Value Stocks

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:

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

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Value Stocks Library Archives

Three key updates to spur your 2021 success

LINAMAR CORP. $73 remains a buy. The company (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 65.4 million; Market cap: $4.8 billion; Price-to-sales ratio: 0.8; Dividend yield: 0.9%; TSINetwork Rating: Average; www.linamar.com) makes a variety of automotive parts, including cylinder heads… Read More

Loblaw set for post-pandemic growth

Loblaw’s shares have jumped over 20% since the start of 2021 that’s because consumers continue to stock up on food and other essential products as a COVID-19 precaution. Even as governments ease pandemic restrictions, the company’s new investments in online shopping, home delivery and other… Read More

Rising rates add risk for GWO

GREAT-WEST LIFECO INC. $37 is a hold. The insurer (Toronto symbol GWO; Conservative Growth and Income Portfolios, Finance sector; shares outstanding: 927.7 million; Market cap: $34.3 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.7%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) has now completed its $4.4 billion purchase… Read More

Here are three key updates on our portfolio

MOLSON COORS BEVERAGE CO. $55 is still a hold. The company (New York symbol TAP; Aggressive Growth Portfolios, Consumer sector; Shares outstanding: 216.8 million; Market cap: $11.9 billion; Price-to-sales ratio: 0.9; Dividend suspended in March 2020; TSINetwork Rating: Average; www.molsoncoors.com) should benefit from higher beer… Read More

These foodmakers gain from reopening

The shares of Conagra and Lamb Weston have rebounded strongly from last year’s COVID-19 lows. Still, they’ve settled into a narrow range in past few weeks as consumers start to spend less on groceries as pandemic restrictions are relaxed. Still, re-opening of restaurants should help… Read More

Online sales have offset their store closures

Two of Canada’s oldest retailers—Canadian Tire and Leon’s—continue to thrive even though many of their stores remain closed due to COVID-19 lockdowns. Their success reflects their strong online sales, which will likely remain strong even after bricks-and-mortar stores re-open.
CANADIAN TIRE CORP. (class A) is a.. Read More

Use these updates to enhance your returns

NEWELL BRANDS INC. $28 remains a hold. The company (Nasdaq symbol NWL; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 425.3 million; Market cap: $11.9 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.3%; TSINetwork Rating: Average; www.newellbrands.com) recently completed its plan to narrow its focus to the… Read More

Electric cars will push Linamar higher

Linamar’s shares are now up over 200% from their low of $24.57 on March 23, 2020. That reflect rising demand for new cars following COVID-19 lockdowns. Even after that big gain, the stock is poised to keep moving higher, particularly as Linamar’s expertise helps automakers… Read More

Stay-at-home trend boosts Loblaw

LOBLAW COMPANIES LTD. $71 is a buy. The company (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 352.9 million; Market cap: $25.1 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.loblaw.ca) operates 1,098 supermarkets under several banners, including Loblaws, Zehrs,… Read More

Big rebound for Amex

AMERICAN EXPRESS CO. $153 is a buy. The company (New York symbol AXP, Conservative Growth Portfolio, Finance sector; Shares outstanding: 805.6 million; Market cap: $123.3 billion; Price-to-sales ratio: 3.7; Dividend yield: 1.1%; TSINetwork Rating: Average; www.americanexpress.com) was once best known for its travellers cheques and travel-related services. Today,… Read More

Reopening economy will push Amex higher

American Express fell to $67 in March 2020 but has since soared back on expectations the rollout of COVID-19 vaccines will spur vacation and entertainment spending. The company will also continue to benefit as more people shop online. What’s more, its focus on affluent clients… Read More