|Bid||130.42 x 800|
|Ask||130.48 x 1100|
|Day's Range||130.14 - 130.81|
|52 Week Range||108.43 - 132.10|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||0.38%|
|Beta (5Y Monthly)||1.03|
|Expense Ratio (net)||0.18%|
With growth stocks supporting the market to start 2020 an with some taking on increasing prominence in the S&P 500, it's not surprising that the growth factor is outpacing its value. For investors looking to bet on a value resurgence, the iShares MSCI USA Value Factor ETF (CBOE:VLUE) is one popular way for investors to track the value style. VLUE follows the performance of U.S. large- and mid-capitalization stocks with value characteristics and relatively lower valuations.
After a stellar year, the SPDR S&P 500 ETF (SPY) continued to strengthen in 2020 and is already up 3.1% so far, breaking out with six new all-time highs in the first 12 trading days. Despite the strong gains, many investors still remain bullish on the equity market outlook. According to the survey, 76% of wealthy investors place a high grade on the U.S. economy, and there has been a 16% jump among investors whom expect the market to rise by as much as 5% this quarter.
The past five years have not been good for buyers of value stocks. The iShares S&P 500 Growth ETF (NYSEARCA:IVW) delivered a return of more than 70% between 2015 and 2019 compared to a 41% return for the iShares S&P 500 Value ETF (NYSEARCA:IVE).Overall, value stocks have been underperforming their growth brethren since at least 2007.InvestorPlace - Stock Market News, Stock Advice & Trading Tips"The narrative that actually explains the performance is that value has been getting cheaper and cheaper. It's gone from trading at about one-third the valuation multiples of growth stocks to roughly one-eighth the valuation multiple," Research Affiliates chairman Rob Arnott told CNBC in December.Arnott went on to suggest that if the economy slows down at some point in 2020, growth stocks will have nowhere to hide -- leaving value stocks to attract the lion's share of the buyers. * The Top 5 Dow Jones Stocks to Buy for 2020 To find my 10 value stocks to own in 2020, I will recommend one stock from the top-10 holdings of the iShares Russell 1000 Value ETF (NYSEARCA:IWD), a second stock from the 11th-largest weighting through the 20th, a third stock from the 21st-largest weighting through the 30th and so on, up to the 100th-largest stock.To make things even more diversified, I'll make sure my picks represent at least nine different sectors.May the best value stocks win! Value Stocks to Own in 2020: Comcast (CMCSA)Source: Ken Wolter / Shutterstock.com My first selection is Comcast (NASDAQ:CMCSA), the cable company that's transformed itself into a massive creator of television and movie content in recent years.Over the past 52 weeks, CMCSA stock has delivered a total return to shareholders of about 33% -- more than six percent greater returns over the same period. Trading at 14.4 times its forward earnings and 2 times sales, Comcast is a good value stock to own if you believe people will continue to watch television and movies.In 2020, look for Comcast to bring out its Peacock video streaming service to compete with the plethora of other services already out there."The upcoming streaming service will cost Comcast $2 billion in investments. Management expects costs peaking at 1% of Comcast's revenue, but that the service will achieve breakeven by the fifth year," InvestorPlace's Chris Lau stated in late December.Add in its legacy cable business, along with Universal Parks and Resorts, and you've got the makings of a great long-term hold. Activision Blizzard (ATVI)Source: Casimiro PT / Shutterstock.com My second selection also comes from the communication sector. With nine sectors to choose from, I had to double up somewhere.Having read an article about the 7 Reasons Why Video Gaming Will Take Over, choosing Activision Blizzard (NASDAQ:ATVI), one of the world's leading video game publishers, seemed to be the right call.Over the past year, ATVI stock delivered a decent total return of about 28% -- comparable to the markets total return of nearly 27%. I'm confident it can do a whole lot better. Trading at 25.5 times its forward earnings and 6.8 times sales, it's not exactly cheap. However, given the potential of gaming and esports over the next decade, you have to pay up for potential growth.My InvestorPlace colleague, Luke Lango, recently called ATVI, one of the 15 best stocks own in 2020. He believes the introduction of the first new video game consoles since 2013 is a big reason to get on board. * 7 Earnings Reports to Watch Next Week In December, I doubted ATVI could get to $80 in 2020. My colleague's comments, however, have me questioning my original thoughts. In either case, this value stock is a long-term buy to hold for years to come. McDonald's (MCD)Source: 8th.creator / Shutterstock.com Next up from the value stocks camp are consumer discretionary stocks.Although it lost $4 billion in market capitalization in a single November day when McDonald's (NYSE:MCD) CEO Steve Easterbrook was fired for having a relationship with an employee, it's managed to claw back some of those losses in the two months since.Over the past 52 weeks, MCD stock -- thanks in part to Easterbrook's dismissal -- delivered a less-than-stellar total return of 20.2%, underperforming the markets by a considerable amount.Trading at 25 times its forward earnings and 7.8 times sales, it's priced like it's the best restaurant stock on the planet. It can't afford to go into a sales funk in 2020, or investors could see MCD stock trading under $200 for an extended period.Nonetheless, as InvestorPlace's Josh Enomoto said about the Golden Arches recently:"McDonald's is a proud member of the dividend aristocrats. It has increased its payout consistently over a 43-year period. If a downturn were to impact the markets, MCD stock is a name you'll want to own."I couldn't agree more. Coca-Cola (KO)Source: Fotazdymak / Shutterstock.com If I could only own two stocks in a recession, McDonald's and Coca-Cola (NYSE:KO) would be about as good a one-two punch as I can think of.Sure, Coca-Cola's struggled mightily in recent years to remain relevant in a world that's moved on from the company's syrupy drinks. But CEO James Quincey has made some big moves to make sure it stays a major player in the world of non-alcoholic beverages.Trading at 24.8 times its forward earnings and 7.3 times sales, it's neither cheap nor expensive -- but it is what I would term as fairly valued with room for growth. * Breakthrough Stocks: The Companies Set for Major Gains in 2020 However, as I said in September, in addition to the company's great products, it's got some equity investments that are likely to take off in 2020. Add to it a 2.8% yield, and you've got a value stock to stick in a drawer if there ever were one. Phillips 66 (PSX)Source: Jonathan Weiss / Shutterstock.com The thought of owning fossil fuel-related stocks in an era of renewable energy might seem pointless. But until we can turn off the oil switch, there still is a place in your portfolio for a company like Phillips 66 (NYSE:PSX).It's a quadruple threat with pipelines, refineries, chemicals business and gas stations.InvestorPlace's Aaron Levitt recently called PSX a value stock that generates real cash flows from its diversified business model. When it comes to energy stocks, Levitt knows his stuff. If he likes Phillips, I have to go along with him.Currently, PSX stock is trading at 10.1 times its forward earnings and just 0.4 times sales. So, if I have to own an energy stock, this is one of the few I'd be comfortable holding despite the fact it underperformed the markets over the past year.Furthermore, it might not be Warren Buffett's favorite stock -- that honor goes to Apple (NASDAQ:AAPL) -- but he still owns around $535 million or 1.2% of the company. Berkshire Hathaway (BRK.A, BRK.B)Source: Jonathan Weiss / Shutterstock.com JPMorgan (NYSE:JPM) just reported the most profitable year for a U.S. bank in history. It was so good, President Donald Trump was asking for thank you's from the company. Further, analysts are starting to come around about bank stocks in 2020.So, why recommend Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) as my pick for the financial sector?For one, Berkshire's top-10 holdings include a lot of banks; A total of $67 billion to be exact. Secondly, BRK is ready for a breakout year. Over the past year, it's managed a total return of just 16%. This is well below the 28% return for the entire U.S. market. Trading at only 19.3 times its forward earnings and 2.2 times sales, it isn't overvalued relative to its peers. * 7 Financial ETFs to Buy Besides, it's a great way to play Apple indirectly and another great value stock. Anthem (ANTM)Source: Jonathan Weiss / Shutterstock.com In November 2018, I recommended Anthem (NYSE:ANTM) stock to readers, arguing that CEO Gail Boudreaux was one of seven women whose companies were worth an investment. Since then, the provider of medical benefits to more than 40 million Americans in 14 states through Blue Cross Blue Shield has underperformed the markets as a whole.However, the same can be said for UnitedHealth Group (NYSE:UNH), another big provider of healthcare plans. Over the past year, Anthem and UnitedHealth have nearly identical annualized total returns around 17%.It's not a coincidence that since President Donald Trump has taken office, companies like Anthem and UnitedHealth have underperformed the markets. The White House is intent on dismantling Obamacare. And in the end, while this might be good for Anthem, the uncertainty scares away investors. Trading at 13.5 times its forward earnings and 0.8 times sales, ANTM stock is considerably cheaper than UNH. While I like them both, Anthem is the value play of the two. Caterpillar (CAT)Source: Shutterstock Of the 100 top stocks in IVE, 12 are industrials -- including Caterpillar (NYSE:CAT). Except for General Electric (NYSE:GE), which had an excellent rebound year in 2019, performances for the sector weren't anything to write about. CAT's one-year return was half the market as a whole.A few of my InvestorPlace colleagues appear positive about the year ahead for the world's largest manufacturer of heavy equipment; And why not. With a 16% global market share, it still has a big part to play in the global economy.IP contributor Larry Ramer believes several macroeconomic factors will boost CAT stock in 2020:"Caterpillar's valuation of less than 14 times analysts' average 2020 earnings per share estimate is a real bargain in this market, where so many stocks are overvalued," Ramer stated in early January. "And its 2.8% dividend yield will pay investors to wait in case the market takes a while to realize that many macro trends are moving in Caterpillar's favor." * 5 Not-So-Hot Stocks to Sell in 2020 Caterpillar's been down, but it's not out. And it is just another one of the great value stocks to add to your portfolio. Prologis (PLD)Source: rafapress / Shutterstock.com In the world of logistics real estate, Prologis (NYSE:PLD) is a giant.InvestorPlace contributor Louis Navellier, who got his reputation with growth stocks, recently recommended PLD stock amongst a group of seven real estate investment trusts."Prologis is the stock you want if you're a true believer in the world of e-commerce. It's the largest industrial real estate company in the world," Navellier stated Jan. 10. "It has facilities all around the world. And by its $56 billion market cap, you can be sure it's a major player in this sector."Having followed the exploits of Amazon (NASDAQ:AMZN) very closely in recent years, I don't see how you can't be a true believer. Retail has become an omnichannel affair, and logistics real estate is how companies like Amazon win the game.Trading at 47.9 times its forward earnings and 18.5 times sales, it's not exactly a legitimate value play.However -- as my colleague suggests -- with growth slowing around the world, Prologis' 2.3% yield ensures that your hard-earned capital will outperform inflation in 2020 and beyond. Intel (INTC)Source: canon_shooter / Shutterstock.com Of all 10 stocks on this list, I would argue that Intel (NASDAQ:INTC) is the most legitimate value play of the bunch. Not only does INTC stock trade at a ridiculously low 12.4 times its forward earnings and 3.8 times its sales, but the $14.7 billion in free cash flow (FCF) generated over the trailing 12 months results in a free cash flow yield of 5.3%. This is based on an enterprise value of $276.4 billion. By comparison, Apple's FCF yield is 4.2%, based on an enterprise value of $1.38 trillion. You can argue whether this last stat makes Apple an even better value play than Intel or not. I'll leave that for another day. Nontheless, what's hard to deny is that a company that generates as much free cash flow as Intel does should not be trading for less than $60 a share.Intel might not get the glory like Advanced Micro Devices (NASDAQ:AMD). But when it comes to financial strength, Intel wins hands down. And all of these factors make it just another member of the great value stocks.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post The 10 Best Value Stocks to Own in 2020 appeared first on InvestorPlace.
Value stock exchange traded funds that track stable fundamentals and subpar valuations have not been this cheap relative to the broader markets in years. According to Bank of America, value stocks are ...
The extended bull run saw growth and momentum-focused equities build a large lead on value-oriented equities, but that’s starting to change and more upside could be ahead for value-focused ETFs. QMA, a quantitative equity and multi-asset manager that is part of Prudential Financial’s investment management business, is expecting cheap equities relative to their value to outperform more expensive equities. “It looks like we’re going through a bubble every bit as big as the tech bubble was, every bit as big as in the global financial crisis, but it’s happening much more under the radar,” said Andrew Dyson, chairman, and CEO of QMA.
Value-oriented ETFs are beginning to pull ahead, but some investors remain skeptical of a full on rotation and attribute the sudden shift as a short-term blip. In the recent market rebound, value stocks have been outpacing the market. Big value fund managers, including those from Hillman Funds, Artisan Partners and Eaton Vance, revealed they are taking the rally in value stocks to selloff some of their best performers in exchange for those that are further out of favor, reflecting views that the market shift to value will not last, Reuters reports.
“(Value) seems to have had a precipitous resurrection following years of significant underperformance,” said Maxwell Grinacoff, a derivatives and quantitative strategist at Macro Risk Advisors. Vanguard Value ETF (VTV) : seeks to track the performance of a benchmark index that measures the investment return of large-capitalization value stocks. The fund employs an indexing investment approach designed to track the performance of the CRSP US Large Cap Value Index, a broadly diversified index predominantly made up of value stocks of large U.S. companies.
According to the latest report on exchange-traded fund (ETF) flow data from State Street Global Advisors, value was able to outdo growth during the month of June, but the former still has the advantage year-to-date. "Given that US equities were in net inflows, the size and style category was largely the same with inflows throughout," wrote Matthew Bartolini, CFA Head of SPDR Americas Research State Street Global Advisors, in the report. "Growth funds outpaced value, as flows followed returns.
Several months ago, State Street Corporation's (STT) State Street Global Advisors (SSgA), the third largest U.S. issuer of exchange-traded funds (ETFs), made its presence felt in the ongoing ETF fee battle in significant fashion. The SPDR Portfolio ETFs, which SSgA debuted in October, are a suite of 15 previously existing SPDR ETFs that now carry ultra-low fees.
Buying stocks on the cheap relative to their value and then holding them for an extended duration has been the impetus for value investing. With investing icons like Warren Buffett popularizing the strategy, it's difficult to not consider value investing as part of one's portfolio, but with the bull market still in its extended phase and investors basking in the sunlight of growth, are they ready to completely bury value? In the past five years, IVE has been lagging the broader market thanks to an environment where low interest rates have been dominant.
Value investing seek to capitalize on inefficiencies in the market and have the potential to deliver higher returns with lower volatility compared with growth and blend counterparts.
The stock market has staged an epic rally to start 2019, and leading the charge for the market has been growth stocks. Year-to-date, the S&P 500 is up 17.5%. Meanwhile, the iShares S&P 500 Growth ETF (NYSE:IVW) is up 19%, while the iShares S&P 500 Value ETF (NYSE:IVE) is up 16%. Thus, stocks are up big in 2019, and growth stocks have broadly outperformed value stocks. There are many reasons why investors have returned to the growth trade in 2019. For starters, the economy has stabilized and even improved amid healthier China-U.S. trade relations. When the economy is healthy, investors tend to pile into risk-on, growth-oriented investments. Of equal importance, the Fed reversed its stance from "hike at all costs" to "wait and see". This stance reversal has kept rates low, and low rates help support growth valuations. Also, secular growth trends in markets like cloud, data, AI and digital ads are hardly slowing.Long story short, the growth trade is not dead. Considering that the Fed projects to remain dovish, U.S.-China trade relations project to improve, and secular growth trends project to remain healthy, then the growth trade projects to remain alive and well for the remainder of 2019.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe big takeaway? Stick with growth stocks. They've led the market higher over the past several years. They are leading the market higher today. And, they will continue to lead the market higher for the foreseeable future. * 7 Strong Buy Stocks That Tick All the Boxes With that in mind, let's take a look at six growth stocks to buy for the rest of the 2019. Facebook (FB)Source: Shutterstock The Long-Term Bull Thesis: The reasons to leave the Facebook (NASDAQ:FB) ecosystem were as strong as they will ever be in 2018 amid a plethora of data privacy scandals, and the company still added users. Net takeaway? Consumers are addicted to Facebook as much as they are addicted to the internet. Consequently, users aren't going to go away any time soon. Neither will advertisers, since they follow consumers. As such, Facebook's secular digital ad growth narrative remains robust. On top of that, the company is building out a complementary growth vertical in e-commerce. Overall, then, the growth trajectory at Facebook remains healthy, meaning that FB stock will only grind higher in the long run.The 2019 Bull Thesis: One of the biggest knocks against Facebook stock over the past few years has been that the company is entirely reliant on digital advertising and that the digital ad market will eventually slow. But that narrative will change in 2019. Over the next few quarters, we will see a new e-commerce growth narrative emerge. The emergence of that narrative will do two things. One, it will ease concerns related to slowing digital ad growth rates. Two, it will pave the path for 20%-plus growth to persist for a lot longer. Both of those developments will provide tailwinds for FB stock, and consequently, shares should stay in rally mode for the rest of 2019. Chegg (CHGG)Source: Shutterstock The Long-Term Bull Thesis: Digital education is the future. It only makes sense that as information migrates online, students increasingly turn towards online learning solutions to help them learn. But, at the current moment, there is no universal connected learning platform at scale. Chegg (NASDAQ:CHGG) is in the early days of becoming that. From homework solutions to on-demand tutors to test prep, Chegg provides a variety of learning tools through its all-in-one connected learning platform. Right now, Chegg only has 3.1 million subs, out of 36 million high school and college students in the U.S. Thus, the runway for growth is quite large, giving CHGG stock compelling long term upside potential. * 7 Stocks Worth Buying When They're Down The 2019 Bull Thesis: Chegg stock just dropped big on disappointing first-quarter numbers. But those numbers will get better as the year progresses. It's tough for me to believe that the recent college cheating scandal won't create a huge boost for Chegg's business come test prep time in the back half of 2019, as parents start spending more on college test prep amid what will likely become a more intense and rigorous college admissions process. Consequently, I expect to see Chegg's numbers get a lot better as the year progresses, and this improvement should get CHGG stock back on a medium to long-term uptrend. Weibo (WB)Source: Shutterstock The Long-Term Bull Thesis: The long-term bull thesis on Weibo (NASDAQ:WB) is pretty straight forward. Weibo is China's Twitter (NYSE:TWTR). But, Weibo has more users than Twitter, and operates at higher margins than Twitter. The only thing the company doesn't do as well is monetize each individual user, and that's likely a function of maturity (Twitter is three years older than Weibo). Eventually, Weibo will monetize each user at Twitter-like levels, meaning the company will have more users, more revenue, and more profits. Naturally, that should mean a bigger market cap, too. But, Weibo currently has a market cap about half the size of Twitter. Thus, long term upside potential is compelling.The 2019 Bull Thesis: The 2019 bull thesis in Weibo stock is likewise straightforward. Nothing Weibo did in 2018 warranted the huge selloff in WB stock. The numbers broadly remained very healthy. The only things that did happen were China's economy slowed meaningfully, trade tensions escalated, and the dollar strengthened. In 2019, China's economy is improving, trade tensions have eased, and the dollar has weakened. Thus, 2018 headwinds have turned in 2019 tailwinds. Ultimately, that should spark a big rally in WB stock into the end of the year. Square (SQ)Source: Via SquareThe Long-Term Bull Thesis: We are moving from a world of cash transactions, to a world of cashless transactions, and through facilitating various brick-and-mortar and e-commerce cashless transactions, Square (NYSE:SQ) is at the heart of this pivot. The company's gross payment volume as percent of global retail sales remains tiny. They are gaining traction among larger sellers. Growth rates remain robust. Margins are marching higher. The ecosystem is expanding with things like Cash App, Online Store, and Invoices. Overall, then, all signs here indicate that Square will continue to become a bigger and bigger player in the global retail scene over the next several years. As that happens, SQ stock will head higher. * 7 Marijuana Stocks That Are Bleeding Cash The 2019 Bull Thesis: SQ stock looks like a strong "buy the dip" candidate for the back half of 2019. This stock was crushed recently on weaker-than-expected Q1 numbers. But the numbers weren't that bad, and they should improve through the balance of 2019 as the global economy stabilizes and new e-commerce initiatives provide a healthy tailwind to growth. As such, things will get better for Square over the next few months, and as they do, SQ stock will rebound in a big way. iRobot (IRBT)Source: Shutterstock The Long-Term Bull Thesis: When it comes to iRobot (NASDAQ:IRBT), the long-term bull thesis hinges on the idea that the automation wave will ultimately sweep across the entire consumer household products space. iRobot started by selling robotic vacuum cleaners. Then, they got into robotic pool cleaners and mops. Now, they are getting into robotic lawnmowers. Next, they'll dive into robotic car cleaners, window cleaners, so on and so forth. In other words, this company expands its addressable market almost every year by introducing a new consumer robotics product. This trend will persist for the next several years as consumer robotics become the household norm. Ultimately, then, iRobot will benefit from huge revenue and profit growth in a long term window.The 2019 Bull Thesis: The reason to buy IRBT stock for the rest of 2019 is because this stock is due for a major bounce-back. IRBT stock was killed in late April on poor Q1 numbers. But, poor Q1 numbers are an anomaly, not the trend. Over the next several quarters, new product launches -- including the robotic lawnmower -- will drive improved results at iRobot, and that improvement will power a huge recovery rally in IRBT stock. Growth Stocks to Buy: Canopy Growth (CGC)Source: Shutterstock The Long-Term Bull Thesis: The growth potential in the cannabis space is enormous. At scale, the cannabis market will be as large, if not larger than, the global alcoholic beverage and tobacco markets. Both of those markets measure well above $500 billion, and they've each spawned multiple $100 billion-plus companies. Who will be the $100-billion plus giant in the cannabis space? Canopy Growth (NYSE:CGC). For three reasons. One, the company is already the leader in the legal Canada market by a mile. Two, they have $4 billion on the balance sheet which they are using strategically and aggressively to extend global dominance. Three, they are positioned to dominate the U.S. market, too, with the recent acquisition of Acreage. * Why I Regret Buying Cronos Group Stock The 2019 Bull Thesis: CGC stock should breakout into the end of the year for two big reasons. One, U.S. legislation is increasingly moving towards nationwide legalization of cannabis. As we inch closer to that landmark legislation, CGC stock will creep higher, given its Acreage acquisition. Two, the Canadian cannabis market is finally starting to stabilize after early volatility amid supply shortages. With those shortages in the rear-view mirror, the market should grow steadily, Canopy's numbers should improve meaningfully, and CGC stock should rise.As of this writing, Luke Lango was long FB, CHGG, WB, SQ, IRBT, and CGC. Compare Brokers The post 6 Growth Stocks to Buy for the Rest of 2019 appeared first on InvestorPlace.
A version of this article appeared in the March 2019 issue of Morningstar ETFInvestor. The concept of value investing dates back at least as far as the 1920s, when Benjamin Graham and David Dodd first began teaching finance at Columbia University. The fundamental principles of value investing were later enshrined in the duo's classic “Security Analysis,” first published in 1934. The idea is painfully simple: Buy securities at prices below their intrinsic value and wait patiently for their market price to reflect their true worth.
The iShares S&P 500 Value ETF (IVE) , one of the largest exchange traded funds dedicated to value stocks, posted an admirable first-quarter gain of more than 11%. “Immediately after the Fed’s announcement, value stocks—the market’s cheapest—were crushed,” reports Evie Liu for Barron's. “The valuation spread between the market’s cheapest stocks and the most expensive ones has risen to the widest level in the past 70 years.