For Immediate Release
Chicago, IL – July 17, 2020 – 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:
How to Find True Value Stocks and Avoid Value Traps
Welcome to Episode #197 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 talking heads in finance are back to talking about the “rotation” into value stocks. But by “value” they’re talking about the hotels, airlines, cruise ship companies, the banks and retailers.
But just because a stock has sold off, doesn’t mean it’s a “value.”
Remember, value is determined by fundamentals like the price-to-earnings ratio which depends on the earnings, as much as the price.
Are these “value” stocks really true values?
Value Stocks or Traps?
• Expedia EXPE doesn’t have a P/E. The current Zacks Consensus Estimate for 2020 is a loss of $5.29. This is a stunning reversal from a year ago when it made $6.15. If you’re looking at the earnings, is it worth paying for that loss of $5.29 right now?
• JPMorgan Chase JPM used to trade around 11x earnings before the pandemic. But this year, the 2020 Zacks Consensus Estimate has fallen to $5.70. It made $10.72 last year. As a result, it’s P/E has risen to 17.2. With those earnings on a sharp decline, is this bank really a value?
• PVH Corp. PVH is in the difficult apparel retail industry. The fiscal 2020 Zacks Consensus Estimate has fallen to a loss of $3.01 in just the last 30 days. It made $9.54 last year so it’s a complete reversal. It also doesn’t have a P/E. Is it a value?
• Canadian Solar CSIQ is one of the rare companies that has not seen its earnings estimates slashed for 2020. Earnings are expected to grow 22% this year and 11% in 2021. Even as shares have risen in the past month, they’re still cheap with a PEG of 0.3. A value or a trap?
• Lithia Motors LAD is an auto retailer. 2 analysts have revised 2020’s earnings estimates higher in the last week as auto sales data remains hot. Shares are up 97% in the last 3 months but it’s still trading with a forward P/E of just 18. A value or a trap?
What else do you need to know about finding true value stocks, and avoiding traps?
Listen to this week’s podcast to find out.
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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://ift.tt/2tJCz1K information about the performance numbers displayed in this press release.
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JPMorgan Chase Co. (JPM) : Free Stock Analysis Report
Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
Expedia Group, Inc. (EXPE) : Free Stock Analysis Report
PVH Corp. (PVH) : Free Stock Analysis Report
Lithia Motors, Inc. (LAD) : Free Stock Analysis Report
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