U.S. Markets open in 4 hrs 38 mins

7 Incredible Value Stocks to Pick for 2019

Nilanjan Banerjee

The U.S. stock market tumbled with the Nasdaq Composite Index briefly slipping into the bear territory on Dec 20. From an all-time high of 8,109.69 touched on Aug 29, the tech-heavy benchmark lost more than 20% when it hit the intraday low price of 6,447.91 on Dec 20.

It seems that the global economy slowdown is slowly gripping the United States. The Federal Reserve’s dovish tone along withits policy setting board’s downgrade of forecasts for 2018 and 2019 U.S. gross domestic product (GDP) growth is adding to the concerns.

Global Economy Slowdown Could Shake US

China recently witnessed November 2018 retail sales growth of 8.1% from the year-ago period, per the National Bureau of Statistic. Retail sales of the world’s second-largest economy thus not only grew at the slowest pace since 2003 but also failed to beat analysts’ expectations of 8.8%, per Reuters. Notably, the November data was disappointing despite Alibaba Group generating almost $31 billion in sales on Singles’ Day.

European shares are taking a hit as Asos Plc plunged 43% on Monday. The online fashion retailer in the United Kingdom recently cut its growth forecast for sales and profit margin as the market has been flooded with high discounts.

The signs of a slowdown in the global market, as reflected in disappointing European and Chinese data, could hit the U.S. market, according to the United Services Automobile Association.

Fed’s Dovish Tone Shows Uncertainty

Despite President Trump tweeting against a rate hike, the Federal Reserve has lifted the benchmark federal-funds rate for the fourth time this year. However, the Fed is expecting two hikes in 2019 against the prior projection of three. This dovish tone can be explained by the slowdown in global economy growth.

Naturally, the policy setting board of the central bank has lowered its expectation for growth in U.S. GDP to 2.3% in 2019 from the prior expectation of 2.5%. Moreover, the Fed has cut its estimate for growth pace in U.S. GDP for 2018 to 3% from 3.1%.

Time to Bet on Value Stocks

In view of the circumstances, it seems like the right time to invest in stocks that are currently undervalued and will make good additions to your portfolio as the new year approaches.

Investors need to be cautious while picking value stocks. It is important to note that some of the stocks are deemed to be undervalued with no upside potential. Or, they may appear undervalued as per one metric, but not when judged by another. Our Value Style Score separates the wheat from the chaff by using multiple criteria to truly find the most attractive value stocks.

Hence, we have employed our proprietary Stock Screener to identify stocks with a Value Score of A along with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in London, Barclays Plc BCS is primarily involved in providing financial products and services.

Barclays has a favorable Price/Earnings to Growth (PEG) ratio of 0.35 compared with the broader industry’s 1.18. The company’s forward price/earnings (P/E) ratio of 6.86 also stands strong when compared to the industry’s 9.14.

Bausch Health Cos Inc. BHC, headquartered in Laval, Canada, is the leading manufacturer and distributer of medical devices.

The stock’s favorable PEG ratio of 0.26 is lower than the broader industry’s 1.06. The company’s P/E ratio of 5.2 is also better than the industry’s 8.3.

Based in Guelph, Canada, Canadian Solar Inc. CSIQ is involved in designing and manufacturing solar power products.

Canadian Solar has a favorable PEG ratio of 0.21 compared with the broader industry’s 0.76. The company’s P/E ratio of 6.57 also compares favorably with the industry’s 13.34.

DAQO New Energy Corp. DQ, headquartered in Wanzhou, the People's Republic of China is among the leading manufacturers of wafers and polysilicon.

The stock has a favorable PEG ratio of 0.21 compared with the broader industry’s 1.29. The company’s P/E ratio of 6.15 also stands strong when compared to the industry’s 13.88.

Headquartered in Dún Laoghaire, Ireland, Fly Leasing Limited FLY is engaged in leasing commercial aircraft. 

Fly Leasing has a favorable PEG ratio of 0.47 compared with the broader industry’s 0.71. The company’s P/E ratio of 4.73 is also better than the industry’s 9.05.

Hudson Ltd. HUD, based in Feltham, the United Kingdom, is a leading travel retail firm.

The stock’s favorable PEG ratio of 0.60 is lower than the broader industry’s 0.89. The company’s P/E ratio of 17.6 is stronger than the industry’s 17.9.

Headquartered in Clearwater, Florida, Tech Data Corporation TECD is the leading distributor of technology products in the wholesale market.

Tech Data has a favorable PEG ratio of 0.86 compared with the broader industry’s 1.27. The company’s P/E ratio of 7.49 compares favorably with the industry’s 10.43.

In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?

These 10 are painstakingly handpicked from over 4,000 companies covered by the Zacks Rank. They are our primary picks poised to outperform in the year ahead. Be among the first to see the new Zacks Top 10 Stocks >>


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
 
Fly Leasing Limited (FLY) : Free Stock Analysis Report
 
Barclays PLC (BCS) : Free Stock Analysis Report
 
DAQO New Energy Corp. (DQ) : Free Stock Analysis Report
 
Tech Data Corporation (TECD) : Free Stock Analysis Report
 
Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
 
Bausch Health Cos Inc. (BHC) : Free Stock Analysis Report
 
Hudson Ltd. (HUD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.