We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Welcome to Episode #454 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.
It’s time to find some more high-quality value stocks. With the recent sell-off in the AI Revolution stocks, even those high-growth names have gotten cheaper.
But are any of them truly “undervalued” at this time?
Use the Zacks Rank to Find Top Stocks
Anyone can screen for cheap stocks. But how do you find the highest quality companies?
Use the Zacks Rank. The Rank is a short-term recommendation of 1 to 3 months which is based on changes to analyst earnings estimates. When the analysts are all raising their estimates on a company, and none are cutting estimates, it usually means something good is going on at that company.
The Zacks Rank can change daily, as analyst estimates are constantly changing.
At any given time, there are between 200 and 250 companies with the top Zacks Rank of #1, which is a strong buy. This is an exclusive group of companies.
Screening for Top Undervalued Stocks
To find the best undervalued stocks, you should start with the top Zacks Rank of #1 (Strong Buy).
This screen looks for value using a price-to-earnings (P/E) ratio under 20 and a price-to-sales (P/S) ratio under 1.0. A P/S ratio of 0.5 indicates you are paying $0.50 for every $1.00 worth of sales. That’s a deal.
It’s difficult to get cheap earnings and sales alongside a top Zacks Rank of Strong Buy.
ADM is a global agricultural supply chain manager and processor. In business for over 120 years, it has called itself the “supermarket to the world.”
Earnings are expected to jump 52.2% this year. Shares of ADM are up 48% year-to-date but it’s still cheap. ADM trades with a P/S ratio of just 0.5. That means investors are paying $0.50 for every $1.00 worth of ADM sales.
ADM is shareholder friendly. It has paid an uninterrupted quarterly dividend for 94 years. The dividend is currently $2.08 per share, with a yield of 2.4%.
ADM is a Zacks Rank #1 (Strong Buy) stock.
Should value investors have ADM on their short list?
Delek US Holdings is a downstream energy company with assets in petroleum refining, logistics, pipelines, and renewable fuels. It has a refining capacity of about 302,000 barrels a day from operations in Texas, Arkansas and Louisiana.
Earnings have been soaring in the refining industry due to record high crack spreads. 3 estimates were raised on Delek US Holdings in the last week, pushing the Zacks Consensus up to $15.83 from $11.93. Analysts expect Delek to grow earnings by 139.8% this year.
Shares of Delek US Holdings have soared 164% year-to-date to new highs. But it’s still cheap as earnings soar. Delek trades with a forward P/E of just 5.3. A P/E under 10 is considered to be dirt cheap.
Delek is a rare Zacks #1 Rank (Strong Buy) stock that also has Styles Scores of A across the board for Value, Growth, and Momentum.
With Delek trading at new highs, is it a stock for traders and not investors?
Sanmina is a global integrated manufacturing solutions company. It’s capturing some of the AI Revolution spend in the data centers. Earnings are expected to jump 100% this year to $12.11 from $6.04 in 2025.
Shares of Sanmina have jumped 33.5% year-to-date but the company remains undervalued. Sanmina has a P/S ratio of 0.8. That means investors are paying just $0.80 for every $1.00 worth of sales.
Sanmina is a Zacks Rank #1 (Strong Buy).
Should value investors buy the AI stocks like Sanmina right now?
What Else Should You Know About Undervalued Stocks?
Tune into this week’s podcast to find out and to get an extra bonus stock.
View the Zacks #1 Rank List
Image: Bigstock
3 Strong Buy Undervalued Stocks Right Now
Key Takeaways
Welcome to Episode #454 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.
It’s time to find some more high-quality value stocks. With the recent sell-off in the AI Revolution stocks, even those high-growth names have gotten cheaper.
But are any of them truly “undervalued” at this time?
Use the Zacks Rank to Find Top Stocks
Anyone can screen for cheap stocks. But how do you find the highest quality companies?
Use the Zacks Rank. The Rank is a short-term recommendation of 1 to 3 months which is based on changes to analyst earnings estimates. When the analysts are all raising their estimates on a company, and none are cutting estimates, it usually means something good is going on at that company.
The Zacks Rank can change daily, as analyst estimates are constantly changing.
At any given time, there are between 200 and 250 companies with the top Zacks Rank of #1, which is a strong buy. This is an exclusive group of companies.
Screening for Top Undervalued Stocks
To find the best undervalued stocks, you should start with the top Zacks Rank of #1 (Strong Buy).
This screen looks for value using a price-to-earnings (P/E) ratio under 20 and a price-to-sales (P/S) ratio under 1.0. A P/S ratio of 0.5 indicates you are paying $0.50 for every $1.00 worth of sales. That’s a deal.
It’s difficult to get cheap earnings and sales alongside a top Zacks Rank of Strong Buy.
This screen returned 50 stocks.
3 Strong Buy Undervalued Stocks Right Now
1. ADM (ADM - Free Report)
ADM is a global agricultural supply chain manager and processor. In business for over 120 years, it has called itself the “supermarket to the world.”
Earnings are expected to jump 52.2% this year. Shares of ADM are up 48% year-to-date but it’s still cheap. ADM trades with a P/S ratio of just 0.5. That means investors are paying $0.50 for every $1.00 worth of ADM sales.
ADM is shareholder friendly. It has paid an uninterrupted quarterly dividend for 94 years. The dividend is currently $2.08 per share, with a yield of 2.4%.
ADM is a Zacks Rank #1 (Strong Buy) stock.
Should value investors have ADM on their short list?
2. Delek US Holdings, Inc. (DK - Free Report)
Delek US Holdings is a downstream energy company with assets in petroleum refining, logistics, pipelines, and renewable fuels. It has a refining capacity of about 302,000 barrels a day from operations in Texas, Arkansas and Louisiana.
Earnings have been soaring in the refining industry due to record high crack spreads. 3 estimates were raised on Delek US Holdings in the last week, pushing the Zacks Consensus up to $15.83 from $11.93. Analysts expect Delek to grow earnings by 139.8% this year.
Shares of Delek US Holdings have soared 164% year-to-date to new highs. But it’s still cheap as earnings soar. Delek trades with a forward P/E of just 5.3. A P/E under 10 is considered to be dirt cheap.
Delek is a rare Zacks #1 Rank (Strong Buy) stock that also has Styles Scores of A across the board for Value, Growth, and Momentum.
With Delek trading at new highs, is it a stock for traders and not investors?
3. Sanmina Corp. (SANM - Free Report)
Sanmina is a global integrated manufacturing solutions company. It’s capturing some of the AI Revolution spend in the data centers. Earnings are expected to jump 100% this year to $12.11 from $6.04 in 2025.
Shares of Sanmina have jumped 33.5% year-to-date but the company remains undervalued. Sanmina has a P/S ratio of 0.8. That means investors are paying just $0.80 for every $1.00 worth of sales.
Sanmina is a Zacks Rank #1 (Strong Buy).
Should value investors buy the AI stocks like Sanmina right now?
What Else Should You Know About Undervalued Stocks?
Tune into this week’s podcast to find out and to get an extra bonus stock.