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:
 How Successful Investors Get RICHLearn everything you need to know in ‘The Canadian Guide on How to Invest in Stocks Successfully’ for FREE from The Successful Investor. How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger. |
Loblaw has come under fire from politicians accusing it of generating excessive profits during the pandemic. However, the company’s profit margins are only up slightly compared to pre-pandemic levels. Meantime, ongoing investments in online ordering, loyalty plans and private label brands should continue to fuel… Read More
COLLIERS INTERNATIONAL GROUP INC. $157 is a buy for aggressive investors. This company (Toronto symbol CIGI; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 41.8 million; Market cap: $6.6 billion; Price-to-sales ratio: 1.1; Dividend yield: 0.3%; TSINetwork Rating: Extra Risk; www.colliers.com) offers a range of services, including… Read More
HOME CAPITAL GROUP INC. $41 is a hold. The company (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 42.6 million; Market cap: $1.7 billion; Price-to-sales ratio: 3.5; Dividend yield: 1.5%; TSINetwork Rating: Speculative; www.homecapital.com) is a mortgage lender serving borrowers who fail to meet the stricter… Read More
KRAFT HEINZ CO. $40 is a buy. The company (Nasdaq symbol KHC; Income Portfolio, Consumer sector; Shares outstanding: 1.2 billion; Market cap: $48.0 billion; Price-to-sales ratio: 1.9; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.kraftheinzcompany.com) is a leading producer of processed foods. Its top brands include Velveeta and… Read More
T. ROWE PRICE GROUP INC. $112 is a buy. The mutual fund seller’s (Nasdaq symbol TROW; Aggressive Growth and Income Portfolios, Finance sector; Shares outstanding: 224.4 million; Market cap: $25.1 billion; Price-to-sales ratio: 4.2; Dividend yield: 4.4%; TSINetwork Rating: Average; www.troweprice.com) assets under management declined 24.5% in 2022… Read More
Rising interest rates and inflation are forcing these banks to set aside more funds to cover potential bad loans. However, tougher lending standards introduced since the 2008 financial crisis will keep any losses low compared to the banks’ overall loan portfolios.
J.P. MORGAN CHASE & CO… Read More
FORD MOTOR CO. $12 is still a hold. The automaker (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 3.9 billion; Market cap: $46.8 billion; Price-to-sales ratio: 0.3; Dividend yield: 5.0%; TSINetwork Rating: Extra Risk; www.ford.com) reported that its revenue rose 16.7% in the… Read More
Shortages of computer chips and other components are weighing on Toyota and Honda’s profits. However, the easing of COVID-19 lockdowns in China and other countries should improve the flow of these parts. Investors will also benefit from consumers’ embrace of electric vehicles.
TOYOTA MOTOR CO. ADRs… Read More
EBAY INC. $48 is a buy. The company (Nasdaq symbol EBAY; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 542.7 million; Market cap: $26.0 billion; Price to-sales ratio: 2.8; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.ebay.com) operates e-commerce websites, in over 190 countries, where sellers pay fees… Read More
Technology stocks fared poorly in 2022 on investor fears that rising inflation and interest rates would dramatically slow spending on new computers and services. However, we still like the long-term prospects for these three legacy names, and feel IBM and Intel are currently top choices… Read More
CANADIAN TIRE CORP. (class A non-voting) is a buy. The retailer (Toronto symbols CTC $285 and CTC.A $162; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 60.8 million; Market cap: $9.8 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.canadiantire.ca) continues to make progress with its new long-term growth… Read More
TRANSCONTINENTAL INC. $15 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: $1.3 billion; Price-to-sales ratio: 0.5; Dividend yield: 6.0%; TSINetwork Rating: Average; www.tctranscontinental.com) is Canada’s leading commercial printer. It also makes plastic packaging.
Torstar,… Read More
For 2023, we have singled out three growth stocks that we think offer you exceptional prospects in the year ahead. What’s more, each of the three is a market leader, which cuts your risk if the economic outlook weakens.
INTACT FINANCIAL, $198.96, is a #1 Power Buy for 2023. The… Read More
FINNING INTERNATIONAL INC. $37 is a buy. The company (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.4 million; Market cap: $5.6 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.finning.com) sells and services Caterpillar-brand heavy equipment in Western Canada, South… Read More
Molson Coors continues to benefit from the re-opening of bars and restaurants in the wake of COVID-19 lockdowns. That has let it resume dividend payments and pay down debt. The company is also launching non-beer products to spur its growth. However, higher operating costs continue… Read More
CANADIAN IMPERIAL BANK OF COMMERCE $57 is a buy. The bank (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 906.2 million; Market cap: $51.7 billion; Price-to-sales ratio: 2.4; Dividend yield: 6.0%; TSINetwork Rating: Above Average; www.cibc.com) will raise your quarterly dividend with the January… Read More
Re-opening of the economy has spurred spending on travel and entertainment. It has also spurred American Express shares, which have recovered strongly from their pandemic low of $67. We still like the company’s long-term outlook, particularly as its focus on affluent clients helps keep credit… Read More
MCKESSON CORP. $380 is a buy. The wholesale drug distributor (New York symbol MCK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 141.8 million; Market cap: $53.9 billion; Price-to-sales ratio: 0.2; Dividend yield: 0.6%; TSINetwork Rating: Above Average; www.mckesson.com) reported 5.4% higher revenue for its fiscal 2023 second quarter,… Read More
LINAMAR CORP. $64 remains a buy. The company (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing sector; Shares outstanding: 63.6 million; Market cap: $4.1 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.
Linamar continues to… Read More
Great-West and other insurance companies invest the premiums they receive in stocks, bonds and other securities. They use that income to pay out claims to policyholders. However, in the latest quarter, losses on those securities offset the benefits of a big acquisition.
GREAT-WEST LIFECO INC. $31… Read More
