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:

Invest mainly in well-established companies;
Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
Downplay or avoid stocks in the broker/media limelight.

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Value Stocks Library Archive

Value Stocks

Big writedown hurts Six Flags

SIX FLAGS ENTERTAINMENT CORP. $15 is a hold. The company (New York symbol SIX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 101.5 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.5; No dividend paid; TSINetwork Rating: Average; www.sixflags.com) took its current form on July 1, 2024, when Cedar Fair L.P. merged with rival amusement park operator Six Flags Entertainment (old New York symbol SIX) in an all-stock transaction. The combined firm operates 27 amusement parks, 15 water parks and 9 resort properties in the U.S., Canada, and Mexico.

1 min read

Pat McKeough

Value Stocks

Recall adds to Baxter’s risk

BAXTER INTERNATIONAL INC. $19 is a now a hold. The company (New York symbol BAX; Conservative Growth Portfolio; Manufacturing sector; Shares outstanding: 511.6 million; Market cap: $9.7 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.7%; TSINetwork Rating: Average; www.baxter.com) makes specialized equipment for hospitals, including intensive-care-unit beds and electronic diagnostic systems.

1 min read

Pat McKeough

Value Stocks

Their prospects remain strong after 10 years

In July 2015, eBay spun off its PayPal business as a separate firm—investors received one PayPal share for each eBay share they held. Since then, eBay has jumped over 210%, while PayPal has gained 70%. We still like the outlook for both.

EBAY INC. $82 is a buy. The company (Nasdaq symbol EBAY; Finance sector; Shares outstanding: 452.0 million; Market cap: $37.1 billion; Price-to-sales ratio: 3.7; Dividend yield: 1.4%; TSINetwork Rating: Above Average; www.ebay.com) operates e-commerce websites, in over 190 countries.

2 min read

Pat McKeough

Value Stocks

Lower costs set to fuel earnings

STANLEY BLACK & DECKER INC. $72 remains a buy. The company (New York symbol SWK; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 154.9 million; Market cap: $11.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 4.6%; TSINetwork Rating: Average; www.stanleyblackanddecker.com) is one of the world’s largest makers of hand and power tools.

1 min read

Pat McKeough

Value Stocks

Intact’s acquisitions building value

INTACT FINANCIAL, $282.38, is a Power Buy. The insurer (Toronto symbol IFC; TSINetwork Rating: Average) (www.intactfc.com; Shares outstanding: 177.7 million; Market cap: $50.2 billion; Dividend yield: 1.9%) is Canada’s largest provider of property and casualty coverage: its policies cover more than five million individuals and businesses. Intact Insurance, Canada BrokerLink and belairdirect are its major brands.

In a bid to add value for investors, the company acquired OneBeacon Insurance Group for $1.7 billion U.S. in 2017. The Minnesota-based insurance holding company focuses on property-casualty coverage. Through its businesses, the firm provides a range of specialty insurance products (marine, sports, entertainment and more).

2 min read

Pat McKeough

Value Stocks

Updating your Aggressive stocks: NCR Atleos, NCR Voyix and Molson Coors Beverage Co.

NCR ATLEOS CORP. $37 (www.ncratleos.com) is a hold. On October 16, 2023, the old NCR Corp. (New York symbol NCR) split itself into two separate firms. One (called NCR Atleos) focuses on automated teller machines, and the other (called NCR Voyix, see below) focuses on digital commerce businesses. Investors received one share of NCR Atleos for every two NCR shares they held. The shares of the new company are now up over 80% since the split and trade at 9.2 times the $4.01 a share it will probably earn in 2025. That low p/e reflects the shift away from ATMs to online banking. NCR Atleos is a hold.

1 min read

Pat McKeough

Value Stocks

New plastic to spur Transcontinental

TRANSCONTINENTAL INC. $20 is a buy for aggressive investors. The company (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 83.6 million; Market cap: $1.7 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.5%; TSINetwork Rating: Average; www.tctranscontinental.com) is Canada’s leading printer of newspapers, advertising flyers, magazines and books. It also makes plastic packaging for consumer products.

Transcontinental has developed a new type of plastic film called BOPE (advanced biaxially oriented polyethylene).

1 min read

Pat McKeough

Value Stocks

Tariffs and changing tastes add to their risk

These beverage makers face two challenges: tariffs are adding to their costs, while consumers are shifting away from their main products. Both companies are cutting costs, which will bolster their profits and dividends. Even so, we see better opportunities elsewhere for new buying.

MOLSON COORS CANADA INC. is a hold. The company (Toronto symbols TPX.A $68 and TPX.B $65; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 197.7 million; Market cap: $13.0 billion; Price-to-sales ratio: 0.9; Dividend yield: 4.0%; TSINetwork Rating: Average; www.molsoncoors.com) is the world’s fourth-largest beer brewer.

2 min read

Pat McKeough

Value Stocks

Resilient retailer ready for next stage

Canadian Tire’s class A shares fell to below $140 earlier this year as investors feared new U.S. tariffs would add to its costs and hurt consumer spending. However, only about 15% of the amount it spends on acquiring or manufacturing products is tied to the U.S. The company is also adjusting its supply chains to further minimize the tariff impact. As a result, the stock is now up 12% since the start of 2025.

The company recently announced a new strategy that mainly involves making better use of customer shopping data to spur sales. At the same time, it’s closing unprofitable stores and cutting administrative costs.

4 min read

Pat McKeough

Value Stocks

Lower costs lift embecta earnings

EMBECTA CORP. $15 is a buy for long-term gains. The company (Nasdaq symbol EMBC; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 58.5 million; Market cap: $877.5 million; Price-to-sales ratio: 0.8; Dividend yield: 4.0%; TSINetwork Rating: Average; www.embecta.com) makes insulin syringes, insulin pens and related products for the treatment of diabetes.

1 min read

Pat McKeough

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Cannabis

Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.