- (1:00) – Finding Cheap Stocks In A Beaten Down Market
- (7:15) – Tracey’s Top Stock Picks
- (22:45) – Bonus Stocks To Keep On Your Radar
- (28:30) – Episode Roundup: OROVY, SWBI, KBH, CWH, WGO, DKS, HIBB, VSTO, WTI, DOW, LAD, PAG, GPI
Welcome to Episode #244 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 summer, large cap stocks have seen a pull-back of 3% and the small caps corrected, falling 10%.
Stocks are on sale.
Where are the best deals?
Screening for Cheap Strong Buy Stocks
Zacks #1 Rank (Strong Buy) list can be sorted by investing strategy including value stocks.
Currently, there are dozens of Strong Buy stocks that have forward P/Es under 10.
But be warned, that the Zacks Rank #1 (Strong Buy) list is just the first step for investors. It provides a list of companies that currently have earnings estimates which analysts have recently revised higher.
Investors can use this as a starting point, however, to further research a company.
Additionally, extra low P/E ratios can also be a warning sign about a particular business.
Do your homework.
5 of the Cheapest Strong Buy Stocks
1. Orient Overseas International OROVY is currently the cheapest stock on the Zacks Rank list with a forward P/E of just 1.85. It’s a Hong Kong-based container transport and logistics company. Earnings are expected to soar 568% this year but are forecast to cool off in 2022 by 46%. It trades with extremely low volume of just 1500 shares per session.
2. Smith & Wesson SWBI has a forward P/E of 5.6. While gun sales have surged during the pandemic, as have Smith & Wesson’s earnings, analysts expect earnings and revenue to fall in fiscal 2022 on the reopen. Shares have fallen 29% since July 1.
3. KB Home KBH was a big pandemic winner as the housing market had its best year in 15 years. Earnings are expected to be up 99% in 2021 and another 12.6% in 2022. But the Street is worried about “peak earnings” so the shares trade with a forward P/E of just 6.5. It’s the cheapest home builder, by P/E, on the Zacks #1 Rank list.
4. Camping World CWH is another pandemic winner as consumers flocked to the outdoors. But analysts are also wondering if the sales haven’t been pulled forward. Earnings are expected to rise 54% in 2021 but decline 5.1% in 2022 as the pandemic fades. It’s dirt cheap, with a forward P/E of just 6.9 and a PEG of 0.2.
5. W&T Offshore WTI drills offshore in the Gulf of Mexico. This small cap oil company is expected to grow earnings by 387% this year and another 71% next year. But shares have fallen 8% in the last month as oil stocks remain out of favor. This is the cheapest E&P on the Zacks #1 Rank list, with a forward P/E of just 8.
What else should you know about top stocks on sale?
Listen to this week’s podcast to find out.