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Value Investors: Stick with the Basics in 2022

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  • (0:45) - Finding Strong Deals In The Market Sell Off: Stock Screener Criteria
  • (8:15) - Tracey’s Top Stock Picks
  • (28:20) - Big Takeaways For Your Stock Watchlist: BG, ADM, TWI, PAG, LAD, BZH, TOL, CCRN, AMN, CROX
  •                 Podcast@Zacks.com

 

Welcome to Episode #281 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 growth stocks still selling off, many investors might think that there’s value there.

But why buy beaten down growth, when you can buy cheap value stocks with strong fundamentals, including rising earnings estimates?

Don’t look at the past for the deals. Look to the future. There will be new leaders in the market going forward.

It’s time for value stocks to step into the void.

Screening for Top Value Stocks

Investors can find value through the basic fundamentals, like a low P/E and P/S ratios.

Tracey looked for stocks with forward P/Es under 20 and P/S ratios under 1.0.

And you can add the Zacks #1 Rank stocks on top of that. The #1 Ranks are strong buy stocks. They are rare. Out of over 4,000 stocks that Zacks ranks, only about 220 to 230 stocks are the top Zacks Rank of #1.

It usually means the analysts are raising their full year estimates and in this type of market, that’s a huge positive.

Running this screen, it returns 70 stocks. That’s a lot. Just goes to show you, there’s plenty of dirt-cheap stocks out there.

5 Top Ranked Value Stocks

1.       Bunge Limited (BG - Free Report)

Bunge is the food products giant, who is a leader in oilseed processing. According to the company, it connects farmers to consumers.

Investors have been diving into Bunge all year, and the shares are still up 18.4% year-to-date, but are off 2022 highs.

It’s still cheap even with the shares rallying as Bunge has a forward P/E of 9.2 and pays a dividend of 2%.

Is it too late to buy Bunge or is there further upside?

2.       Titan International (TWI - Free Report)

Titan International’s tag line says “Titan moves the world.” It makes tires for the agriculture and big equipment industries.

In Q1, Titan’s sales rose 37.8%, which was the highest sales since Q2 2013.

Titan has been a hidden gem in 2022, as shares are up 41% year-to-date. Yet, it’s still cheap with a forward P/E of 9.7.

Should investors hide out in Titan International in 2022?

3.       Penske Automotive Group (PAG - Free Report)

Penske Automotive is an auto and truck retailer and also owns 28.9% of Penske Transportation, a logistics company. The Street thought 2021 was “peak” earnings in the auto retailers but they were wrong as analysts expect Penske’s 2022 earnings to grow 3.3%.

Penske is dirt cheap with a forward P/E of just 6.8. It also pays a dividend, currently yielding 1.7%.

Shares are up 0.5% year-to-date.

Is Penske being overlooked by the market?

4.       Beazer Homes (BZH - Free Report)

Beazer Homes is one of the large publicly-traded home builders. Shares have fallen 39% year-to-date.

Beazer Homes is absurdly cheap with a forward P/E of 2.4. Even Beazer insiders know shares are on sale. On May 11, Beazer announced that the Board had authorized a new $50 million share buyback program, replacing the prior one which had $12 million remaining.

Beazer’s earnings are expected to rise 49% in 2022 but the Street expects a slowdown due to rising mortgage rates.

Is Wall Street wrong on Beazer Homes?

5.       Cross Country Healthcare (CCRN - Free Report)

Cross Country Healthcare specializes in medical staffing, including nurses and physicians.

In 2022, analysts still believe earnings will rise 49.4% to $4.57 from $3.06 last year. But the Street is worried about falling demand and declining rates for travel nurses.

Cross Country Healthcare shares have fallen 42% year-to-date. It’s now dirt-cheap with a forward P/E of 3.5.

Is Cross Country Healthcare a hidden value gem?

What Else do you Need to Know About Screening for Top Value Stocks in 2022?   

Tune into this week’s podcast to find out.

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