Zacks.com featured highlights Corebridge, General Motors, Ford and Magna International
For Immediate Release
Chicago, IL – August 11, 2023 – Stocks in this week’s article are Corebridge Financial, Inc. CRBG, General Motors Co. GM, Ford Motor Co. F and Magna International Inc. MGA.
Pick These Low P/CF Stocks to Spruce Up Your Portfolio
Value style is considered one of the best practices when it comes to picking stocks. Value investing is essentially about selecting stocks that are fundamentally sound but have been beaten down by some external factors. Such stocks are poised to bounce back as and when investors recognize the inherent value of companies. Certainly, the value investment strategy best suits investors with a long-term horizon.
There are different valuation metrics to determine a stock’s inherent strength. Still, a random selection of a ratio cannot serve your purpose if you want a realistic assessment of a company’s financial position. For this, the Price to Cash Flow (or P/CF) ratio is one of the key metrics. Corebridge Financial, Inc., General Motors Co., Ford Motor Co. and Magna International Inc. boast low P/CF ratios.
This metric evaluates the market price of a stock relative to the amount of cash flow that the company is generating on a per-share basis – the lower the number, the better. One of the important factors that makes P/CF a highly dependable metric is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, truly diagnosing a company's financial health.
Analysts caution that a company’s earnings are subject to accounting estimates and management manipulation. However, cash flow is reliable. Net cash flow unveils how much money a company is actually generating and how effectively management is deploying the same.
Positive cash flow indicates an increase in a company’s liquid assets. It gives the company the means to settle debt, meet its expenses, reinvest in its business, endure downturns and finally pay back its shareholders. Negative cash flow implies a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.
However, solely based on the P/CF metric, an investment decision may not fetch the desired results. To identify stocks trading at a discount, you should expand your search criteria and consider the price-to-book ratio, price-to-earnings ratio and price-to-sales ratio. Adding a favorable Zacks Rank and a Value Score of A or B to your search criteria should lead to even better results as these eliminate the chance of falling into a value trap.
Here are four of the 11 stocks that qualified the screening:
Corebridge Financial, which provides retirement solutions and insurance products, sports a Zacks Rank #1 and has an expected EPS growth rate of 23.5% for three to five years. The company has a trailing four-quarter earnings surprise of 14.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Corebridge Financial’s current financial year sales and EPS suggests growth of 23% and 45.6%, respectively, from the year-ago period. Corebridge Financial has a Value Score of A. The stock has decreased 10.9% in the past year.
General Motors, which designs, builds, and sells cars, trucks, crossovers, and automobile parts globally, flaunts a Zacks Rank #1. It has an expected EPS growth rate of 9.9% for three to five years. The company has a trailing four-quarter earnings surprise of 22.6%, on average.
The Zacks Consensus Estimate for General Motors’ current financial year sales suggests growth of 9% from the year-ago period. General Motors has a Value Score of A. Shares of GM have declined 5.7% in the past year.
Ford Motor, which designs, manufactures, markets, and services a range of trucks, cars, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles globally, carries a Zacks Rank #2 and has an expected EPS growth rate of 7% for three to five years. The company has a trailing four-quarter earnings surprise of 20.1%, on average.
The Zacks Consensus Estimate for Ford Motor’s current financial year sales and EPS suggests growth of 6.6% and 9%, respectively, from the year-ago period. Ford Motor has a Value Score of A. The stock has decreased 19.6% in the past year.
Magna International, one of the world’s largest suppliers in the automotive space, carries a Zacks Rank #2. It has an expected EPS growth rate of 20.4% for three to five years. The company delivered an earnings surprise of 20% in the last reported quarter.
The Zacks Consensus Estimate for Magna International’s current financial year sales and EPS suggests growth of 12.3% and 28.1%, respectively, from the year-ago period. Magna International has a Value Score of A. Shares of MGA have declined 8.3% in the past year.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2135195/pick-these-4-low-pcf-stocks-to-spruce-up-your-portfolio
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Ford Motor Company (F) : Free Stock Analysis Report
Magna International Inc. (MGA) : Free Stock Analysis Report
General Motors Company (GM) : Free Stock Analysis Report
Corebridge Financial, Inc. (CRBG) : Free Stock Analysis Report
