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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CANADIAN TIRE CORP. (class A non-voting) is a buy. The retailer (Toronto symbols CTC $240 and CTC.A $136; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 60.8 million; Market cap: $8.3 billion; Price-to-sales ratio: 0.5; Dividend yield: 5.1%; TSINetwork Rating: Above Average; www.canadiantire.ca) is down 4% since the start of 2024, mainly due to concerns that elevated inflation and interest rates are prompting consumers to spend less on discretionary items....
ROYAL BANK OF CANADA $140 is a buy. The bank (Toronto symbol RY; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.4 billion; Market cap: $196.0 billion; Price-to-sales ratio: 3.4; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.rbc.com) is Canada’s largest by market cap....
MOLSON COORS CANADA INC. is still a hold. The beer brewer’s (Toronto symbols TPX.A $88 and TPX.B $80; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 215.7 million; Market cap: $17.3 billion; Price-to-sales ratio: 1.1; Dividend yield: 3.0%; TSINetwork Rating: Average; www.molsoncoors.com) sales in the quarter ended March 31, 2024, rose 10.7%, to $2.60 billion from $2.35 billion a year earlier (all amounts except share prices and market cap in U.S....
NORDSTROM INC. $19 remains a hold. The company (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 160.1 million; Market cap: $3.0 billion; Price-to-sales ratio: 0.2; Dividend yield: 4.0%; TSINetwork Rating: Extra Risk; www.nordstrom.com) owns and operates 359 department stores in the U.S....
J.P. Morgan’s shares are up 12% since the start of 2024, while Wells Fargo has gained 24%. That’s largely because higher interest rates have increased their revenue. At the same time, loan provisions remain low in relation to their loan portfolios. Moreover, both stocks continue to trade at attractive multiples to their earnings.
J.P....
These two firms have struggled since being spun off by larger medical firms. While both are taking steps to improve their product lineups, we feel embecta is in a better position to rebound from its recent drop.
VIATRIS INC. $12 is a hold. The company (New York symbol VTRS; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 1.2 billion; Market cap: $14.4 billion; Price-to-sales ratio: 0.9; Dividend yield: 4.0%; TSINetwork Rating: Average; www.viatris.com) makes a variety of branded and generic drugs, include Celebrex (pain relief), Viagra (erectile dysfunction) and Lipitor (cholesterol)....
LOBLAW COMPANIES LTD. $149 is a buy. Canada’s largest food seller (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 316.4 million; Market cap: $47.1 billion; Price-to-sales ratio: 0.8; Dividend yield: 1.2%; TSINetwork Rating: Above Average; www.loblaw.ca) is adding more discount-price stores as customers deal with high inflation and interest rates.
In 2024, the company will open 40 new discount stores....