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

Its lower costs set you up for future gains

MOLSON COORS CANADA INC. (Toronto symbols TPX.A $81 and TPX.B $76; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 216.4 million; Market cap: $16.4 billion; Price-to-sales ratio: 0.6;- Dividend yield: 4.0%; TSINetwork Rating: Average; is the world’s fifth-largest largest brewer of beer by market cap. Its top brands… Read More

Loblaw lets you tap healthier profits

LOBLAW COMPANIES LTD., $74, is a buy. The company (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 369.1 million; Market cap: $27.3 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.7%; TSINetwork Rating: Above Average; is re-vamping its “No Name” packaged foods. The supermarket chain launched that… Read More

Auto-related stocks: 1 buy & 1 hold

Demand for new cars continues to slow. That’s good news for both Genuine Parts and Snap-On, whose products and services help drivers extend the life of their existing vehicles. Even so, we feel Genuine’s wider variety of businesses give it a slight edge over Snap-On,… Read More

Merger set to enhance this top pick

UNITED TECHNOLOGIES CORP. $137 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 862.8 million; Market cap: $118.2 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.1%; TSINetwork Rating: Above Average; is merging with Raytheon Co. (New York symbol RTN), a leading maker of… Read More

These market leaders cut your tech risk

The five tech stocks covered here operate in highly cyclical fields. That makes them vulnerable to a slowing global economy. However, each is a leader in its market. That gives them the financial strength to adapt to rapid changes posing a threat their dominance. We… Read More

These two top retailers continue to adapt

Here are two Canadian retailers with an established track record of adapting to new competitors and fast-changing consumer tastes. Their flexibility includes making strategic acquisitions, which adds risk. Still, their new operations have already begun to fuel their long-term earnings.
CANADIAN TIRE CORP. (Toronto symbols CTC… Read More

Updating Molson Coors Brewing Co., Newell Brands Inc. and Agilent Technologies Inc.

MOLSON COORS BREWING CO. $51 (New York symbol TAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 216.2 million; Market cap: $11.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.5%; TSINetwork Rating: Average; recently formed an alliance with Canadian cannabis producer HEXO Corp. (Toronto symbol HEXO). Molson now… Read More

Briggs’ yield still high following cut

BRIGGS & STRATTON CORP. $4.07 (New York symbol BGG; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 42.1 million; Market cap: $171.3 million; Price-to-sales ratio: 0.1; Dividend yield: 4.9%; TSINetwork Rating: Above Average; makes lawnmower engines, portable power generators, pressure washers, and snowblowers and throwers.
For… Read More

These automakers still have long-term appeal

The global automotive industry is dealing with several long-term trends. Those include slowing sales as millennials opt for ride-sharing services instead of buying new cars, and rising tariffs that make cars more expensive.
We feel established and profitable car companies, such as the three we analyze… Read More

Buy CU for income, ATCO for value

Canadian Utilities’ high-quality assets provide it with plenty of cash flow for shareholder dividends. That cash flow also helps explain why we have recommended the stock as a top pick for income seekers since 1995.
We also like its parent company, ATCO. Investing in that firm… Read More

Cannabis spurs Molson dividend hike

MOLSON COORS CANADA INC. (Toronto symbols TPX.A $71 and TPX.B $71; Conservative Growth Payer Portfolio, Consumer sector; Shares outstanding: 216.5 million; Market cap: $15.4 billion; Dividend yield: 4.2%; Dividend Sustainability Rating: Above Average; recently formed an alliance with Canadian cannabis producer HEXO Corp. (Toronto… Read More

Tegna expands its TV audiences

TEGNA INC. $15 (New York symbol TGNA, Conservative Growth Portfolio, Consumer sector: Shares o/s: 216.4 million; Market cap: $3.2 billion; Price-to-sales ratio: 1.5; Divd. yield: 1.9%; TSINetwork Rating: Average; owns 49 TV stations and two radio stations in 41 markets. It also offers online advertising and… Read More

Updating Pengrowth Energy Corp., Home Capital Group Inc. and SNC-Lavalin Group Inc.

PENGROWTH ENERGY CORP. $0.51 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 560.0 million; Market cap: $285.6 million; Price-to-sales ratio: 0.6; Dividend suspended in January 2016; TSINetwork Rating: Speculative; has two main properties: its Lindbergh oil sands project in Alberta and its Groundbirch natural… Read More

Tariff fears ease for Linamar

LINAMAR CORP. $45 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 65.4 million; Market cap: $2.9 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.1%; TSINetwork Rating: Average; makes a variety of automotive parts, including cylinder heads, cylinder blocks, camshafts, crankshafts and rods. It… Read More

Robotics, acquisitions set to spur Stanley

STANLEY BLACK & DECKER INC. $130 (New York symbol SWK; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.5 million; Market cap: $19.7 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.0%; TSINetwork Rating: Average; is one of the world’s largest makers of hand and power tools for… Read More