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

EVs will pay off for Ford investors

FORD MOTOR CO. $9.08 is a hold. The automaker (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 3.9 billion; Market cap: $35.4 billion; Price-to-sales ratio: 0.3; Dividend suspended in March 2020; TSINetwork Rating: Extra Risk; www.ford.com) plans to spend $11.5 billion through 2022… Read More

Niche markets set these leaders apart

The Finance sector offers investors a wide variety of stocks beyond banks. The best of these, such as the three we recommend below, are leaders in their niche businesses. Their strong market positions help them weather shocks like the COVID-19 pandemic to bounce back even… Read More

Re-opened car plants spur Linamar

LINAMAR CORP. $56 remains a buy. The company (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 65.4 million; Market cap: $3.7 billion; Price-to-sales ratio: 0.6; Dividend yield: 0.5%; TSINetwork Rating: Average; www.linamar.com) makes a variety of automotive parts, including cylinder heads… Read More

Here are key updates on your holdings

ENBRIDGE INC. $40 is a buy. The company (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 2.0 billion; Market cap: $80.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 8.1%; TSINetwork Rating: Above Average; www.enbridge.com) operates pipelines that pump oil and natural gas… Read More

They let you gain from commodity prices

Demand for heavy equipment, such as bulldozers and backhoes, is starting to improve as prices for oil and other commodities rebound with the global economy. That should help spur profits at these two equipment dealers.
FINNING INTERNATIONAL INC. $23 remains a buy. The company (Toronto symbol… Read More

Resilient retailer adapts to COVID-19

Canadian Tire’s class A shares have rebounded strongly after falling to $67.15 in March with the first wave of COVID-19. That’s mainly because the pandemic has spurred strong demand for home improvement products and exercise equipment.
The stock is poised to go even higher, particularly… Read More

Ventilators fuel Philips’ gains

PHILIPS ELECTRONICS N.V. ADRs $47 remains a buy. The company (New York symbol PHG; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 891.0 million; Market cap: $41.9 billion; Price-to-sales ratio: 1.6; Dividend yield: 1.9%; TSINetwork Rating: Average; www.philips.com) makes industrial health-care products, including X-ray… Read More

ADM aims to get healthier

ARCHER DANIELS MIDLAND CO. $50 is a buy. The company (New York symbol ADM; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 555.5 million; Market cap: $27.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.adm.com) processes corn, wheat, soybeans, flax… Read More

Intel is poised for a big comeback

Intel’s expansion into new growth areas like 5G network infrastructure, artificial intelligence, and self-driving cars should fuel its growth for years to come.
Still, the stock has lagged the company’s main competitors, including Advanced Micro Devices and Nvidia. That’s mainly due to concerns that manufacturing delays… Read More

Diversification will spur Great-West shares

GREAT-WEST LIFECO INC. $28 is still a hold. The company (Toronto symbol GWO; Conservative Growth and Income Portfolios, Finance sector; shares outstanding: 927.7 million; Market cap: $26.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 6.3%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is Canada’s second-largest life insurer, after Manulife Financial.
Great-West along… Read More

It’s ready for second wave of COVID

CANADIAN TIRE CORP. (class A non-voting) is a buy. The retailer (Toronto symbols CTC $205 and CTC.A $141; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 60.8 million; Market cap: $8.8 billion; Price-to-sales ratio: 0.7; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.canadiantire.ca) is in a strong position to… Read More

Canada’s banks will overcome COVID-19

Canada’s Big Five banks continue to set aside large amounts for any rise in loan losses because of COVID-19’s economic impact. Regulators have also ordered the banks to freeze their dividends to preserve capital.
However, most borrowers continue to pay their loans on time. The pandemic… Read More

Cisco is prepared for more COVID tumult

COVID-19 has prompted many businesses to slow new purchases of networking equipment. However, Cisco is in strong position to profit as the economy recovers.
Moreover, as the clear leader in its industry, many businesses will likely turn to Cisco for reliable systems to handle the surge… Read More

New alliance should help Molson

MOLSON COORS BEVERAGE CO. $33 is still a hold. The company (New York symbol TAP; Aggressive Growth Portfolios, Consumer sector; Shares o/s: 216.7 million; Market cap: $7.2 billion; Price-to-sales ratio: 0.7; Dividend suspended in March 2020; TSINetwork Rating: Average; www.molsoncoors.com) has now formed a new 50/50 joint venture… Read More

Pfizer remains our top drug stock

We now see several promising opportunities emerging in the pharmaceutical drug industry, and we will probably recommend more drug stocks in the next few years. For now, we feel Pfizer offers our readers the best combination of growth and income in a pharma stock. Since… Read More

IGM’s shift will benefit investors

Mutual fund fees are under pressure from low-fee ETFs and government regulations. As a result, IGM Financial is expanding its wealth management operations. That will improve its long-term earnings given that wealth management generates higher margins than mutual fund sales.
IGM FINANCIAL INC. $32 is a.. Read More

Better cash flow cushions COVID hit

FINNING INTERNATIONAL INC. $20 remains a buy. The company (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 162.1 million; Market cap: $3.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.finning.com) sells and services Caterpillar-brand heavy equipment in Western Canada, South… Read More