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Zacks Value Investor Highlights: iShares Russell 2000 Value, Vanguard Small Cap Value, Ultra Clean Holdings Francesca's Holdings and Smart Global Holdings
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For Immediate Release
Chicago, IL – December 1, 2017 – 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/284501/could-these-be-the-hottest-stocks-of-2018)
Could These Be the Hottest Stocks of 2018?
Welcome to Episode #70 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.
There’s no denying that 2017 was the year of the big caps, especially technology stocks and the FANG names. Nothing stopped them as they powered to record highs, taking the NASDAQ with them.
But in the last 3 months, there’s been a shift in the wind. The small cap stocks have, surprisingly, outperformed, rising 11% while the S&P 500 gained just 7.5%.
Could the story be changing?
The Contrarian Play: Small Cap Value Stocks
Small cap growth was the driver behind most of those gains over the last 3 months. The Vanguard Small Cap Growth ETF is up 18% year-to-date versus just 5.5% for the Vanguard Small Cap Value ETF (VBR - Free Report) .
Similarly, the iShares Russell 2000 Growth ETF has jumped 20.5% while the iShares Russell 2000 Value ETF (IWN - Free Report) has gained just 6%.
Value continues to trail growth in small, mid and large caps stocks.
But historically, small cap value stocks are the best performing segment of the stock market.
2017’s continued weakness could be a buying opportunity for value investors.
Screening for Small Cap Value Stocks
Tracey ran a screen to find companies with a market cap under $1.5 billion, with a Zacks Rank of #1 (Strong Buy), #2 (Buy) or #3 (Hold) which were still cheap.
She looked for forward P/Es under 15 and PEG ratios under 1.0, so that there was also some growth.
Even with these narrow parameters, there were still 40 companies that met the criteria.
Tracey narrowed it down to three companies that had intriguing stories.
3 Cheap Small Cap Stocks
1. Ultra Clean Holdings, Inc. (UCTT - Free Report) has a market cap of $815 million. Earnings are expected to soar 260% in 2017. It’s in the hot semiconductor sector but it’s still cheap, with a forward P/E of 10.4.
2. Francesca’s Holdings Corporation is small, with a market cap of just $257 million. This women’s specialty retailer saw some rough times recently, as earnings are expected to drop 31% this year. But is the worst over for the apparel retailers? Earnings are expected to rebound 7% in 2018. It’s trading with a forward P/E of just 9.4.
3. Smart Global Holdings (SGH - Free Report) specializes in memory, storage and solutions for the electronics industry. On Nov 15, it pre-announced stronger than expected earnings which were at the high end of prior guidance. It has a market cap of just $800 million and is trading with a PEG ratio of just 0.7.
Remember, with small cap companies, there are fewer analysts covering them so there is not as much information readily available. Investors really have to do their homework.
What else should you know about small cap value stocks for 2018?
Listen to this week’s podcast to find out.
[In full disclosure, the author of this article owns shares of VBR in her personal portfolio.]
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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/performancefor information about the performance numbers displayed in this press release.
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Zacks Value Investor Highlights: iShares Russell 2000 Value, Vanguard Small Cap Value, Ultra Clean Holdings Francesca's Holdings and Smart Global Holdings
For Immediate Release
Chicago, IL – December 1, 2017 – 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/284501/could-these-be-the-hottest-stocks-of-2018)
Could These Be the Hottest Stocks of 2018?
Welcome to Episode #70 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.
There’s no denying that 2017 was the year of the big caps, especially technology stocks and the FANG names. Nothing stopped them as they powered to record highs, taking the NASDAQ with them.
But in the last 3 months, there’s been a shift in the wind. The small cap stocks have, surprisingly, outperformed, rising 11% while the S&P 500 gained just 7.5%.
Could the story be changing?
The Contrarian Play: Small Cap Value Stocks
Small cap growth was the driver behind most of those gains over the last 3 months. The Vanguard Small Cap Growth ETF is up 18% year-to-date versus just 5.5% for the Vanguard Small Cap Value ETF (VBR - Free Report) .
Similarly, the iShares Russell 2000 Growth ETF has jumped 20.5% while the iShares Russell 2000 Value ETF (IWN - Free Report) has gained just 6%.
Value continues to trail growth in small, mid and large caps stocks.
But historically, small cap value stocks are the best performing segment of the stock market.
2017’s continued weakness could be a buying opportunity for value investors.
Screening for Small Cap Value Stocks
Tracey ran a screen to find companies with a market cap under $1.5 billion, with a Zacks Rank of #1 (Strong Buy), #2 (Buy) or #3 (Hold) which were still cheap.
She looked for forward P/Es under 15 and PEG ratios under 1.0, so that there was also some growth.
Even with these narrow parameters, there were still 40 companies that met the criteria.
Tracey narrowed it down to three companies that had intriguing stories.
3 Cheap Small Cap Stocks
1. Ultra Clean Holdings, Inc. (UCTT - Free Report) has a market cap of $815 million. Earnings are expected to soar 260% in 2017. It’s in the hot semiconductor sector but it’s still cheap, with a forward P/E of 10.4.
2. Francesca’s Holdings Corporation is small, with a market cap of just $257 million. This women’s specialty retailer saw some rough times recently, as earnings are expected to drop 31% this year. But is the worst over for the apparel retailers? Earnings are expected to rebound 7% in 2018. It’s trading with a forward P/E of just 9.4.
3. Smart Global Holdings (SGH - Free Report) specializes in memory, storage and solutions for the electronics industry. On Nov 15, it pre-announced stronger than expected earnings which were at the high end of prior guidance. It has a market cap of just $800 million and is trading with a PEG ratio of just 0.7.
Remember, with small cap companies, there are fewer analysts covering them so there is not as much information readily available. Investors really have to do their homework.
What else should you know about small cap value stocks for 2018?
Listen to this week’s podcast to find out.
[In full disclosure, the author of this article owns shares of VBR in her personal portfolio.]
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
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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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/performancefor information about the performance numbers displayed in this press release.