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(0:20) - 2017 Record Highs In The Stock Market: Was It A Perfect Year?
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(1:40) - Stocks Close To 52 Week Highs
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(4:00) - Tracey's Top Stock Picks
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(10:00) - Episode Roundup: Podcast@Zacks.com
Welcome to Episode #73 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.
Don’t be depressed, value investors. While growth has out performed in 2017, there are some value stocks that have soared along with the overall market.
For example, Weight Watchers WTW, was a cheap stock earlier in 2017. It traded with a forward P/E of around 15.
But it started posting much better than expected quarterly earnings and the shares popped.
They’re up about 300% on the year.
It was a wild ride for those value investors who got in.
Looking for Value Stocks with Momentum
It’s not just growth stocks which are breaking out to new highs. Tracey did a screen looking for value stocks trading within 10% of their 52-week highs.
She also screened for stocks which had Zacks Ranks of #1 (Strong Buy) or #2 (Buy). That most likely means these companies have rising earnings estimates.
The screen produced 42 companies, which is a pretty nice list.
Tracey cut it down to just these 4 names.
4 Value Stocks Breaking Out Ahead of 2018
1. American Eagle Outfitters AEO was left for dead in the fall. It was lumped in with the whole “all retailers are dead” scenario. But the shares have come storming back and are now up 20% year-to-date. It’s still cheap. It has a forward P/E of just 15.
2. Briggs & Stratton BGG is the largest maker of small engines. In 2017, it has seen choppy trading but shares are now up 12% year-to-date and look poised for a bigger breakout. It trades with a price-to-sales ratio of just 0.6. Earnings are expected to grow 14% in fiscal 2018.
3. Camping World CWH just went IPO this year. Already shares are up 41% year-to-date. It’s in a hot industry as it sells RVs, parts and services through 130 supercenters. It has a forward P/E of 20.
4. United Rentals URI has soared 57% on the year but its shares still look cheap. It trades with a forward P/E of just 15.9. The largest equipment rental company in North America is expected to see another year of double digit earnings growth next year.
Most investors have never heard of these companies yet the earnings picture looks solid. As an added bonus, there’s still value to be found.