What are value stocks?
One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.
Value stocks are stocks trading lower than their financial fundamentals suggest. They are perceived as undervalued, and have the potential to rise. Many new tech stocks, for instance, start out as growth stocks and transition into value stocks.
They have a low price-to-earnings and price-to-book ratios—which is why they’re less expensive than growth stocks. Due to this fundamental distinction, a value stock is often traded at a more affordable rate than a growth stock.
To investors, they see companies that fall into this category as undervalued. These investors are less likely to invest in a growth stock because they feel that value company’s stock will eventually reach their full potential once they are recognized by the market.
Generally speaking, the climb is steady for value stocks. The only other way for it to emerge into the market like a growth stock is for it to be a bit more innovative with its products or services.
Pat McKeough is an expert at delving into a company’s financial statements and identifying undervalued securities and value stocks. That’s because value stocks are the foundation of any long term investment strategy, at TSI Network we also recommend our three-part Successful Investor strategy:
 How Successful Investors Get RICHLearn everything you need to know in ‘The Canadian Guide on How to Invest in Stocks Successfully’ for FREE from The Successful Investor. How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger. |
LOBLAW COMPANIES LTD. $149 is a buy. Canada’s largest food seller (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 316.4 million; Market cap: $47.1 billion; Price-to-sales ratio: 0.8; Dividend yield: 1.2%; TSINetwork Rating: Above Average; www.loblaw.ca) is adding more discount-price stores as customers deal with high… Read More
TORONTO-DOMINION BANK $79 is a buy. The bank (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $142.2 billion; Price-to-sales ratio: 2.7; Dividend yield: 5.2%; TSINetwork Rating: Above Average; www.td.com) acquired artificial intelligence (AI) software specialist Layer 6 Inc. in September… Read More
LEON’S FURNITURE LTD. $22 is a buy for aggressive investors. The retailer (Toronto symbol LNF; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 68.0 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.6; Dividend yield: 3.3%; TSINetwork Rating: Average; www.leons.ca) sells furniture and appliances through 303 stores, mainly under the… Read More
STATE STREET CORP. $74 is a buy. The company (New York symbol STT; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 301.9 million; Market cap: $22.3 billion; Price-to-sales ratio: 2.0; Dividend yield: 3.7%; TSINetwork Rating: Average; www.statestreet.com) sells accounting and administrative services to operators of mutual funds and pension… Read More
ABB LTD. ADRs $48 is a buy. This Swiss-based company (Over-the-counter Pink Sheets symbol ABBNY; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs o/s: 1.8 billion; Market cap: $86.4 billion; Price-to-sales ratio: 2.7; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.abb.com) is a leading maker of electrical transformers,… Read More
GANNETT CO. INC. $2.18 is a hold. The company (New York symbol GCI; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 148.8 million; Market cap: $324.4 million; Price-to-sales ratio: 0.1; Dividend suspended in 2020; TSINetwork Rating: Speculative; www.gannett.com) publishes daily and weekly newspapers in 220 local markets in 43… Read More
GENERAL MILLS INC. $69 is a hold. This consumer staples giant (New York symbol GIS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 564.5 million; Market cap: $40.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 3.4%; www.generalmills.com) is one of the world’s largest foodmakers. Its top brands include Cheerios (cereal),… Read More
SNAP-ON INC. $292 is a hold. The company (New York symbol SNA; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 52.9 million; Market cap: $15.4 billion; Price-to-sales ratio: 3.1; Dividend yield: 2.5%; TSINetwork Rating: Average; www.snapon.com) makes tools for auto mechanics and industrial customers.
In the fourth quarter of… Read More
Governments in the U.S. and other countries are now mandating that automakers phase out production of gasoline-powered cars and trucks and shift to electric-powered vehicles (EVs). However, consumer demand for EVs remains weak due to their higher costs and concerns over their range of use… Read More
CISCO SYSTEMS INC. $50 is a buy. The company (Nasdaq symbol CSCO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 4.05 billion; Market cap: $202.5 billion; Price-to-sales ratio: 3.5; Dividend yield: 3.2%; TSINetwork Rating: Average; www.cisco.com) has now completed its acquisition of Splunk Inc. (Nasdaq symbol SPLK)… Read More
Elevated interest rates and inflation continue to force CIBC to put aside higher amounts to cover potential loan defaults. However, actual loan losses remain small. As well, it looks like interest rates will come down in 2024, which will let it reverse some of those… Read More
These two foodmakers have had to increase their selling prices in the past two years in response to rising costs for ingredients and other inputs. However, those higher prices are prompting consumers to switch to cheaper generic brands. New weight-loss drugs could also cut demand… Read More
We continue to recommend investors diversify their Finance sector holdings with non-bank stocks. Here are three stocks that dominate their niche markets and so cut your risk. What’s more, they are incorporating artificial intelligence (AI) technology to improve the performance of their products and services… Read More
Capital One Financial recently agreed to merge with Discover Financial Services. The deal, if approved, would create the largest U.S. credit card company by loan volume.
Despite the emergence of a significant new competitor, the shares of American Express rose on the news. The gain reflects… Read More
Finning’s earnings generally depend on cyclical commodities, particularly crude oil and copper. We think their prices will resume their upward direction in the next few years. Moreover, increasing government spending on infrastructure projects helps offset that cyclical risk.
FINNING INTERNATIONAL INC. $36 is a buy. The company (Toronto… Read More
MAPLE LEAF FOODS INC. $26 is a hold. The company (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 122.5 million; Market cap: $3.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 3.2%; TSINetwork Rating: Average; www.mapleleaffoods.com) opened two new processing facilities in 2022: a poultry plant in London,… Read More
Thanks to a new cost-cutting plan, Transcontinental’s shares have rebounded nearly 40% since falling to $10 in November 2023. While the company remains vulnerable to an economic slowdown, it stands to gain as inflation eases and interest rates start to decline, possibly later this year… Read More
LOBLAW COMPANIES LTD. $135 is a buy. Canada’s largest food seller (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 316.4 million; Market cap: $42.7 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.3%; TSINetwork Rating: Above Average; www.loblaw.ca) recently purchased 10 Freightliner eCascadia electric trucks, which increased… Read More
We continue to believe there’s room for most investors to hold aggressive stocks, which typically are more leveraged (with more debt) and volatile than conservative stocks.
Still, to cut your risk, you should limit aggressive stocks to no more than 20% of your total portfolio. We… Read More
HP INC. $30 is a hold. The company (New York symbol HPQ; Conservative Growth Portfolio; Manufacturing sector; Shares outstanding: 990.9 billion; Market cap: $29.7 billion; Price-to-sales ratio: 0.6; Dividend yield: 3.7%; TSINetwork Rating: Average; www.hp.com) is a leading maker of personal computers and home and office printers.
Billionaire investor… Read More
