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Zacks Value Trader Highlights: Bassett Furniture, Beazer Homes, Westlake Chemical, Tecnoglass and ePlus Technology

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Zacks Equity Research
·5 min read
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For Immediate Release

Chicago, IL – December 4, 2020 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:

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How to Screen for Top Small-Cap Value Stocks

Welcome to Episode #215 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.

While big caps continue to dominate Wall Street, suddenly, in November 2020, the Russell 2000, the small cap index, finally broke out to new all-time highs for the first time in 2 years.

Small caps had their best month ever in November. While that included small cap growth and value stocks, value still crushed it in the month.

The Vanguard Small Cap Value ETF jumped 19% in the last month.

But even with the recent breakout, the small caps continue to underperform.

Over the past 2 years the Vanguard Small Cap Value ETF is up just 4.8% compared to the S&P 500’s 33%.

Many small cap stocks remain cheap heading into 2021.

Screening for Small Cap Value

It’s pretty easy to create a small cap value stock screen.

Small caps can be considered companies with a market cap under $2 billion, $1.5 billion or even $1 billion, depending on how narrow you want to make the screen.

For this screen, Tracey went with $1.5 billion.

Adding on the powerful Zacks Ranks of #1 (Strong Buy) or #2 (Buy) should hopefully get you companies which have rising earnings estimates. The analysts see something good going on that they are raising, instead of cutting, those full year estimates.

For the value component, you can try the basic price-to-earnings ratio under 15 but in this screen, that combination produced 164 stocks.

That’s a lot of stocks.

Adding on the price-to-sales ratio under 1.0 narrows the screen.

It produced 60 stocks.

5 Small Cap Value Stocks with High Zacks Ranks

1.       Bassett Furniture BSET is cashing in on the housing craze. In September, the company said its wholesale order rate was up 39% year-over-year. Bassett said business had “boomed” since Memorial Day. It’s still cheap with a forward P/E of 13.4.

2.       Beazer Homes BZH is a home builder with a market cap of $451 million. While earnings are expected to rise 2.1% in fiscal 2021, they’re forecast to rise another 25% in fiscal 2022. It’s dirt cheap with a forward P/E of 7.5.

3.       Westlake Chemical WLKP is a maker of petrochemicals, vinyls, polymers, and building products globally with a market cap of $747 million. It has a forward P/E of just 10.8. The shares have struggled this year and are still down 16.7% year-to-date. It’s a rare small cap company that is paying a dividend.

4.       Tecnoglass Inc. TGLS is a Colombian company that specializes in architectural glass, windows and aluminum products. Earnings are expected to rise 13% in 2020 and 22% in 2021. It’s also dirt cheap, with a forward P/E of 7.7. It, too, pays a dividend, currently yielding 1.9%.

5.       ePlus Technology PLUS provides consultative technology solutions in cloud, security and data centers. It has a market cap of $1.1 billion. In the second quarter, sales rose 5.2%. Earnings are expected to fall in fiscal 2020 by 3.3% but rise 6.3% in fiscal 2021. It’s a value, with a forward P/E of 14.2.

What else should you know about finding small cap value stocks?

Tune into this week’s podcast to find out.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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
 
Beazer Homes USA, Inc. (BZH) : Free Stock Analysis Report
 
Westlake Chemical Partners LP (WLKP) : Free Stock Analysis Report
 
Tecnoglass Inc. (TGLS) : Free Stock Analysis Report
 
ePlus inc. (PLUS) : Free Stock Analysis Report
 
Bassett Furniture Industries, Incorporated (BSET) : Free Stock Analysis Report
 
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