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

Dividend hike is a sign of confidence

FINNING INTERNATIONAL INC. $33 is a buy. The company (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 156.2 million; Market cap: $5.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.finning.com) continues to benefit as the re-opening of the world’s economies… Read More

Higher costs offset re-opening gains

MOLSON COORS CANADA INC. remains a hold. The company (Toronto symbols TPX.A $66 and TPX.B $72; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 216.7 million; Market cap: $15.6 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.7%; TSINetwork Rating: Average; www.molsoncoors.com) is the world’s fifth-largest beer brewer. Its… Read More

IGM writes down Wealthsimple

IGM FINANCIAL INC. $36 is a buy. The company (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 239.7 million; Market cap: $8.6 billion; Price-to-sales ratio: 2.5; Dividend yield: 6.3%; TSINetwork Rating: Above Average; www.igmfinancial.com) is Canada’s largest independent mutual-fund provider. Power Corp. owns 61.9% of the… Read More

Three more updates you need to know

NORDSTROM INC. $26 remains a hold. The company (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 157.8 million; Market cap: $4.1 billion; Price-to-sales ratio: 0.3; Dividend suspended in March 2020; TSINetwork Rating: Extra Risk; www.nordstrom.com) owns and operates over 350 stores in the U.S. and… Read More

Three key updates to spur your success

SAPUTO INC. $30 is a hold. The company (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 414.4 million; Market cap: $12.4 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.4%; TSINetwork Rating: Average; www.saputo.com) is Canada’s largest producer of dairy products. It also operates dairies in the U.S.,… Read More

Big banks go shopping as economy recovers

Canada’s top banks continue to rebound from their pandemic lows, as an expected surge in loan writeoffs failed to materialize. The recent increase in the Bank of Canada’s benchmark lending rate, as well as more hikes likely this year, will also lift their earnings. What’s… Read More

Scotiabank’s focus is set to pay off

Shares of Bank of Nova Scotia continue to rebound as the economy recovers from the COVID-19 pandemic. Still, they have lagged the gains of Canada’s other four big banks (see page 43).
That’s mainly because Bank of Nova Scotia has shifted its international focus in the… Read More

Broadridge has a bright future

BROADRIDGE FINANCIAL SOLUTIONS INC. $151 is a buy. The company (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares o/s: 116.8 million; Market cap: $17.6 billion; Price-to-sales ratio: 3.2; Divd. yield: 1.7%; TSINetwork Rating: Average; www.broadridge.com) serves the investment industry in three main areas: investor communications, securities… Read More

Keep holding these high-quality techs

On November 1, 2015, the old Hewlett-Packard Co. split into two firms—Hewlett-Packard Enterprise and HP Inc. For every share they held in the old HP, shareholders received one share in each of the new companies.
HP is now up over 200% since the separation, while HP… Read More

Use our updates to enhance your portfolio

ANDREW PELLER LTD. (A shares) is still a buy. The company (Toronto symbols ADW.A $7.33 and ADW.B $9.64; Income Portfolio, Consumer sector; Shares o/s: 43.1 million; Market cap: $315.9 million; Price-to-sales ratio: 0.9; Dividend yield: 3.4%; www.andrewpeller.com) is Canada’s second-largest wine producer after Arterra Wines.
In its fiscal 2022… Read More

Parts shortages offset spinoff benefits

GENERAL ELECTRIC CO. $93 remains a hold. The conglomerate (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $102.3 billion; Price-to-sales ratio: 1.4; Dividend yield: 0.3%; TSINetwork Rating: Average; www.ge.com) plans to break itself up into three separate companies: Healthcare… Read More

Use these updates to enhance your returns

GANNETT CO. INC. $5.31 remains a hold. The company (New York symbol GCI; Conservative-Growth Portfolio, Consumer sector: Shares outstanding: 142.3 million; Market cap: $755.6 million; Price-to-sales ratio: 0.2; Dividend suspended in 2020; TSINetwork Rating: Speculative; www.gannett.com) merged with GateHouse Media, and its parent company New Media Investment Group… Read More

Industrial stocks keep rewarding investors

These three industrial stocks have rebounded strongly from their pandemic lows as the economy re-opens. While supply-chain disruptions and rising costs for labour and shipping add risk, all three continue to reward investors with higher dividends and share buybacks. Even so, not all of them… Read More

Tegna accepts takeover bid

TEGNA INC. $22 is now a hold. The company (New York symbol TGNA, Conservative Growth Portfolio, Consumer sector: Shares outstanding: 221.3 million; Market cap: $4.9 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.7%; TSINetwork Rating: Average; www.tegna.com) owns 64 TV stations and two radio stations in 51 U.S. markets.
Tegna… Read More