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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While AI is driving the shares of chipmakers like Nvidia to new heights, there are other technology stocks, like the three we analyze below, that let investors tap into this trend with much less risk.
INTERNATIONAL BUSINESS MACHINES CORP....
OVINTIV INC. $56 (www.ovintiv.com) is a buy. The oil and gas producer recently repurchased $98.65 million U.S. of its shares. That equals 1% of its $16.8 billion (Canadian) market cap....
LEON’S FURNITURE LTD....
Insurer Great-West and mutual fund seller IGM are re-organizing their operations. These moves will let them better focus on their main businesses and spur their long-term profits. However, we prefer IGM for your new buying.
GREAT-WEST LIFECO INC....
LINAMAR CORP....
AMERICAN EXPRESS CO. $164 is a buy. The company (New York symbol AXP, Conservative Growth Portfolio, Finance sector; Shares outstanding: 747.2 million; Market cap: $122.5 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.5%; TSINetwork Rating: Average; www.americanexpress.com) issues two types of cards: traditional credit cards, which let users carry a balance; and charge cards, which have no pre-set spending limit, although cardholders must pay off their balances each month....
Both stocks jumped during the pandemic as consumers embraced online shopping, but have moved down as stores re-opened....