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Welcome to Episode #311 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.
Welcome to the first valueiInvestor podcast of 2023.
Every year, in the first week of the new year, it’s now a tradition for Tracey to run a stock screen looking for classic value stocks. Value stocks are still “in” and there are plenty of cheap stocks out there.
In 2021, this stock screen returned just 9 stocks. In 2022, it returned 12 stocks.
After last year’s sell-off, will there be even more stocks on the list this year?
How to Screen for Classic Value Stocks
Zacks.com has a great screen that focuses on classic value stocks which includes all the top value fundamentals and adds on the highest Zacks Ranks of Strong Buy and Buy along with the highest Zacks Style scores for Value of A and B.
This screen is narrow as it seeks out the cheapest of stocks across a range of parameters. It includes a P/E under 20, a P/S ratio under 1.0, a P/B ratio under 2.0, a P/Cash Flow under 20 and a PEG ratio under 1.0.
Even meeting one or two of these factors with the top Zacks Rank is difficult. But with this many value fundamentals, it’s bound to be a short list.
But it turns out there are 13 stocks to start this year, one more than 2022. Tracey picked out 5.
P.S. She also took a look at last year’s list of 5 stocks to see how they did over the course of the last year. Tune into the podcast to find out.
Deutsche Bank is a large cap German bank. Shares bottomed in Oct 2022 and are down “just” 8.1% over the last year.
Deutsche Bank is dirt cheap with a forward P/E of 6.6. Earnings are expected to be $1.77 in 2022 and $1.77 in 2023 but at least they aren’t on the decline.
Should a big international bank like Deutsche Bank be on your short list in 2023?
LendingTree operates in financial services, including mortgages, auto loans, and insurance. Mortgage demand fell off a cliff in late 2022 as mortgage rates rose.
LendingTree made $1.57 in 2021 and is only expected to make $0.38 in 2022. But in 2023, analysts see earnings rebounding 210% to $1.17. But with the economy slowing, will it?
Shares of LendingTree have plunged 83% over the last year. It has a PEG ratio of just 0.4 and a P/S ratio of 0.3. Both indicate the stock is cheap.
Should LendingTree be on your short list or is it too soon to dive in?
PVH is a global apparel retailer which owns Calvin Klein and Tommy Hilfiger brands. While earnings are expected to fall 18.6% in fiscal 2023, analysts believe they will rise 6.6% next year.
Shares of PVH have fallen 32.5% over the last year but have staged a strong rally the last 3 months, adding 54% in that time.
PVH is cheap with a forward P/E of 8.6 and a P/S ratio of 0.5.
With China reopening in 2023, should investors take a chance on a global apparel company like PVH?
Urban Outfitters is a retailer which has a bunch of brands including Urban Outfitters, Anthropologie, BHLDN, Free People, Terrain, FP Movement, Nuuly and its restaurant division of Menus & Venues.
In the third quarter, Urban Outfitters saw sales gains in Anthro and Free People but Urban sales slid 9%.
Earnings are expected to be down 44% in fiscal 2023 but up 27.9% next year.
Urban Outfitters shares have fallen 17% in the last year. It is trading with a PEG ratio of just 0.7.
Are the apparel retailers like Urban Outfitters too risky in 2023 with the economy expected to slow?
What Else Should You Know About Classic Value Stocks in 2023?
Tune into this week’s podcast to find out.
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5 Top Classic Value Stocks to Start 2023
Welcome to Episode #311 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.
Welcome to the first valueiInvestor podcast of 2023.
Every year, in the first week of the new year, it’s now a tradition for Tracey to run a stock screen looking for classic value stocks. Value stocks are still “in” and there are plenty of cheap stocks out there.
In 2021, this stock screen returned just 9 stocks. In 2022, it returned 12 stocks.
After last year’s sell-off, will there be even more stocks on the list this year?
How to Screen for Classic Value Stocks
Zacks.com has a great screen that focuses on classic value stocks which includes all the top value fundamentals and adds on the highest Zacks Ranks of Strong Buy and Buy along with the highest Zacks Style scores for Value of A and B.
This screen is narrow as it seeks out the cheapest of stocks across a range of parameters. It includes a P/E under 20, a P/S ratio under 1.0, a P/B ratio under 2.0, a P/Cash Flow under 20 and a PEG ratio under 1.0.
Even meeting one or two of these factors with the top Zacks Rank is difficult. But with this many value fundamentals, it’s bound to be a short list.
But it turns out there are 13 stocks to start this year, one more than 2022. Tracey picked out 5.
P.S. She also took a look at last year’s list of 5 stocks to see how they did over the course of the last year. Tune into the podcast to find out.
5 Classic Value Stocks to Start 2023
1. Deutsche Bank (DB - Free Report)
Deutsche Bank is a large cap German bank. Shares bottomed in Oct 2022 and are down “just” 8.1% over the last year.
Deutsche Bank is dirt cheap with a forward P/E of 6.6. Earnings are expected to be $1.77 in 2022 and $1.77 in 2023 but at least they aren’t on the decline.
Should a big international bank like Deutsche Bank be on your short list in 2023?
2. LendingTree, Inc. (TREE - Free Report)
LendingTree operates in financial services, including mortgages, auto loans, and insurance. Mortgage demand fell off a cliff in late 2022 as mortgage rates rose.
LendingTree made $1.57 in 2021 and is only expected to make $0.38 in 2022. But in 2023, analysts see earnings rebounding 210% to $1.17. But with the economy slowing, will it?
Shares of LendingTree have plunged 83% over the last year. It has a PEG ratio of just 0.4 and a P/S ratio of 0.3. Both indicate the stock is cheap.
Should LendingTree be on your short list or is it too soon to dive in?
3. Phillips 66 (PSX - Free Report)
Phillips 66 is an energy company that operates in refining, midstream, marketing and chemicals.
Earnings soared in 2022 but are expected to fall 27% in 2023. Still, Phillips 66 shares are dirt cheap with a forward P/E of just 7.1.
It was one of the few stocks that rose last year. It has added 28% in the last year. Phillips 66 also pays a dividend, currently yielding 3.7%.
Energy was the best performing sector for the second year in a row in 2022. Can the energy sector, and Phillips 66, do it again in 2023?
4. PVH (PVH - Free Report)
PVH is a global apparel retailer which owns Calvin Klein and Tommy Hilfiger brands. While earnings are expected to fall 18.6% in fiscal 2023, analysts believe they will rise 6.6% next year.
Shares of PVH have fallen 32.5% over the last year but have staged a strong rally the last 3 months, adding 54% in that time.
PVH is cheap with a forward P/E of 8.6 and a P/S ratio of 0.5.
With China reopening in 2023, should investors take a chance on a global apparel company like PVH?
5. Urban Outfitters, Inc. (URBN - Free Report)
Urban Outfitters is a retailer which has a bunch of brands including Urban Outfitters, Anthropologie, BHLDN, Free People, Terrain, FP Movement, Nuuly and its restaurant division of Menus & Venues.
In the third quarter, Urban Outfitters saw sales gains in Anthro and Free People but Urban sales slid 9%.
Earnings are expected to be down 44% in fiscal 2023 but up 27.9% next year.
Urban Outfitters shares have fallen 17% in the last year. It is trading with a PEG ratio of just 0.7.
Are the apparel retailers like Urban Outfitters too risky in 2023 with the economy expected to slow?
What Else Should You Know About Classic Value Stocks in 2023?
Tune into this week’s podcast to find out.