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Zacks Value Investor Highlights: General Motors, PayPal, EOG, Toyota and LegalZoom
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For Immediate Release
Chicago, IL – December 1, 2023 – Zacks Value Investor 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: https://www.zacks.com/stock/news/2191818/value-investors-how-to-find-great-cheap-companies
Value Investors: How to Find Great, Cheap Companies
Welcome to Episode #351 of the Value Investor Podcast.
(0:30) - Rest In Peace Charlie Munger
(4:15) - You Know It When You See It: Finding Strong Value Companies
(10:30) - PEG Ratio Stock Screener: Breaking Down The Criteria
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Charlie Munger, the Executive Chairman of Berkshire Hathaway, best friend of Warren Buffett and legendary investor, recently died at age 99. One of his most well-known pieces of advice he gave over the years to Warren Buffett was to not just buy cheap companies, but to buy great, cheap companies.
It sounds so simple, right?
But finding “great” companies that are flying under the radar is difficult.
2 Methods for Finding Great Companies
1. You Know It When You See It
There is no scientific algorithm behind method #1. Many times, you will simply know a company is cheap, and that it’s a great company, by instinct.
2. Run a Screen
For the purposes of this podcast, Tracey ran a Zacks premium screen looking for both value and growth using the PEG ratio. It also incorporated the top Zacks Ranks of #1 (Strong Buy) or #2 (Buy).
This screen returned 13 top cheap stocks with growth.
PayPal shares have had a terrible 2-year period, falling 69% during that time. They’re also near 5-year lows, down 33% during that time. Meanwhile, the S&P 500 is up 65% during that 5-year period.
PayPal is now cheap with a forward P/E of just 11.8. Earnings are expected to be up 21% in 2023 and another 12% in 2024. PayPal has a PEG ratio of just 0.7. A PEG ratio under 1.0 indicates both growth and value.
Is PayPal a great cheap company you should have on your short list?
EOG Resources is a large independent oil and natural gas producer which drills in the Permian Basin, among other locations. Shares of EOG Resources are down 5.7% year-to-date as oil has fallen from 2022 highs.
EOG Resources is cheap with a forward P/E of 10. Earnings are expected to rise 12.6% in 2024, giving it a PEG ratio of just 0.4.
The company recently raised its 2024 cash return commitment to a minimum of 70% of annual free cash flow. EOG Resources also raised its regular dividend 10%.
Is EOG Resources a great cheap company you should have on your short list?
LegalZoom went IPO in 2021 and the shares soared. But since then, LegalZoom has retreated, falling nearly 70% from its IPO price. This year, it has rebounded off recent lows, however, gaining 55%.
LegalZoom is expected to see earnings rise 150% in 2023 and another 18.1% in 2024. It has a PEG ratio of just 0.5. A PEG ratio under 1.0 usually indicates a company has both growth and value.
Is LegalZoom a great cheap company that should be on your short list?
What Else Do You Need to Know About Finding Great Cheap Companies?
Tune into this week’s podcast to find out.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
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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 Investor Highlights: General Motors, PayPal, EOG, Toyota and LegalZoom
For Immediate Release
Chicago, IL – December 1, 2023 – Zacks Value Investor 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: https://www.zacks.com/stock/news/2191818/value-investors-how-to-find-great-cheap-companies
Value Investors: How to Find Great, Cheap Companies
Welcome to Episode #351 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.
Charlie Munger, the Executive Chairman of Berkshire Hathaway, best friend of Warren Buffett and legendary investor, recently died at age 99. One of his most well-known pieces of advice he gave over the years to Warren Buffett was to not just buy cheap companies, but to buy great, cheap companies.
It sounds so simple, right?
But finding “great” companies that are flying under the radar is difficult.
2 Methods for Finding Great Companies
1. You Know It When You See It
There is no scientific algorithm behind method #1. Many times, you will simply know a company is cheap, and that it’s a great company, by instinct.
2. Run a Screen
For the purposes of this podcast, Tracey ran a Zacks premium screen looking for both value and growth using the PEG ratio. It also incorporated the top Zacks Ranks of #1 (Strong Buy) or #2 (Buy).
This screen returned 13 top cheap stocks with growth.
5 Cheap Value Stocks: But Are They Great?
1. General Motors Co. (GM - Free Report)
General Motors has been a cheap stock for years. It currently trades with a forward P/E of just 4.1.
General Motors just announced a $10 billion share buyback and it raised its dividend by 33%. Its dividend currently yields 1.3%.
Earnings are expected to fall 7.8% in 2023 and another 3.5% in 2024.
Is General Motors a great cheap company you should have on your short list?
2. PayPal Holdings, Inc. (PYPL - Free Report)
PayPal shares have had a terrible 2-year period, falling 69% during that time. They’re also near 5-year lows, down 33% during that time. Meanwhile, the S&P 500 is up 65% during that 5-year period.
PayPal is now cheap with a forward P/E of just 11.8. Earnings are expected to be up 21% in 2023 and another 12% in 2024. PayPal has a PEG ratio of just 0.7. A PEG ratio under 1.0 indicates both growth and value.
Is PayPal a great cheap company you should have on your short list?
3. EOG Resources, Inc. (EOG - Free Report)
EOG Resources is a large independent oil and natural gas producer which drills in the Permian Basin, among other locations. Shares of EOG Resources are down 5.7% year-to-date as oil has fallen from 2022 highs.
EOG Resources is cheap with a forward P/E of 10. Earnings are expected to rise 12.6% in 2024, giving it a PEG ratio of just 0.4.
The company recently raised its 2024 cash return commitment to a minimum of 70% of annual free cash flow. EOG Resources also raised its regular dividend 10%.
Is EOG Resources a great cheap company you should have on your short list?
4. Toyota Motor Corp. (TM - Free Report)
Toyota shares are up on the year, gaining 39% year-to-date. However, Toyota remains a cheap stock with a forward P/E of just 9.7.
Earnings are expected to rise 45.4% in fiscal 2024. Toyota also pays a dividend, yielding 2.7%.
There are a lot of changes coming to the auto industry in the next decade. Is Toyota a great cheap company you should have on your short list?
5. LegalZoom.com, Inc. (LZ - Free Report)
LegalZoom went IPO in 2021 and the shares soared. But since then, LegalZoom has retreated, falling nearly 70% from its IPO price. This year, it has rebounded off recent lows, however, gaining 55%.
LegalZoom is expected to see earnings rise 150% in 2023 and another 18.1% in 2024. It has a PEG ratio of just 0.5. A PEG ratio under 1.0 usually indicates a company has both growth and value.
Is LegalZoom a great cheap company that should be on your short list?
What Else Do You Need to Know About Finding Great Cheap Companies?
Tune into this week’s podcast to find out.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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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.