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

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; www.boeing.com) 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; www.tctranscontinental.com) 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; www.finning.com) sells and services Caterpillar-brand heavy equipment in Western Canada, South… Read More

Vaccine hopes are fueling these gains

CEDAR FAIR L.P. $39 is still a hold. The partnership (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 56.7 million; Market cap: $2.2 billion; Price-to-sales ratio: 5.4; Dividend suspended in June 2020; TSINetwork Rating: Average; www.cedarfair.com) owns 11 amusement parks and four water parks. It also… Read More

A savvy acquisition for Wajax investors

WAJAX CORP. $18.02 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (www.wajax.ca; Shares o/s: 20.0 million; Market cap: $360.4 million; Divd. yield: 5.6%) has bought Calgary-based Tundra Process Solutions for $99.1 million. Tundra provides maintenance and technical services to customers in the Western Canadian midstream oil and gas, oil… Read More

GE settlement cuts your uncertainty

GENERAL ELECTRIC CO. $11 is still a hold. The company (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 8.75 billion; Market cap: $96.3 billion; Price-to-sales ratio: 1.1; Dividend yield: 0.4%; TSINetwork Rating: Average; www.ge.com) has three main businesses: aviation (jet engines and aircraft… Read More

Online boosts winemaker’s sales

ANDREW PELLER LTD. (A shares) is still a buy. The company (Toronto symbols ADW.A $11 and ADW.B $11; Income Portfolio, Consumer sector; Shares outstanding: 43.7 million; Market cap: $480.7 million; Price-to-sales ratio: 1.2; Dividend yield: 2.0%; www.andrewpeller.com) is Canada’s second-largest wine producer, after Arterra Wines.
For the fiscal 2021… Read More

EVs will pay off for Ford investors

FORD MOTOR CO. $9.08 is a hold. The automaker (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 3.9 billion; Market cap: $35.4 billion; Price-to-sales ratio: 0.3; Dividend suspended in March 2020; TSINetwork Rating: Extra Risk; www.ford.com) plans to spend $11.5 billion through 2022… Read More

Niche markets set these leaders apart

The Finance sector offers investors a wide variety of stocks beyond banks. The best of these, such as the three we recommend below, are leaders in their niche businesses. Their strong market positions help them weather shocks like the COVID-19 pandemic to bounce back even… Read More

Re-opened car plants spur Linamar

LINAMAR CORP. $56 remains a buy. The company (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 65.4 million; Market cap: $3.7 billion; Price-to-sales ratio: 0.6; Dividend yield: 0.5%; TSINetwork Rating: Average; www.linamar.com) makes a variety of automotive parts, including cylinder heads… Read More

Here are key updates on your holdings

ENBRIDGE INC. $40 is a buy. The company (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 2.0 billion; Market cap: $80.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 8.1%; TSINetwork Rating: Above Average; www.enbridge.com) operates pipelines that pump oil and natural gas… Read More