the United Kingdom, the United States and Brazil, is expected to grow earnings by 71% in 2021 but analysts believe this could be peak earnings as they have forecasted a decline of 20% in 2022.
4. Flagstar Bancorp, Inc. is both a regional Michigan-based bank and a national mortgage lender. It trades with a forward P/E of just 5.9. However, analysts believe 2020 was peak earnings as the Zacks Consensus expects earnings to decline 11.9% this year and another 30% in 2022. Is it a value trap?
5. Macy’s (M - Free Report) remains dirt cheap even though the shares are up about 100% in 2021. It trades with a forward P/E of just 6 as earnings are expected to jump 268% this year. But what will happen next year, after the recovery takes hold?
What else should you know about screening for dirt cheap stocks in 2021?
Listen to the podcast to find out.
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Zacks Investment Research
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support@zacks.com
https://www.zacks.com/performance
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.