For Immediate Release
Chicago, IL – October 11, 2019 – Zacks Value Trader 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:
Ben Graham's Tips on How to Find Bargain Stocks
Welcome to Episode #160 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.
This week she continues her series of podcasts covering Benjamin Graham’s best-selling book for value investors called “The Intelligent Investor.”
First published in 1949, the last edition by Graham was published in 1973. But in 2003, Jason Zweig, along with a preface by Warren Buffett, updated the book to account for the events of the last 40 years.
If you have the time, you should take a deep dive into the book. Ben Graham’s tips for finding stocks in the 1940s, 50s, and 60s are still highly relevant in 2019.
Tips for Finding Bargain Stocks
How do investors seize the opportunity and find the best cheap stocks?
Graham tells investors to look for a bargain condition which can mean
1. That the company just reported disappointing results, and
2. It suffers from protracted neglect or unpopularity.
There are plenty of these companies right now on the stock exchanges.
How do investors narrow it down?
Screening for Bargain Stocks
Graham suggests looking for stocks that are trading at 52-week lows, which would indicate they were unpopular, as well stocks selling for less than net value of net working capital.
To increase the number of stock ideas, you can screen for both mid and large cap stocks, trading at 52-week lows, with a price-to-book ratio under 1.0.
That’s a really low P/B ratio which should get you some deep value.
This screen returned just 20 stocks.
What was on the list? Lots of commodities plays, not surprisingly as many of the energy stocks, which are hated on the Street, are hitting new lows again.
5 Bargain Stocks Trading Near 52-Week Lows
1. Carnival Corp. (CCL - Free Report) , the cruise ship operator, recently cut its earnings guidance for the year, again, which has pushed the stock down to new lows. Shares have fallen 17.8% year-to-date. Analysts have been cutting estimates for this year and next too. But shares are cheap with a P/E of just 9.4. It pays a dividend yielding 5%.
2. Athene Holding (ATH - Free Report) is a leader provider of retirement savings products like annuities. Year-to-date, the shares are down 4.8%. With a price-to-book ratio of just 0.6 and a PEG of 0.4, it has the rare combination of growth and value.
3. Diamondback Energy (FANG - Free Report) is one of the top energy producers in the Permian Basin. Year-to-date, shares have fallen 12.4%, much of it coming after the President and COO abruptly resigned from the company for personal reasons. Could this be a buying opportunity? The PEG ratio is 0.4 as it’s expected to grow earnings by 19% this year.
4. Carrefour SA (CRRFY - Free Report) is a large French grocer which has operations throughout Europe and Latin America, especially Brazil. It has a $13 billion market cap and pays a dividend yielding 3%. Shares have fallen 16.3% in just the last 3 months. It now sports a forward P/E of 12.
5. Freeport McMoran (FCX - Free Report) is a copper and gold miner with a market cap of $12.4 billion. Investors have fled the copper miners this year on global recession fears. Freeport now has a price-to-book ratio of just 0.7. It also pays a dividend currently yielding 2.4%.
What else should you know about finding bargain stocks?
Tune into this week’s podcast to find out.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Investment Research
800-767-3771 ext. 9339
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.