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

Big rebound for Amex

AMERICAN EXPRESS CO. $153 is a buy. The company (New York symbol AXP, Conservative Growth Portfolio, Finance sector; Shares outstanding: 805.6 million; Market cap: $123.3 billion; Price-to-sales ratio: 3.7; Dividend yield: 1.1%; TSINetwork Rating: Average; was once best known for its travellers cheques and travel-related services. Today,… Read More

Reopening economy will push Amex higher

American Express fell to $67 in March 2020 but has since soared back on expectations the rollout of COVID-19 vaccines will spur vacation and entertainment spending. The company will also continue to benefit as more people shop online. What’s more, its focus on affluent clients… Read More

Use our updates to enhance your portfolio: Restaurant Brands, Andrew Peller and Bombardier

RESTAURANT BRANDS INTERNATIONAL INC. $81 is a buy for aggressive investors. The company (Toronto symbol QSR; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 465.5 million; Market cap: $37.7 billion; Price-to-sales ratio: 5.0; Dividend yield: 3.3%; TSINetwork Rating: Average; has 27,025 fast-food outlets in over 100 countries: 18,625… Read More

Boeing hopes for turnaround in 2021

BOEING CO. $229 remains a hold. The aircraft maker (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 583.0 million; Market cap: $133.5 billion; Price-to-sales ratio: 2.3; Dividend suspended in June 2020; TSINetwork Rating: Extra Risk; has received approval from aviation regulators for… Read More

More cost savings on the way

TRANSCONTINENTAL INC. $22 is still a buy for aggressive investors. Canada’s leading commercial printer (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 87.0 million; Market cap: $1.9 billion; Price-to-sales ratio: 0.7; Dividend yield: 4.1%; TSINetwork Rating: Average; paid $1.7 billion for Chicago-based Coveris Americas in… Read More

Finning gains from lower costs

FINNING INTERNATIONAL INC. $30 is a buy. The company (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 162.1 million; Market cap: $4.9 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.7%; TSINetwork Rating: Above Average; sells and services Caterpillar-brand heavy equipment in Western Canada, South… Read More