7 Incredible Value Stocks You Must Buy for 2016
The woes that plagued 2015 started with a drop in oil prices, and were soon followed by instability in Greece, ambiguity regarding the Federal Reserve’s rate hike, continual weakness in China, fluctuating commodity market prices and other global growth concerns. As a result, the stock market trended almost flat in 2015. With a vicious cycle of seemingly never-ending woes keeping Wall Street under pressure, the prolonged Bull Run of six years was reined in.
In spite of the overall weakness, let’s not forget that the Fed had shown enough assurance in the U.S. economy to go ahead with a decision to raise rates after almost a decade. Also, increasing employment, improving housing market and escalating inflation rates are expected to support the country’s economic growth in the near future.
Investing for 2016
The recovering U.S. economy will likely bring to light few winners across the equity universe in 2016. However, since the broader market would remain uncertain due to various external factors, investors must not put their money on typical bets without a clear roadmap. Plenty of stocks might look lucrative on the surface, but among those, many might not have enough potential to outperform the market, which is every investor’s goal. The start of a brand new year is precisely the time to make these judgments and put your portfolio on a strong footing for the times ahead.
Look for Value
In such a confusing situation, we believe investors can do well by seeking refuge in less risky stocks rather than opting for the uncertain ones. We suppose investing in value stocks could actually be a safer bet at this moment, given their inclination for steady growth and momentum in price.
Value investing offers a break for entering the market and capturing stocks that have otherwise been overlooked by a majority of investors, and are, hence, trading economical. Moreover, these stocks have low P/Es, pay decent dividends, hold solid outlooks, usually yield high returns and produce exponential gains over time.
Our Picks
Through our latest style score system, we have chosen 7 stocks that have excellent performance record and thus, might prove to be a boon for value investors.
Our Value Style Score compresses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount.
Below we have highlighted 7 incredible value stocks that are most likely to bear fruits in the year ahead. These stocks currently carry a Zacks Rank #1 (Strong Buy) or #2 (Buy), comprise a value score A and possess market capitalization of minimum $1 billion.
Renowned drug wholesaler AmerisourceBergen Corp. ABC has a Zacks Rank #2 and $21.33-billion market capitalization. The company expects that its commercial growth in fiscal 2016 would be guided by growing U.S. pharmaceutical market, improving patient access to healthcare and innovative product launches.
Premium auto dealership company Asbury Automotive Group, Inc. ABG carries a Zacks Rank #2 and has a $1.71-billion market capitalization. Increasing employment, auto credit facilities and higher per capita disposable income levels support growth scopes for the company.
Popular property, insurance and asset management company Allianz SE AZSEY sports a Zacks Rank #1 and has a market capitalization of $80.1 billion. Demand for the company’s products is steadily increasing over time.
Premium drug wholesaler Cardinal Health, Inc. CAH has a Zacks Rank #2 and $29.37-billion market capitalization. Fiscal 2016 promises to be a good year for the company led by its strengthening product portfolio. Moreover, Cardinal Health is banking on strategic buyouts, joint ventures and supply agreements to ride on the growth trajectory.
Famous airlines company Delta Air Lines, Inc. DAL carries a Zacks Rank #1 and has a $39.87-billion market capitalization. Continuous route expansion, coupled with increased value-added services, is expected to stimulate the company’s commercial growth, going forward.
Premium credit service provider Discover Financial Services DFS has a Zacks Rank #2 and $22.92-billion market capitalization. Extensive student loan portfolio, prudent capital management, global expansion and increased card sales remain long-term growth drivers for the company.
Prominent auto manufacturer General Motors Company GM, with a Zacks Rank #2, has a $52.88-billion market capitalization. Strategic portfolio restructuring actions and new acquisitions are anticipated to aid the company’s growth, going ahead.
Bottom Line
Keeping in mind the existing economic fundamentals, investors should play safe by adopting a risk-averse attitude. By investing in value stocks like those mentioned above, investors can earn steady income and witness regular earnings growth that would, most likely, lead to capital appreciation as well.
So, look ahead and invest in these hidden gems unearthed by the Zacks style score system to support your investment plans for 2016.
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DISCOVER FIN SV (DFS): Free Stock Analysis Report
CARDINAL HEALTH (CAH): Free Stock Analysis Report
AMERISOURCEBRGN (ABC): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
ALLIANZ AG-ADR (AZSEY): Free Stock Analysis Report
ASBURY AUTO GRP (ABG): Free Stock Analysis Report
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