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Welcome to Episode #442 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.
The major stock indexes are breaking out to new highs yet again. Many technology and AI Revolution stocks are breaking out as well.
It seems as if growth stocks are all that matter and that there aren’t any decent quality value stocks left.
Screening for Top Value Stocks
Tracey has screened for classic value stocks for the Value Investor Podcast for the last 10 years. The Screen is called “Classic Value Stocks with Zacks #1 and #2 Ranks.”
This Zacks Premium Screen has returned anywhere from 5 stocks to 14 stocks over the years.
You would think that with stocks soaring, that this screen, which is very narrow, would return few stocks. But this week, it returned 11 stocks. That’s on the high side.
A turnaround in energy earnings was a key factor as two big oil stocks made the list.
What’s in the Classic Value Screen?
Classic value means that it has cheap fundamentals in areas that value investors usually look at. That includes low price-to-earnings (P/E) ratios, low price-to-sales and low price-to-book ratios, and a PEG ratio under 1.0. A PEG ratio under 1.0 means a company has both growth and value.
This screen also looks for an attractive price-to-cash flow ratio under 20.
Most importantly, it adds in the Zacks Ranks of #1 (Strong Buy) or #2 (Buy) along with Zacks Style Scores for Value of A or B, which are the top two Style Scores.
These are value stocks where the analysts are raising earnings estimates. It’s a powerful combination.
Avnet is a global technology distributor and solutions provider with customers in 140 countries. It has been in business for 100 years and has always been in the background on technology.
But shares of Avnet have spiked 80% year-to-date and are trading at new all-time highs. Earnings are expected to jump 48.8% this year and 42.6% next year after seeing declining earnings the prior two years.
Avnet is a classic value stock, even with the shares soaring. It trades with a forward P/E of just 17 and a price-to-sales ratio of 0.29. A P/S ratio under 1.0 usually indicates a company is undervalued.
Avnet pays a dividend, currently yielding 1.6%.
It’s a Zacks #2 (Buy) stock.
Should a cheap technology distributor like Avnet be on your watch list?
Nexa Resources is a major global zinc producer. It has 8 operations between Brazil and Peru. Nexa Resources also produces copper, lead, silver, and gold as by-products.
In the first quarter of 2026, Nexa’s net revenue rose 42% due to higher realized metal prices, especially in silver. Earnings are expected to jump 214% in 2026.
Shares of Nexa Resources are up 170.6% year-to-date, but it’s still a deep value. Nexa trades with a forward P/E of 5.6. A P/E ratio under 10 usually indicates a company is extremely cheap. It also has a P/S ratio of just 0.6.
Nexa Resources is a Zacks Rank #1 (Strong Buy).
Should a metals mining company like Nexa Resources be on your watch list?
Dow is a materials science company with 29 manufacturing facilities worldwide. Shares of Dow hit a five-year low in 2025 as earnings slid. But Dow said it saw improving margins in March 2026 due to constraints on the global supply chain due to the Iran War.
Earnings are expected to jump 352% in 2026 with the Zacks Consensus rising to $2.37 from a loss of $0.08 just 60 days ago. Last year, Dow lost $0.94.
Up until recently, Dow was a value trap with falling earnings. The Iran War has changed the outlook.
Shares of Dow are up 38% year-to-date but have fallen 13% in the last month. It’s a deep value stock. Dow trades with a forward P/E of 14.7 and a P/S ratio of 0.6.
Dow is a Zacks Rank #1 (Strong Buy).
Should a materials company like Dow be on your watch list?
What Else Should You Know About Classic Value Stocks in this Red-Hot Stock Market?
Tune into this week’s podcast to find out.
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3 Top Classic Value Stocks for Your Watch List
Key Takeaways
Welcome to Episode #442 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.
The major stock indexes are breaking out to new highs yet again. Many technology and AI Revolution stocks are breaking out as well.
It seems as if growth stocks are all that matter and that there aren’t any decent quality value stocks left.
Screening for Top Value Stocks
Tracey has screened for classic value stocks for the Value Investor Podcast for the last 10 years. The Screen is called “Classic Value Stocks with Zacks #1 and #2 Ranks.”
This Zacks Premium Screen has returned anywhere from 5 stocks to 14 stocks over the years.
You would think that with stocks soaring, that this screen, which is very narrow, would return few stocks. But this week, it returned 11 stocks. That’s on the high side.
A turnaround in energy earnings was a key factor as two big oil stocks made the list.
What’s in the Classic Value Screen?
Classic value means that it has cheap fundamentals in areas that value investors usually look at. That includes low price-to-earnings (P/E) ratios, low price-to-sales and low price-to-book ratios, and a PEG ratio under 1.0. A PEG ratio under 1.0 means a company has both growth and value.
This screen also looks for an attractive price-to-cash flow ratio under 20.
Most importantly, it adds in the Zacks Ranks of #1 (Strong Buy) or #2 (Buy) along with Zacks Style Scores for Value of A or B, which are the top two Style Scores.
These are value stocks where the analysts are raising earnings estimates. It’s a powerful combination.
3 Top Classic Value Stocks for Your Watch List
1. Avnet, Inc. (AVT - Free Report)
Avnet is a global technology distributor and solutions provider with customers in 140 countries. It has been in business for 100 years and has always been in the background on technology.
But shares of Avnet have spiked 80% year-to-date and are trading at new all-time highs. Earnings are expected to jump 48.8% this year and 42.6% next year after seeing declining earnings the prior two years.
Avnet is a classic value stock, even with the shares soaring. It trades with a forward P/E of just 17 and a price-to-sales ratio of 0.29. A P/S ratio under 1.0 usually indicates a company is undervalued.
Avnet pays a dividend, currently yielding 1.6%.
It’s a Zacks #2 (Buy) stock.
Should a cheap technology distributor like Avnet be on your watch list?
2. Nexa Resources S.A. (NEXA - Free Report)
Nexa Resources is a major global zinc producer. It has 8 operations between Brazil and Peru. Nexa Resources also produces copper, lead, silver, and gold as by-products.
In the first quarter of 2026, Nexa’s net revenue rose 42% due to higher realized metal prices, especially in silver. Earnings are expected to jump 214% in 2026.
Shares of Nexa Resources are up 170.6% year-to-date, but it’s still a deep value. Nexa trades with a forward P/E of 5.6. A P/E ratio under 10 usually indicates a company is extremely cheap. It also has a P/S ratio of just 0.6.
Nexa Resources is a Zacks Rank #1 (Strong Buy).
Should a metals mining company like Nexa Resources be on your watch list?
3. Dow Inc. (DOW - Free Report)
Dow is a materials science company with 29 manufacturing facilities worldwide. Shares of Dow hit a five-year low in 2025 as earnings slid. But Dow said it saw improving margins in March 2026 due to constraints on the global supply chain due to the Iran War.
Earnings are expected to jump 352% in 2026 with the Zacks Consensus rising to $2.37 from a loss of $0.08 just 60 days ago. Last year, Dow lost $0.94.
Up until recently, Dow was a value trap with falling earnings. The Iran War has changed the outlook.
Shares of Dow are up 38% year-to-date but have fallen 13% in the last month. It’s a deep value stock. Dow trades with a forward P/E of 14.7 and a P/S ratio of 0.6.
Dow is a Zacks Rank #1 (Strong Buy).
Should a materials company like Dow be on your watch list?
What Else Should You Know About Classic Value Stocks in this Red-Hot Stock Market?
Tune into this week’s podcast to find out.