5 Value Stocks Breaking Out in 2023
(0:30) - Finding Value Stocks Benefiting From Growth
(4:00) - Tracey’s Top Stock Picks
(15:10) - Episode Roundup: ABG, BZH, DAL, ARW, PLAY
Podcast@Zacks.com
Welcome to Episode #336 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.
Have you been depressed that growth stocks have rallied big in 2023 but as a value investor you’re missing out? Never fear value investors. Some value stocks have caught a bid too but you just have to know which industries to look in.
Screening for Hot Value Stocks
How do you find the top hot value stocks? Tracey screened for cheap stocks by looking for companies with P/Es under 15 and P/S ratios under 1.0. In addition, she added a Zacks Rank of #1 (Strong Buy) or #2 (Buy), both top recommendations, in order to get stocks where the analysts were raising earnings estimates.
To find the “hotness” factor, Tracey looked for stocks trading within 5% of their 52-week highs.
This screen returned 41 stocks. That’s a lot of cheap stocks that are hot with the top Zacks Ranks.
5 Value Stocks Breaking Out in 2023
1. Asbury Automotive Group (ABG)
Asbury Automotive is one of the largest auto retailers in North America. Even though earnings are expected to decline year-over-year for the auto retailers in 2023, the shares are still up 35.6% year-to-date.
Recently, shares of Asbury were at 5-year highs, up 260% over that period. That beats the S&P 500 which is up 62.6% during the same time period.
Asbury is cheap, with a P/S ratio of 0.4. It’s a Zacks Rank #2 (Buy).
Asbury is expected to report earnings on July 25. Should you buy before the earnings report?
2. Beazer Homes USA, Inc. (BZH)
Beazer Homes is a large US homebuilder. Shares of Beazer Homes have been on a tear this year and are up 117.6% year-to-date. It’s also at 5-year highs, up 83.3% during that time.
After this huge rally, some are worried about “valuation” with the homebuilders. But Beazer Homes trades with a forward P/E of just 7.3.
Should you buy Beazer Homes ahead of its July 27, 2023 earnings report?
3. Delta Air Lines, Inc. (DAL)
Delta Air Lines, one of the largest United States airlines, continues to report stronger-than-expected demand now that the pandemic has receded. What recession? Shares are up 48.2% year-to-date and are near new 52-week highs.
Delta Air Lines is still cheap. It has a forward P/E of just 7.3. It’s a Zacks Rank #2 (Buy).
Is there still time to buy Delta Air Lines?
4. Arrow Electronics, Inc. (ARW)
Arrow Electronics provides technology solutions. It’s not a small company. In 2022, Arrow Electronics had sales of $37 billion.
Shares of Arrow Electronics are up 35.3% year-to-date and are trading near a 52-week high. It’s still cheap, with a P/S ratio of just 0.2. It will report earnings again in early Aug 2023.
If you are looking for a cheap technology stock, should Arrow Electronics be on your short list?
5. Dave & Buster’s Entertainment, Inc. (PLAY)
Dave & Buster’s shares have caught a bid in 2023. Shares are up 30.9% year-to-date and are trading at new 52-week highs.
Dave & Buster’s is still cheap with a P/S ratio of just 0.9. Remember, a P/S ratio under 1.0 means a company is undervalued. It’s got a Zacks Rank of #1 (Strong Buy).
Does Dave & Buster’s have more gas left in the tank?
What Else Should You Know about the Red-Hot Cheap Stocks?
Tune into this week’s podcast to find out.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
Arrow Electronics, Inc. (ARW) : Free Stock Analysis Report
Beazer Homes USA, Inc. (BZH) : Free Stock Analysis Report
Asbury Automotive Group, Inc. (ABG) : Free Stock Analysis Report
Dave & Buster's Entertainment, Inc. (PLAY) : Free Stock Analysis Report
