Top 5 Cheap Stocks to Buy in Today's Uncertain Market
Finding companies with the criteria you want isn’t always easy. You could spend hours searching ticker after ticker, only to find companies which aren’t worthy of your hard earned cash. An easier way to navigate through this is by using high quality stock screeners. Screening helps investors to narrow down companies to invest in based on their ability to meet every criteria selected. Any company who misses even one of the criteria requirements will be filtered out.
This lets one easily choose ideal metrics. Screens are effective because they sift out bad stocks and only keep the cream of the crop in. It isn’t always easy to create an effective screen. Our Zacks Premium Screens have helped with this, bringing profits to many investors over time. Our predefined criterions are chosen carefully to capture special kinds of companies.
Today, we’ve dug up five special companies using one of our premium screens known as “Highly Ranked Undervalued Stocks”. Some of the metrics of this screen is that a stock must trade at a PE under 20, has to be in the top half of all ranked industries, and also has to have a value score of B, for starters. In addition to using the metrics on this great screen, I’ve added an additional metric which I feel is appropriate for today’s uncertain market.
I screened for stocks with low betas. This was done so that we can find cheap stocks which also experience lower levels of volatility than the market. Let’s see what our modified premium screen has found for us today.
Build-A-Bear Workshop-BBW
Build-A-Bear Workshop sells teddy bears and stuffed animals. The company is a Zacks Rank #1 (Strong Buy). It also lies within the top 35 industries covered by our Zacks Industry Rank, which is great because companies that are within the top half of all industries tend to significantly outperform the bottom half.
Build-A-Bear also has a Value Style Score of “B”, and rightly so. After all, the company trades at a Forward PE of just 12.7. It also has a beta of just 0.68, so expect less volatility than the market when investing in BBW shares.
Bofi Holding Inc-BOFI
Bofi is a holding company for Bank of Internet USA. The bank is a consumer focused savings bank which mainly operates through the internet. Bofi is a Zacks Rank #2 (Buy). Its industry ranks 87th out of the 265 industries ranked by Zacks.
BOFI has a Value Score of “B”. This grade isn’t disputable, as the company trades at an EV/EBITDA multiple of just 6.27. It also trades at a forward PE of just 9.84. Bofi Holding is much less sensitive to volatility compared to the market, with a beta of just 0.31.
CenturyLink Inc-CTL
CenturyLink is a worldwide communications company. The corporation holds a Zacks Rank #1 (Strong Buy). It is worth noting that the company doles out a dividend yield of 6.7%. CenturyLink’s industry is ranked among the top 39 industries. This puts Century in especially good company, as higher industries tend to outperform industries from a lower rank.
CenturyLink gets a “B” for Value in the Style Scores. This makes sense, as it trades at a price/book of just 1.22. It also trades at a forward PE of 12, making it more valuable than its peers, whose PE as a whole comes out to 13.55. CTL has a beta of 0.75, making it a relatively less volatile investment candidate.
Fidelity National Title Group Inc-FNF
Fidelity National provides insurance. It is one of the nation’s largest title insurance companies. FNF is a Zacks Rank #2 (Buy), and it has a market cap of $8.75 billion. The company’s industry ranks 70th out of all the industries covered by Zacks.
Fidelity gets an “A” for Value. The company gets this top grade because of its cheap pricing metrics across the board. The insurer trades at a price-to-book of just 1.33, and it also trades at a price-to-sales of 1.16. Fidelity has a PEG of 0.77, and it also trades at a forward PE of just 12.55. To make the deal sweeter, FNF is not as volatile as the market, with a beta of just 0.77.
JetBlue Airways-JBLU
JetBlue is a low-fare, low-cost airliner. The company flies out to over 80 destinations. JetBlue is a Zacks Rank #2 (Buy). Airliners are benefitting from low oil prices, and they currently rank 30th on our list of industries.
JBLU, like Fidelity, gets an “A” in our Value Style Score. It trades at an especially attractive forward PE of just 8.01. What makes the deal sweeter is the fact that JBLU has a PEG of 0.41. JetBlue is not very volatile at all with a beta of 0.59.
Bottom Line
When you combine a good bargain with the protection you need in a volatile 2016, successful investing is bound to come your way. Going for an aggressive growth strategy could make you lose a lot of money, so lower beta stocks look attractive, as they give you shelter when the market is volatile.
To use Zacks Premium Screens to find more stock picks based on criteria that’s most important to you— plus, gain access to the Zacks Rank for your stocks, mutual funds and ETFs; Zacks Style Scores, Equity Research Reports; Focus List portfolio of 50-longer-term stocks and more—start your 30-day free trial to Zacks Premium.
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JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
BOFI HLDG INC (BOFI): Free Stock Analysis Report
FNF GROUP (FNF): Free Stock Analysis Report
BUILD-A-BEAR WK (BBW): Free Stock Analysis Report
CENTURYLINK INC (CTL): Free Stock Analysis Report
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