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5 Top Ranked Value Stocks to Buy Now

  • (1:00) - Where Can You Find Strong Value Stocks Right Now?
  • (7:20) - Tracey’s Top Stock Picks
  • (24:15) - Episode Roundup: KBH, LEN, WGO, THO, GIII, PAG, ZEUS, MT, BG, SAFM, TM


Welcome to Episode #231 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.

With some of the major averages, like the S&P 500, hitting new all-time highs yet again, this is the time when value investors can get a bit anxious.

Is the market overvalued?

Even the old stalwarts are no longer cheap. Both the energy and financial sectors, formerly the cheapest and most ignored parts of the market, had big rallies to start 2021.

With them out of the equation, where can you find true value stocks now?

Screening for Strong Buy Value Stocks

The Zacks Rank #1 (Strong Buy) stocks are a rare bunch.

Currently, there are only 233 #1 Rank stocks out of over 4400 companies.

These are the companies that should, hopefully, have seen recent analyst estimate revisions to the upside which results in rising earnings estimates.

And that’s what we want to buy: earnings that are on the rise.

But how many of those companies are actually cheap as stocks continue to hit all-time highs?

To find the “cheap” part of the equation, you can look for companies with forward P/Es under 20 and P/S ratios under 1.0.

Running this screen, 39 companies qualified.

That’s a lot of value stocks.  

What made that list?

5 Strong Buy Value Stocks to Buy Now

1.       Winnebago Industries, Inc. WGO, the RV manufacturer, is expected to grow its earnings by 180% year-over-year. The Zacks Consensus is calling for $7.24 versus the $2.58 it made last fiscal year. Even with the pandemic easing, Americans still want to hit the open road. Shares are cheap, despite the recent rally. They trade with a forward P/E of just 11.

2.       Thor Industries THO also manufactures RVs and towables, including popular brand Airstream. Earnings are expected to double this fiscal year as sales jump another 36%. You’re still getting those sales at a discount, as it has a P/S ratio of just 0.8.

3.       G-III Apparel GIII is one of the largest apparel retailers in the country. It has focused its strategy on its 5 key brands: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld. As the economy reopens, and Americans go “out” for entertainment again, the company is seeing increased demand for dressier apparel and accessories. Earnings are expected to jump 236% this year. It’s trading with a forward P/E of just 12.3.

4.       Penske Automotive Group PAG has a solid 2020, even with the pandemic, as demand for automobiles remained high. It’s taking that momentum into 2021, as earnings are expected to jump another 12.6% this year. Even with a 1-year rally of 140%, the shares are still cheap, with a P/S ratio of just 0.3.

5.       Olympic Steel ZEUS is riding the wave of higher steel prices. Analysts expect earnings to grow a staggering 808% this year to $2.62 from a loss of $0.37 last year. Shares have soared in 2021, adding 115% year-to-date. But they’re still cheap on a P/E basis, with a forward P/E of just 11.3.

What else do you need to know about finding the cheapest Zacks #1 Rank (Strong Buy) stocks?

Tune into this week’s podcast to find out.

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Penske Automotive Group, Inc. (PAG): Free Stock Analysis Report
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Olympic Steel, Inc. (ZEUS): Free Stock Analysis Report
GIII Apparel Group, LTD. (GIII): Free Stock Analysis Report
Winnebago Industries, Inc. (WGO): Get Free Report
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