For Immediate Release
Chicago, IL – May 16, 2018 - Stocks in this week’s article include: The Chemours Company CC, Boise Cascade Company BCC, Louisiana-Pacific Corporation LPX, Seagate Technology plc STX and The Meet Group, Inc. MEET.
Screen of the Week of Zacks Investment Research:
5 Ultra-Cheap PEG Stocks Value Investors Will Love
Value investing is gaining popularity by the day. The success of value investors like Warren Buffett further underscores this.
Buffett believes that proper understanding of the "intrinsic value" of a stock makes the task easier. Yardsticks such as dividend yield, the ratio of price to earnings or to book value are the most common forms of intrinsic value calculation, which can easily single out stocks that the market is currently undervaluing.
However, these ratios, while not taking into account the growth potential of a stock, may end up convincing us to invest in stocks that are at a discount just because of their poor show. This may often lead to “value traps” — a situation when these value picks start to underperform over the long run as the temporary problems, which once affected the share price, turn out to be persistent.
In such a case, even if you buy a stock at less than its fair value, you might end up paying more. And here comes the importance of this not-so-popular but crucial value investing metric, the PEG ratio.
The PEG ratio is defined as: (Price/ Earnings)/Earnings Growth Rate
A low PEG ratio is always better for value investors.
While P/E alone fails to identify a true value stock, PEG helps determine the intrinsic value of a stock.
There are some drawbacks of using the PEG ratio though. It doesn’t consider the very common situation of changing growth rates such as the forecast of the first three years at a very high growth rate followed by a sustainable but lower growth rate in the long term.
Hence, PEG-based investing can turn out to be even more rewarding if some other relevant parameters are also taken into consideration.
Here are the screening criteria for a winning strategy:And that's what we're screening for today…
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/303572/5-ultra-cheap-peg-stocks-value-investors-will-love`
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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
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Contact: Jim Giaquinto
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Seagate Technology PLC (STX) : Free Stock Analysis Report
MeetMe, Inc. (MEET) : Free Stock Analysis Report
Louisiana-Pacific Corporation (LPX) : Free Stock Analysis Report
Boise Cascade, L.L.C. (BCC) : Free Stock Analysis Report
Chemours Company (The) (CC) : Free Stock Analysis Report
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