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

Japanese carmakers turn the corner

Thanks to a better supply of computer chips, controlling a variety of vehicle functions such as power steering and braking, Toyota and Honda are once again increasing their production. They are also benefitting from the low value of the Japanese yen, which makes their products… Read More

Savings fuel new buyback plan

FEDEX CORP. $176 is still a buy for long-term gains. The company (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 260.2 million; Market cap: $45.8 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.6%; TSINetwork Rating: Average; www.fedex.com) delivers packages and documents in the U.S. and 220… Read More

Top brands let them pass along higher costs

These three leading foodmakers continue to post strong sales gains, mainly because they are increasing their selling prices as they cope with higher costs for ingredients, labour and fuel.
So far, thanks to their strong brands, the higher prices have not significantly hurt their volumes. All… Read More

Here are key updates on your holdings

BANK OF NOVA SCOTIA $66 is a buy. The stock (Toronto symbol BNS; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.2 billion; Market cap: $79.2 billion; Price-to-sales ratio: 2.6; Dividend yield: 6.2%; TSINetwork Rating: Above Average; www.scotiabank.com) is down 28% since the start of 2022, mainly… Read More

Three more updates to protect your gains

GANNETT CO. INC. $1.57 remains a hold. The company (New York symbol GCI; Conservative-Growth Portfolio, Consumer sector: Shares outstanding: 146.7 million; Market cap: $230.3 million; Price-to-sales ratio: 0.1; Dividend suspended in 2020; TSINetwork Rating: Speculative; www.gannett.com) merged with GateHouse Media, and its parent company New Media Investment Group… Read More

HP adjusts outlook after sales spike

HP INC. $27 is a hold. The company (New York symbol HPQ; Manufacturing sector; Shares outstanding: 1.05 billion; Market cap: $28.4 billion; Price-to-sales ratio: 0.5; Dividend yield: 3.7%; TSINetwork Rating: Average; www.hp.com) is a leading maker of personal computers and printers.
The stock is down about 28% since the… Read More

Niche publications give it an edge

TRANSCONTINENTAL INC. $17 is still a buy for aggressive investors. The company (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 86.9 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.5; Dividend yield: 5.3%; TSINetwork Rating: Average; www.tctranscontinental.com) is Canada’s leading commercial printer. It also makes plastic packaging.
In… Read More

Two buys for a cyclical rebound

The shares of these two heavy equipment suppliers have slumped recently as investors fear a recession would hurt their earnings growth. However, both firms now get most of their revenue from servicing equipment, which cuts their reliance on new equipment sales. Their strong balance sheets… Read More

Higher rates will lift loan income

WELLS FARGO & CO. $41 remains a buy. The bank (New York symbol WFC; Income Portfolio, Finance sector; Shares outstanding: 3.8 billion; Market cap: $155.8 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.9%; TSINetwork Rating: Average; www.wellsfargo.com) is third-largest banking firm in the U.S., with total assets of $1.90… Read More

AMEX’s clients pay their bills

AMERICAN EXPRESS CO. $159 is a buy. The company (New York symbol AXP, Conservative Growth Portfolio, Finance sector; Shares outstanding: 749.8 million; Market cap: $119.2 billion; Price-to-sales ratio: 2.5; Dividend yield: 2.1%; TSINetwork Rating: Average; www.americanexpress.com) is one of the world’s largest issuers of payment cards.
Despite rising interest… Read More

Cisco has a grasp on its tech markets

In the past few years, securely connecting to the Internet has become crucial as more businesses sell goods and transfer sensitive information online. As well, more non-computer devices—like cars and household appliances—are connecting to the “Internet of Things.” It’s likely that more than 64 billion… Read More

Sales jump as chip shortages ease

LINAMAR CORP. $60 remains a buy. The company (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing sector; Shares outstanding: 63.6 million; Market cap: $3.8 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.3%; TSINetwork Rating: Average; www.linamar.com) makes a variety of automotive parts, including cylinder heads and cylinder blocks. It also… Read More