Should You Quit Value Investing?
(0:45) - Should You Continue To Buy Like A Value Investor?
(8:10) - Finding Strong Tech Stocks On Sale: Tracey’s Top Stock Picks
(21:15) - Episode Roundup: DELL, SIMO, ZM, NTAP, IBM
Podcast@Zacks.com
Welcome to Episode #356 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.
Growth stocks are at it again. The Magnificent 7 stocks, some of the world’s largest companies, are seemingly hitting new highs nearly daily. The S&P 500, of which the Mag 7 now makes up 29%, has hit new highs 6 sessions in a row.
Meanwhile, value stocks are mostly lagging. Banks, one of the cheapest industries, rallied to end 2023 but have been quiet in 2024 despite posting solid earnings reports. Energy, another cheap sector, under performed last year and has started off 2024 with more of the same.
Should value investors quit value and dive into growth? Or should value investors seek out value stocks in the hot sectors, like technology?
Screening for Cheap Tech Stocks
Tracey did a basic screen to look for cheap value stocks. Using the Zacks.com stock screening tool, she added the Computer and Technology Sector, the Zacks Ranks of #1 (Strong Buy) and #2 (Buy), which are the top Zacks ranks, and a forward P/E of 20 or less.
This screen returned 37 stocks.
What was on the list? Many hardware technology companies, which tend to be cheaper than software.
5 Cheap Tech Stocks with High Zacks Rank
1. Dell Technologies Inc. (DELL)
Dell is a large cap tech company, with a market cap of $58.6 billion. Shares of Dell have soared 104% in the last year, but it is still cheap. It trades with a forward P/E of just 12.4.
Dell pays a dividend, yielding 1.8%. It’s a Zacks Rank #2 (Buy) stock.
After the big rally, is it too late to consider buying Dell?
2. International Business Machines Corp. (IBM)
IBM is a large cap tech company, with a market cap of $173 billion. Shares are up 23% in the last year.
IBM is trading under 20x, but it’s not that cheap at 17.7x. Investors have always liked IBM for its big dividend, currently yielding 3.8%.
IBM is a Zacks Rank #2 (Buy) stock.
Should value investors be considering IBM?
3. Silicon Motion Technology Corp. (SIMO)
Silicon Motion is a small cap, with a market cap of $2.1 billion. Shares have struggled over the last year, and are down 5% during that time.
Silicon Motion isn’t dirt cheap, with a forward P/E of 19.3. But it does pay an attractive dividend, currently yielding 3.1%. Silicon Motion is a Zacks Rank #2 (Buy).
Should Silicon Motion be on your short list?
4. Zoom Video Communications, Inc. (ZM)
Zoom Video is a big cap with a market cap of $20.5 billion. Shares have struggled over the last year, and are down 0.6% during that time.
Zoom Video is cheap, with a forward P/E of 14. It does not pay a dividend. Zoom Video is a Zacks Rank #1 (Strong Buy).
Is Zoom Video on sale in 2024?
5. NetApp, Inc. (NTAP)
NetApp is a mid-cap company with a market cap of $18.4 billion. Shares are up 33% over the last year. NetApp is still cheap, with a forward P/E of just 14.4.
NetApp also pays a dividend, currently yielding 2.3%. It’s a Zacks Rank #2 (Buy).
Should NetApp be on your watch list?
What Else Do You Need to Know About Value Investing in 2024?
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
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Dell Technologies Inc. (DELL) : Free Stock Analysis Report
NetApp, Inc. (NTAP) : Free Stock Analysis Report
Silicon Motion Technology Corporation (SIMO) : Free Stock Analysis Report
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
