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

Here are three key updates on our portfolio

NEWMONT CORP. $55 remains a buy for long-term growth and as a hedge against inflation. The company (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 799.1 million; Market cap: $44.0 billion; Price-to-sales ratio: 3.5; Dividend yield: 2.2%; TSINetwork Rating: Average; www.newmont.com) now… Read More

Bright outlook for Cisco

CISCO SYSTEMS INC. $56 is a buy. The company (Nasdaq symbol CSCO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 4.2 billion; Market cap: $235.2 billion; Price-to-sales ratio: 4.7; Dividend yield 2.6%; TSINetwork Rating: Average; www.cisco.com) expects its revenue for its next four fiscal… Read More

New strategy will pay off for Intel

Intel, unlike rivals Advanced Micro Devices and Nvidia, prefers to make its own computer chips instead of outsourcing its designs to other manufacturers. In fact, new CEO Pat Gelsinger recently announced a new strategy under which Intel will increase its ability to make chips for… Read More

Loblaw gains from narrower focus

Loblaw’s shares have jumped 44% since the start of 2021, and recently hit a new all-time high of $92.00. That’s partly due to a reorganization in 2018 that transferred the company’s real estate business—Choice Properties REIT—to parent George Weston Ltd. The holding company owns 52.6%… Read More

GE continues its turnaround

GENERAL ELECTRIC CO. $105 is still a hold. The company (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $115.5 billion; Price-to-sales ratio: 1.5; Dividend yield: 0.3%; TSINetwork Rating: Average; www.ge.com) continues to see rising demand for… Read More

Vaccine spurs Pfizer gains

PFIZER INC. $48 is a buy. The prescription drug maker (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.6 billion; Market cap: $268.8 billion; Price-to-sales ratio: 4.8; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.pfizer.com) hit a new all-time high of… Read More

This winemaker has long-term appeal

Andrew Peller shares have dropped over 20% since May 2021 on concerns that new COVID-19 variants could lead to more lockdowns for restaurants and bars. Higher prices for packaging, labour and transportation are also hurting its profit margins. However, we feel the stock will rebound… Read More

Special dividend for Leon’s investors

LEON’S FURNITURE LTD. $24 is a buy for aggressive investors. The retailer (Toronto symbol LNF; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.3 million; Market cap: $1.9 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.7%; TSINetwork Rating: Average; www.leons.ca) sells furniture and appliances through 303 stores,… Read More

Online sales continue to surge

CANADIAN TIRE CORP. (class A) is a buy. The retailer (Toronto symbols CTC $265 and CTC.A $202; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 60.8 million; Market cap: $12.5 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.canadiantire.ca) has jumped over 60%… Read More

Three more updates you need to know

NORTONLIFELOCK INC. $25 is a buy. The company (Nasdaq symbol NLOK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 581.3 million; Market cap: $14.5 billion; Price-to-sales ratio: 5.8; Dividend yield: 2.0%; TSINetwork Rating: Average; www.nortonlifelock.com) is now in talks to buy European cybersecurity firm Avast plc… Read More

Genuine remains the better pick

Genuine Parts and Snap-On both stand to gain as COVID-19 shutdowns ease and car sales rebound. However, we feel Genuine’s businesses outside of auto parts and its wider geographic presence better protect it from possible future shutdowns.
GENUINE PARTS CO. $126 is still a buy. The… Read More

Toyota’s outlook still looks bright

TOYOTA MOTOR CO. ADRs $180 is a buy. The Japanese giant (New York symbol TM; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.4 billion; Market cap: $252.0 billion; Price-to-sales ratio: 0.1; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.toyota.com) is the world’s largest… Read More

IBM helps cut Verizon’s 5G costs

INTERNATIONAL BUSINESS MACHINES CORP. $142 is a buy. The company (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares o/s: 893.5 million; Market cap: $126.9 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.ibm.com) paid $34 billion for Red… Read More

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