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Value Investors Can Join in the Rally Too

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Welcome to Episode #40 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.

Stocks are breaking out to new highs again. Right now, the rally is being led by growth stocks which can leave value investors feeling demoralized.

But don’t fret.

Value investors don’t have to miss out on all the rally fun.

Screening for Value During the Rally

Tracey ran a screen looking for Zacks Rank #1 (Strong Buy) and #2 (Buy) stocks, that were higher over the last 12 weeks and which also had a P/S ratio under 1.0.

This screen would give you value stocks that had momentum. Yes, such a thing does exist.

She’s talked about this rare combination on the podcast before. Listen here.

Why did she use the price-to-sales ratio and not the P/E?

Many value investors find the P/S ratio to give a more accurate look at a company’s valuation because it’s harder to mess around with the sales numbers.

Tracey wasn’t sure she’d get enough companies using this screen but she was surprised when she got 16 solid choices.

Here are her favorites.

3 Value Stocks with Momentum

1.     Amkor Technology (AMKR - Free Report) provides services to the semiconductor industry. It’s P/S ratio is just 0.7 and shares have jumped 21% over the last 12 weeks.

2.    Scientific Games Corporation provides gambling and lottery services worldwide. Play the state lottery? You’ve probably used their product. It also has a P/S ratio of just 0.7 and shares have gained 21% during the last 12 weeks.

3.    Meritor makes drivetrain, mobility, braking and provides aftermarket services for medium and heavy duty trucks as well as military and emergency vehicles and buses. Yes, they JUST reported and missed. But Meritor saw improvement in global end markets in Q1. It has a P/S ratio of just 0.5 and shares were up 15% in the last 12 weeks, before the earnings report.

A few other names that are cheap and have momentum that you might want to keep on your list are Best Buy (BBY - Free Report) and Huntsman (HUN - Free Report) , up 17% and 24%, respectively, over the last 12 weeks.

Those rallies aren’t too shabby for a bunch of value stocks.

What else should value investors know about value stocks with momentum?

Tune into this week’s podcast to find out.

Want more value investing insights from Tracey?

Check out her weekly Value Investor service to receive more in-depth analysis on value companies and see which stocks Tracey thinks are the best bargains now.

 

It holds between 20 and 25 value stocks for the long haul.

 

Click here to learn more.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Best Buy Co., Inc. (BBY) - free report >>

Amkor Technology, Inc. (AMKR) - free report >>

Huntsman Corporation (HUN) - free report >>