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Welcome to Episode #316 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.
This week, she is again looking at Jim Cullen’s new book on value investing called “The Case for Long-Term Value Investing.” You can buy it on Amazon here.
In the book he discusses the big investing mistake many investors make, which can really impact your long-term investing success.
“The Silent Killer”
We are all guilty of making this big investing mistake: market timing. Whether we are chasing the latest hot investing strategy or going into all cash during a bear market, both are forms of market timing.
They do not end well.
Instead, investors would be better off focusing on their strategy and staying the course. For value investors, that could mean taking a look at big cap stocks that trade at low P/Es. Those stocks tend to outperform, especially during bear markets.
Screening for Cheap Big Caps
Tracey ran a screen looking for stocks with market caps over $10 billion which have both sales and earnings growth along with top Zacks Ranks of #1 (Strong Buy) and #2 (Buy). They also have to be cheap, with P/Es under 15.
Even at this time of companies cutting their forward guidance, this screen still returned 14 stocks.
5 Cheap Large Cap Stocks with Sales and Earnings Growth
Delta Airlines is a large U.S. airline. It’s currently a Zacks Rank #2 (Buy).
Shares of Delta Airlines have been rallying in 2023, adding 20% as demand remains elevated for travel this year. Delta has said recently that bookings are remaining strong into early summer.
It’s still cheap even after the rally, with a forward P/E of 7.7.
Should the airlines, like Delta Airlines, be on your short list?
AGCO designs and manufactures farming equipment under 6 core brands: Challenger, Fendt, GSI, Massey Ferguson, Precision Planting and Valtra. AGCO recently reported record fourth quarter and full year 2022 sales and earnings.
AGCO reaffirmed its 2023 outlook expecting industry demand to remain strong.
Shares of AGCO are up 16.3% over the last year but are down 3% year-to-date. It’s cheap, with a forward P/E of 10. It’s a Zacks Rank #2 (Buy).
Halliburton is a global oil field services company. Earnings are expected to rise 43% in 2023 to $3.08 from $2.15 last year.
Shares of Halliburton are actually down 0.3% year-to-date even as earnings estimates are on the rise. It’s still cheap, with a forward P/E of just 12.7.
Halliburton also pays a dividend, yielding 1.2%.
Is now the time to buy an energy company like Halliburton?
Jabil is one of the largest global suppliers of electronic manufacturing services. It has 250,000 employees in 100 locations in 30 countries. On Dec 15, 2022, it reported preliminary first quarter fiscal 2023 results and said that “performance was outstanding.”
Jabil raised its full year 2023 outlook by $0.25 to $8.40. That’s earnings growth of 9.4% as it made $7.65 last year.
Shares of Jabil are up 20.9% year-to-date but remain cheap with a forward P/E of 10. It’s a Zacks Rank #1 (Strong Buy).
PACCAR designs and manufactures trucks. On Jan 24, 2023, it reported record revenue and net income for 2022. It continues to see strong demand for DAF, Peterbilt and Kenworth new truck models worldwide.
In 2022, PACCAR paid total cash dividends, including a regular and extra cash dividends, of $4.19. That’s a total shareholder return of 17.1%.
Shares of PACCAR are up 9.7% year-to-date yet it’s still cheap with a forward P/E of 11.4.
Should PACCAR be on the short list?
What Else Should You Know About Avoiding This Big Investing Mistake?
Listen to this week’s podcast to find out.
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Are You Making This Big Investing Mistake?
Welcome to Episode #316 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.
This week, she is again looking at Jim Cullen’s new book on value investing called “The Case for Long-Term Value Investing.” You can buy it on Amazon here.
In the book he discusses the big investing mistake many investors make, which can really impact your long-term investing success.
“The Silent Killer”
We are all guilty of making this big investing mistake: market timing. Whether we are chasing the latest hot investing strategy or going into all cash during a bear market, both are forms of market timing.
They do not end well.
Instead, investors would be better off focusing on their strategy and staying the course. For value investors, that could mean taking a look at big cap stocks that trade at low P/Es. Those stocks tend to outperform, especially during bear markets.
Screening for Cheap Big Caps
Tracey ran a screen looking for stocks with market caps over $10 billion which have both sales and earnings growth along with top Zacks Ranks of #1 (Strong Buy) and #2 (Buy). They also have to be cheap, with P/Es under 15.
Even at this time of companies cutting their forward guidance, this screen still returned 14 stocks.
5 Cheap Large Cap Stocks with Sales and Earnings Growth
1. Delta Airlines (DAL - Free Report)
Delta Airlines is a large U.S. airline. It’s currently a Zacks Rank #2 (Buy).
Shares of Delta Airlines have been rallying in 2023, adding 20% as demand remains elevated for travel this year. Delta has said recently that bookings are remaining strong into early summer.
It’s still cheap even after the rally, with a forward P/E of 7.7.
Should the airlines, like Delta Airlines, be on your short list?
2. AGCO (AGCO - Free Report)
AGCO designs and manufactures farming equipment under 6 core brands: Challenger, Fendt, GSI, Massey Ferguson, Precision Planting and Valtra. AGCO recently reported record fourth quarter and full year 2022 sales and earnings.
AGCO reaffirmed its 2023 outlook expecting industry demand to remain strong.
Shares of AGCO are up 16.3% over the last year but are down 3% year-to-date. It’s cheap, with a forward P/E of 10. It’s a Zacks Rank #2 (Buy).
Should AGCO be on your watch list?
3. Halliburton (HAL - Free Report)
Halliburton is a global oil field services company. Earnings are expected to rise 43% in 2023 to $3.08 from $2.15 last year.
Shares of Halliburton are actually down 0.3% year-to-date even as earnings estimates are on the rise. It’s still cheap, with a forward P/E of just 12.7.
Halliburton also pays a dividend, yielding 1.2%.
Is now the time to buy an energy company like Halliburton?
4. Jabil (JBL - Free Report)
Jabil is one of the largest global suppliers of electronic manufacturing services. It has 250,000 employees in 100 locations in 30 countries. On Dec 15, 2022, it reported preliminary first quarter fiscal 2023 results and said that “performance was outstanding.”
Jabil raised its full year 2023 outlook by $0.25 to $8.40. That’s earnings growth of 9.4% as it made $7.65 last year.
Shares of Jabil are up 20.9% year-to-date but remain cheap with a forward P/E of 10. It’s a Zacks Rank #1 (Strong Buy).
Is Jabil a hidden gem?
5. PACCAR (PCAR - Free Report)
PACCAR designs and manufactures trucks. On Jan 24, 2023, it reported record revenue and net income for 2022. It continues to see strong demand for DAF, Peterbilt and Kenworth new truck models worldwide.
In 2022, PACCAR paid total cash dividends, including a regular and extra cash dividends, of $4.19. That’s a total shareholder return of 17.1%.
Shares of PACCAR are up 9.7% year-to-date yet it’s still cheap with a forward P/E of 11.4.
Should PACCAR be on the short list?
What Else Should You Know About Avoiding This Big Investing Mistake?
Listen to this week’s podcast to find out.