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.
[text_ad]
These two financial services providers continue to benefit from their recent plans to better focus on their core businesses. We still like both of these high-quality stocks, but prefer IGM for your new buying.
GREAT-WEST LIFECO INC. $52 is a hold. The insurer (Toronto symbol GWO; Conservative Growth and Income Portfolios, Finance sector; shares outstanding: 932.1 million; Market cap: $48.5 billion; Price-to-sales ratio: 2.8; Dividend yield: 4.7%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is Canada’s second-largest life insurer, after Manulife Financial....
Transcontinental continues to benefit from its 2018 purchase of a U.S.-based plastic packaging firm. That cut its reliance on its traditional commercial printing operations, particularly as advertisers and publishers shift to online platforms. A new cost-cutting plan should also push its earnings higher in the next few years and support its high yielding dividend.
TRANSCONTINENTAL INC....
GENERAL MILLS INC....
The company is paying an undisclosed sum for a majority stake in VOA, the energy drink brand co-founded by actor Dwayne “The Rock” Johnson....
ROYAL BANK OF CANADA $172 is a buy. The bank (Toronto symbol RY; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.4 billion; Market cap: $240.8 billion; Price-to-sales ratio: 4.2; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.rbc.com) continues to benefit from its March 2024 acquisition of the Canadian operations of U.K.-based HSBC Holdings plc (New York symbol HSBC) for $15.5 billion.
So far, eliminating overlapping operations has cut $224 million from Royal’s annual costs....
While both companies have struggled in the current media environment, their strong brands could turn them into takeover targets, particularly as the incoming Trump administration will probably allow more corporate mergers to go ahead.
TEGNA INC....