- (0:45) - Finding Zacks #1 Rank Value Stocks
- (7:00) - Tracey’s Top Stock Picks
- (21:25) - Episode Roundup: AMKR, APOG, DXPE, BJ, SLGN
Welcome to Episode #192 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.
With so many companies withdrawing full year earnings guidance and with earnings on the decline in 2020 thanks to the economic shutdowns from the coronavirus, its hard to figure out what companies are the best quality.
That’s where the Zacks Rank comes in handy.
The top Zacks Rank, the Zacks Rank #1 (Strong Buy), allows investors to narrow the list of stocks they’re considering.
These are the companies which, hopefully, have rising earnings estimates.
In 2020, rising estimates are rare. Analysts, instead, have been cutting their estimates for most companies thanks to the coronavirus shutdowns.
Instead of floundering around, looking at thousands of stocks, why not use the Zacks Rank as the key component to narrow your stock search?
Screening for Top Value Stocks
But just using the Zacks Rank in a screen will still give you a big pool of stocks. Currently there are about 210 Zacks #1 Rank (Strong Buy) stocks.
Why not look for cheap Rank #1 (Strong Buy) stocks?
Value investors can narrow that number further by adding some of the classic value fundamentals to the screen.
Keep it simple and look for price-to-earnings ratios under 20 and price-to-sales ratios under 1.0.
Running this basic screen returned 22 value stocks.
5 Top Value Stocks to Buy Now
1. Amkor Technology (AMKR - Free Report) is a semiconductor packaging and test services company with a market cap of $2.7 billion. Shares are still down 11.8% year-to-date and have a P/S ratio of just 0.6. Earnings are expected to rise 25% year-over-year and the 2020 earnings estimates are on the rise over the last 60 days.
2. Apogee Enterprises (APOG - Free Report) makes architectural glass, framing systems and does installation in skyscrapers. The shares are still down 24% year-to-date and are cheap, with a forward P/E of just 10.2. Fiscal year estimates have jumped to $2.21 from $1.99 in the last 2 months.
3. DXP Enterprises (DXPE - Free Report) is in pump solutions, supply chain services, metal working services and safety services to industrial, agriculture and manufacturing industries. It was an “essential” business during the coronavirus shutdowns and never closed. 2020 earnings estimates have risen in the last month. Shares are still down 49% year-to-date and the company has a forward P/E of just 11.6.
4. BJ’s Wholesale Club (BJ - Free Report) is benefitting from the lockdown and the need to cook at home. Not only is it a Zacks Rank #1 (Strong Buy), but it has Zacks Style Scores of “A” in all categories of Value, Growth and Momentum. Shares are up 61% year-to-date but are still cheap with a P/S ratio of just 0.4. Earnings are expected to rise 51.4% year-over-year.
5. Silgan Holdings (SLGN - Free Report) makes metal containers, metal and plastic closures and dispensing systems for consumer goods products. Some of its customers include Campbell’s, Del Monte and Listerine. In April, it reported record earnings in Q1 and raised its full year outlook, even with COVID-19. An “essential” business, all 100 of its global facilities remained open during the crisis. It’s cheap, with a forward P/E of just 13.6.
What else should you know about screening for the top value stocks right now?
Listen to this week’s podcast to find out.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>