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Welcome to Episode #302 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.
While there are plenty of value stocks out there, are they all good quality cheap stocks?
Or will the slowing economy throw a wrench into companies’ outlook and guidance in 2023?
Olaplex Cuts Guidance
Olaplex, the popular haircare company that went IPO in 2021, was humming along all year until Oct 18, 2022, when it suddenly issued a press release cutting its full year sales guidance in half. It now sees sales up 18%, which was down from its prior guidance of 36% growth.
Shares tumbled over 50% on the news.
But are shares now “cheap”? Earnings estimates will be cut and it still has a P/E of 18. And what if business slows further later this year?
In an uncertain macro environment, value investing can be like catching a falling knife.
Should You Take a Chance on These 5 Retailers?
Still, there are plenty of top retailers out there who have been executing this year. And some of them are already cheap.
Tapestry operates three leading lifestyle brands in Coach, Kate Spade and Stuart Weitzman. It sells online and in retail and department stores worldwide.
Tapestry shares are down in 2022, but “only” 24% year-to-date and just 3.8% over the last 3 months. But they are dirt cheap, with a forward P/E of 8.
Tapestry is a favorite with the dividend income investors because it pays a dividend currently yielding 3.8%.
With luxury holding up well in 2022, is Tapestry a true value?
Lululemon is one of the top athletic and leisure apparel, shoes and accessory retailers in the world. But in an economic slowdown, it will likely get hit too.
Currently, earnings are expected to rise 26% this year and 16% next year. But as we saw with Olaplex, the outlook can change quickly.
Shares of Lululemon are down 24% year-to-date. Are they cheap after the sell-off?
Should investors be considering buying Lululemon now?
Home Depot was a big pandemic winner as everyone stayed home, bought outdoor furniture and grills, fixed up their kitchens, painted their home office and planted a new garden.
But with the economy reopening and the housing market slowing, will Home Depot struggle?
Shares are down 33% year-to-date, but just 6.5% over the last 3 months.
It’s not dirt cheap, yet, with a forward P/E of 17.
Should Home Depot be on your value stock watch list?
What Else Should You Know About the Retailers in 2022?
Tune into this week’s podcast to find out.
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Do You Dare Buy Retail Stocks Right Now?
Welcome to Episode #302 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.
While there are plenty of value stocks out there, are they all good quality cheap stocks?
Or will the slowing economy throw a wrench into companies’ outlook and guidance in 2023?
Olaplex Cuts Guidance
Olaplex, the popular haircare company that went IPO in 2021, was humming along all year until Oct 18, 2022, when it suddenly issued a press release cutting its full year sales guidance in half. It now sees sales up 18%, which was down from its prior guidance of 36% growth.
Shares tumbled over 50% on the news.
But are shares now “cheap”? Earnings estimates will be cut and it still has a P/E of 18. And what if business slows further later this year?
In an uncertain macro environment, value investing can be like catching a falling knife.
Should You Take a Chance on These 5 Retailers?
Still, there are plenty of top retailers out there who have been executing this year. And some of them are already cheap.
1. Deckers Outdoor Corp. (DECK - Free Report)
Deckers is a specialty retailer that owns UGG and Hoka One One brands, among others. It’s been a popular growth stock for several years.
Shares of Deckers pulled back to start 2022, but over the last 3 months it has rallied 28%.
It’s about to report earnings again.
Is it too late to buy Deckers or will it get cheaper in 2023?
2. Boot Barn Holdings, Inc. (BOOT - Free Report)
Boot Barn operates 322 stores in 40 states that sell western and work-related footwear, apparel and accessories for men, women and children.
Shares of Boot Barn has sunk in 2022, falling 56% year-to-date. They’re now at 52-week lows.
Boot Barn is cheap, with a forward P/E of just 9.5.
But is it really cheap or is it a trap as the economy slows?
3. Tapestry (TPR - Free Report)
Tapestry operates three leading lifestyle brands in Coach, Kate Spade and Stuart Weitzman. It sells online and in retail and department stores worldwide.
Tapestry shares are down in 2022, but “only” 24% year-to-date and just 3.8% over the last 3 months. But they are dirt cheap, with a forward P/E of 8.
Tapestry is a favorite with the dividend income investors because it pays a dividend currently yielding 3.8%.
With luxury holding up well in 2022, is Tapestry a true value?
4. Lululemon (LULU - Free Report)
Lululemon is one of the top athletic and leisure apparel, shoes and accessory retailers in the world. But in an economic slowdown, it will likely get hit too.
Currently, earnings are expected to rise 26% this year and 16% next year. But as we saw with Olaplex, the outlook can change quickly.
Shares of Lululemon are down 24% year-to-date. Are they cheap after the sell-off?
Should investors be considering buying Lululemon now?
5. Home Depot (HD - Free Report)
Home Depot was a big pandemic winner as everyone stayed home, bought outdoor furniture and grills, fixed up their kitchens, painted their home office and planted a new garden.
But with the economy reopening and the housing market slowing, will Home Depot struggle?
Shares are down 33% year-to-date, but just 6.5% over the last 3 months.
It’s not dirt cheap, yet, with a forward P/E of 17.
Should Home Depot be on your value stock watch list?
What Else Should You Know About the Retailers in 2022?
Tune into this week’s podcast to find out.