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.

How successful investors get that way

Learn everything you need to know in this FREE Special Report from The Successful Investor.
How to Invest in stocks guide: Find 10 factors that make your investments safer and stronger.

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Value Stocks Library Archives

Here are three key updates for your portfolio: Briggs & Stratton Corp., Lamb Weston Holdings Inc. and Alliant Energy Corp.

BRIGGS & STRATTON CORP. $2.28 is still a hold. The company (New York symbol BGG; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 42.5 million; Market cap: $96.9 million; Price-to-sales ratio: 0.1; Dividend suspended in March 2020; TSINetwork Rating: Extra Risk; makes lawnmower engines, portable power… Read More

New stores are set to bolster your returns

Despite the problems that most brick-and-mortar retailers face, Canadian Tire continues to thrive for its investors. That’s partly because the company has successfully diversified beyond its main stores. What’s more, a new plan to improve its efficiency will free up cash for new investments in… Read More

Lower costs will spur investor value

ANDREW PELLER LTD. (A shares) is still a buy. The company (Toronto symbols ADW.A $7.98 and ADW.B $8.00; Income Portfolio, Consumer sector; Shares outstanding: 44.2 million; Market cap: $352.7 million; Price-to-sales ratio: 0.9; Dividend yield: 1.8%; is Canada’s second-largest wine producer, after Arterra Wines.
In its fiscal 2020 third quarter, ended… Read More

Cisco offers you tech growth plus income

Cisco Systems remains a great choice for investors seeking a strong combination of growth, value and dividends.
As a leading provider of equipment that handles increasingly large volumes of Internet data, the company is now shifting into related fields like software. It expects to get half… Read More

Keep holding them for your future gains: Boeing Co., Nordstrom Inc. and Idexx Laboratories Inc.

BOEING CO. $306 remains a hold for investors. The aircraft maker (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares o/s: 563.2 million; Market cap: $172.3 billion; Price-to-sales ratio: 2.3; Dividend yield: 2.6%; TSINetwork Rating: Above Average; recently told investors that it would suspend… Read More

Canon investors need patience

CANON INC. ADRs $25 is still worth holding. The company (New York symbol CAJ; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs o/s: 1.1 billion; Market cap: $27.5 billion; P.S. ratio: 1.0; Divd. yield: 5.2%; TSINetwork Rating: Above Average; is a leader in printers, copiers and other… Read More

Use these ADRs to tap foreign growth

American Depositary Receipts (ADRs) are certificates held by a designated U.S. bank and representing a stock that trades on a foreign exchange. ADRs make its easier for investors to hold some of the world’s biggest companies such as Japan’s Toyota, Honda and Canon (see box)… Read More

Newell’s new focus should pay off

NEWELL BRANDS INC. $17 remains a hold. The company (Nasdaq symbol NWL; Income Portfolio, Consumer sector; Shares outstanding: 423.4 million; Market cap: $7.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 5.4%; TSINetwork Rating: Average; recently completed a plan to fuel long-term gains for investors by narrowing its focus… Read More

There’s more beyond your 187% gain

We often remind our readers that spinoffs are a great way for companies to unlock hidden value. A good example is eBay’s move in 2015 to set up its payment-processing business, PayPal, as a separate company.
That spinoff has worked out very well for PayPal shareholders,… Read More

Activists are good news for investors

TEGNA INC. $17 is still a buy. The company (New York symbol TGNA, Conservative Growth Portfolio, Consumer sector: Shares o/s: 216.9 million; Market cap: $3.7 billion; Price-to-sales ratio: 1.7; Divd. yield: 1.6%; TSINetwork Rating: Average; owns 62 TV and four radio stations in 51 markets. It also… Read More

Turbocharge your portfolio with these techs: Microsoft Corp., International Business Machines Corp., Intel Corp., Texas Instruments Inc., Adobe Inc. and NortonLifeLock Inc.

Sticking with technology’s market leaders won’t hurt your returns. Indeed, as dominant players in their fields, they generate plenty of cash flow to keep launching new products and fuel more gains for investors. Our subscribers saw that play out last year with gains of up… Read More

Access this higher-value cannabis market

Investors will benefit from Molson Coors’s plan to transform its business in the face of weaker demand for beer from baby boomers and millennials. Central to that strategy is a joint venture focused on producing cannabis-infused drinks. Despite Molson’s recent writedown of that cannabis investment,… Read More

Ford gives you a cheap way to gain from EVs

Carmakers continue to face long-term challenges. That includes slowing demand from millennials for new cars and the general shift away from gasoline-powered vehicles.
However, top automaker Ford is in a strong position to overcome those obstacles and fuel gains for its investors. The company is investing… Read More

Transcontinental will cut your risk

TRANSCONTINENTAL INC. $13 remains a buy. The company (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 87.3 million; Market cap: $1.1 billion; Price-to-sales ratio: 0.7; Dividend yield: 6.8%; TSINetwork Rating: Average; is Canada’s leading commercial printer. It also makes plastic packaging for consumer and industrial… Read More