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Zacks Value Investor Highlights: Paolo Alto, Lululemon, Tesla, Nike and Starbucks
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For Immediate Release
Chicago, IL – April 1, 2024 – 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/2241572/5-top-small-cap-stocks-with-growth-and-value
5 Popular Stocks on Sale: Values or Traps?
(0:30) - Finding Popular Stocks That Are On Sale
(6:45) - Tracey’s Top Stock Picks: Creating A Strong Watch List
Welcome to Episode #363 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 the S&P 500 continues to hit new all-time highs, not every stock has been soaring in 2024. In fact, there are some that are in the red year-to-date, including some former high-fliers.
The market is ignoring these stocks. They’ve gone on sale. But are they a value or are they a trap?
How to Tell if a Stock is a Value, or a Trap
Remember, the key to telling if a stock is a true value, or if it’s a trap, is to check out the analyst earnings estimates. Is the full year consensus expected to fall year-over-year? Is the earnings growth slowing?
That usually indicates there is something going on in the business which then can translate over to the stock price.
A true value will still have rising earnings growth for this year and next.
Finding Value in Fallen Growth Stocks
Not all value stocks are classic values with low P/E, P/B, P/S or PEG ratios. Some stocks may be values because they are trading at a discount to their industry peers or because a plunge in the shares has made the company historically cheap.
This week, Tracey looks at 5 stocks that have fallen from their former glory. They are on “sale”. But are they a true deal?
Palo Alto Networks is one of the popular cybersecurity stocks. But after its last earnings report, the shares dropped sharply. Year-to-date, shares of Palo Alto Networks are down 4.3%.
Earnings are expected to grow 23.6% this year while sales rise another 16%. Palo Alto Networks still trades with a forward P/E of 52, even as the shares have pulled back.
Lululemon is a specialty retailer famous for its popular yoga pants. Shares plunged 17% over the last month after the company guided for next year earnings below the Zacks Consensus.
Earnings of Lululemon are still expected to rise 10.8% this year on sales growth of 12%. It has gotten cheaper on a P/E basis since the sell-off. Lululemon now trades at 27x forward earnings.
Nike shares recently plunged after the company reported its fiscal third quarter 2024 earnings. Nike is down 10.5% over the last month and over the last year, is down 23.3%.
Analysts have been adjusting their earnings estimates over the last week. 8 are higher for fiscal 2024. Nike’s earnings are expected to rise 15.2% this year. But 9 estimates have been cut for fiscal 2025 as well.
Nike trades with a forward P/E of 25. It pays a dividend yielding 1.6%.
Starbucks shares have been under the weather for the last year. They’ve been ignored by the Street. Starbucks shares recently traded near 52-week lows, down 7.1% during that time.
Earnings of Starbucks are expected to rise 14.7% in fiscal 2024 on sales growth of 7.8%. Starbucks trades with a forward P/E of 22.5.
Is Starbucks a value or is it a trap?
What Else Do You Need to Know About Stocks on Sale?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of LULU and SBUX in her personal portfolio.]
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
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.
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.
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: Paolo Alto, Lululemon, Tesla, Nike and Starbucks
For Immediate Release
Chicago, IL – April 1, 2024 – 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/2241572/5-top-small-cap-stocks-with-growth-and-value
5 Popular Stocks on Sale: Values or Traps?
Welcome to Episode #363 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 the S&P 500 continues to hit new all-time highs, not every stock has been soaring in 2024. In fact, there are some that are in the red year-to-date, including some former high-fliers.
The market is ignoring these stocks. They’ve gone on sale. But are they a value or are they a trap?
How to Tell if a Stock is a Value, or a Trap
Remember, the key to telling if a stock is a true value, or if it’s a trap, is to check out the analyst earnings estimates. Is the full year consensus expected to fall year-over-year? Is the earnings growth slowing?
That usually indicates there is something going on in the business which then can translate over to the stock price.
A true value will still have rising earnings growth for this year and next.
Finding Value in Fallen Growth Stocks
Not all value stocks are classic values with low P/E, P/B, P/S or PEG ratios. Some stocks may be values because they are trading at a discount to their industry peers or because a plunge in the shares has made the company historically cheap.
This week, Tracey looks at 5 stocks that have fallen from their former glory. They are on “sale”. But are they a true deal?
5 Growth Stocks That are on Sale
1. Palo Alto Networks, Inc. (PANW - Free Report)
Palo Alto Networks is one of the popular cybersecurity stocks. But after its last earnings report, the shares dropped sharply. Year-to-date, shares of Palo Alto Networks are down 4.3%.
Earnings are expected to grow 23.6% this year while sales rise another 16%. Palo Alto Networks still trades with a forward P/E of 52, even as the shares have pulled back.
Is Palo Alto Networks a value or a trap?
2. Lululemon Athletica Inc. (LULU - Free Report)
Lululemon is a specialty retailer famous for its popular yoga pants. Shares plunged 17% over the last month after the company guided for next year earnings below the Zacks Consensus.
Earnings of Lululemon are still expected to rise 10.8% this year on sales growth of 12%. It has gotten cheaper on a P/E basis since the sell-off. Lululemon now trades at 27x forward earnings.
Is Lululemon a value or a trap?
3. Tesla, Inc. (TSLA - Free Report)
EV sales are down and so are the shares of Tesla in 2024. Tesla shares have fallen 28.8% year-to-date.
Analysts are bearish on Tesla. In just the last week, one estimate has been cut for this year. Earnings are expected to fall 2.2% this year.
Shares aren’t cheap on a P/E basis at 59. But Tesla investors have never cared about the P/E.
Is Tesla a value or a trap?
4. Nike Inc. (NKE - Free Report)
Nike shares recently plunged after the company reported its fiscal third quarter 2024 earnings. Nike is down 10.5% over the last month and over the last year, is down 23.3%.
Analysts have been adjusting their earnings estimates over the last week. 8 are higher for fiscal 2024. Nike’s earnings are expected to rise 15.2% this year. But 9 estimates have been cut for fiscal 2025 as well.
Nike trades with a forward P/E of 25. It pays a dividend yielding 1.6%.
Is Nike a value or a trap after the sell-off?
5. Starbucks Corp. (SBUX - Free Report)
Starbucks shares have been under the weather for the last year. They’ve been ignored by the Street. Starbucks shares recently traded near 52-week lows, down 7.1% during that time.
Earnings of Starbucks are expected to rise 14.7% in fiscal 2024 on sales growth of 7.8%. Starbucks trades with a forward P/E of 22.5.
Is Starbucks a value or is it a trap?
What Else Do You Need to Know About Stocks on Sale?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of LULU and SBUX in her personal portfolio.]
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% 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.
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/
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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support@zacks.com
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.