- (0:40) - Cheap Zacks #1 Ranked Stocks
- (5:05) - Tracey’s Top Stock Picks
- (17:45) - Episode Roundup: SHI, HIIQ, NAVI, F, DAL
Welcome to Episode #150 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.
Zacks has a great stock ranking system called the Zacks Rank.
The top ranking is the Zacks #1 (Strong Buy) stocks. Out of the over 4,000 stocks that have a Zacks Rank, today there are just 224 stocks that are the top ranking.
Usually a stock that has a Zacks Rank #1 has rising earnings estimates.
But value investors can also combine it with value fundamentals, such as the price-to-earning ratio and the price-to-sales ratio to come up with the cheapest top Zacks Ranked stocks.
Of course, the Rank is only looking at the earnings estimates. Investors should dig deeper to find out the fundamentals of any company.
But this basic screen can provide ideas.
Screening for Top Zacks Ranked Stocks
Using the Zacks #1 Rank, plus a forward P/E under 10 and a P/S ratio under 1.0, returns just 13 stocks out of the universe of 224 #1 ranked stocks.
These are some of the cheapest from that screen.
5 Cheap #1 Rank Stocks
1. Sinopec SHI is a Chinese petrochemical company. It is the cheapest of the #1 Rank stocks. Earnings are expected to rise 8.8% in 2019 and one estimate was raised in the last week. You won’t believe it’s P/E.
2. Health Insurance Innovations HIIQ is a small-cap Florida insurance company. Year-to-date the shares have fallen 19.4% but earnings are expected to grow 50.7% this year. 4 estimates have been revised higher in the last month. It has a forward P/E of just 5.5. Healthcare insurance stocks are out of favor but could this be a buying opportunity?
3. Navient Corp. NAVI provides student loans to 12 million customers. The shares have rallied in 2019, gaining 54% but are still cheap with a forward P/E of just 0.6. Investors also get rewarded with a dividend, currently yielding 4.7%.
4. Ford F has been cheap for some time even though the shares have rallied 35% in 2019. It still sports a single digit P/E. Investors also get a dividend, which is yielding 5.7%. One estimate has been revised higher for 2019. Ford is expected to grow earnings 6.9% this year.
5. Delta DAL has already reported earnings but the analysts liked what they hear because 5 estimates have been revised higher in just the last week. Earnings are expected to grow 25% in 2019. Shares are still cheap with a forward P/E of just 9.
What else should you know about cheap stocks?
Tune into this week’s podcast to find out.
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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
Ford Motor Company (F) : Free Stock Analysis Report
SINOPEC Shangai Petrochemical Company, Ltd. (SHI) : Free Stock Analysis Report
Navient Corporation (NAVI) : Free Stock Analysis Report
Health Insurance Innovations, Inc. (HIIQ) : Free Stock Analysis Report
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