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You Can Be a Value Investor and a Bull

Tracey Ryniec
  • (0:30) - Do Value Investors Root For The Downfall of Growth Stocks?
  • (3:15) - Large Cap Value Stocks: Stock Screener Criteria
  • (6:30) - Tracey’s Top Stock Picks
  • (11:40) - Episode Roundup: KR, CNC, CAH, ALL, PFE
  •     Podcast@Zacks.com

Welcome to Episode #188 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.

Recently, she saw a tweet about value investing that piqued her interest.

It basically said that value investors spend all their time wishing that the big growth stocks would crash and then end up buying crappy small cap stocks with no future.

True or not?

It doesn’t have to be that way for value investors. Investing is not an all or nothing event.

There are no “rules” in investing.

Be a Bull, Not a Bear

Value investors don’t have to wish for the demise of the hot growth stocks in order to be successful investors.

They can still be stock market bulls and still buy value.

What do those stocks look like?

These 5 stocks are Zacks Rank #1 (Strong Buy) or #2 (Buy) stocks, which should mean rising earnings estimates.

And they have low forward P/Es and P/S ratios.

5 Large Cap Value Stocks to Buy Right Now

1.    Kroger KR is up 9% year-to-date so it’s hardly a secret stock as consumers rush out to stock up on food and toilet paper to ride out the shelter-in-place orders. But even with its recent rally, it’s still cheap with a forward P/E of 13 and a price-to-sales ratio of just 0.2.

2.    Centene Corp. CNC is up 6% year-to-date but it, too, is still cheap. The Medicaid managed care provider has a forward P/E of just 14.3. The company recently announced it would be distributing 25,000 COVID-19 tests a week at health centers.

3.    Cardinal Health CAH is supplying PPE to medical facilities, including pharmacies. Shares have fallen about 1% year-to-date after rallying over the last month. It’s still paying a dividend, currently yielding 3.7%. Cardinal Health is cheap, with a P/S ratio of just 0.10.

4.    The Allstate Corporation ALL shares are off their March lows but still down 9.5% on the year. Shares of this property insurer are dirt cheap, with a forward P/E of 9.3. It continues to pay its dividend, which currently yields 2%, but it hasn’t yet reported first quarter results.

5.    Pfizer PFE shares are down just 3% year-to-date but it remains attractive with a forward P/E of just 14. While the company suspended its share buyback program for the rest of the year, which still has $5.3 billion left on it, it continues to pay its quarterly dividend which is currently yielding 4%.  

Many of these big cap value stocks are just as hot as their growth brothers and sisters.

What else do you need to know about being a value investor and a bull?

Tune into this week’s podcast to find out.

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The Allstate Corporation (ALL) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
The Kroger Co. (KR) : Free Stock Analysis Report
Centene Corporation (CNC) : Free Stock Analysis Report
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