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Do You Have the Guts to be a Value Investor?

Tracey Ryniec
  • (1:30) - Do You Have The Guts To Be A Value Investor?
  • (4:00) - Is Micron Still A Value Trap?
  • (7:40) - Is It Time To Buy Apple Stock?
  • (11:30) - Banking Sector On Sale: Bank OZK
  • (14:00) - Is It Time To Run From Weight Watchers?
  • (18:10) - Is Fossil Group A Good Value?
  • (23:50) - Episode Roundup: Podcast@Zacks.com

Welcome to Episode #127 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.

It’s not easy being a value investor. Value investors buy when everyone else is running away. They buy when no one cares about a company anymore. They buy when everyone else is scared.

Often, value investors have to have guts to buy. They are swimming against the tide.

There’s no screen for finding stocks you have to have guts to buy. You just know them when you see them.

These 5 stocks are all cheap. But do you have to have guts to buy them?

5 Stocks That Look Like Values: But Are They?

1.       Micron MU has a cult-like devotion among shareholders and investors on social media. Shares are down 37% in the last 6 months. The earnings are also on the decline. They’re expected to drop 34% in fiscal 2019 and another 12% in fiscal 2020. It’s a Zacks Rank #5 (Strong Sell). But they’re still cheap, with a forward P/E of just 4.5. Does it take guts to buy it here?

2.       Apple AAPL is out of favor. What has happened to the cult of Apple? It has disappeared. Now, investors are fleeing the shares. They are down 20% in the last 6 months. It has a forward P/E of just 12.9. Is Apple now a true value stock?

3.       Bank OZK OZK was once one of the hottest banks in the US. But shares crashed about 50% in 2018 after the company took a rare write-down on some real estate assets. While shares have rebounded off the recent lows, they’re still cheap. Bank OZK has a forward P/E of just 9.5. Are the worries about the banks over done?

4.       WW WTW, formerly known as Weight Watchers, has seen the momentum glory and now is in the throws of the sell off. Shares are down 65% over the last 6 months. It has a forward P/E of just 9.7 even as earnings are expected to rise 23% in 2019. The Street is fleeing this wellness company but is it misplaced?

5.       Fossil FOSL has had a rough 5 years as fears about the popularity of old-fashioned watches combined with the exploding wearables market hit the shares. After rebounding in 2018, the shares are on the downward slide again, falling 38% in the last 6 months. With a forward P/E of 11.7, there’s no doubt that they’re cheap. Do you have to have guts to buy a watch manufacturer in 2019?

What else should you know about having the guts to buy value stocks?

Listen to this week’s podcast to find out.

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Fossil Group, Inc. (FOSL) : Free Stock Analysis Report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
Weight Watchers International Inc (WTW) : Free Stock Analysis Report
Bank OZK (OZK) : Free Stock Analysis Report
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