5 Stocks with Great Classic Value Fundamentals

  • (0:45) - Where Are They Cheap Stocks Hiding?
  • (3:00) - Stock Screening Criteria
  • (7:10) - Tracey's Top Stock Picks
  • (20:45) - Episode Roundup: AIG, ETH, F, GBX, ZUMZ

Welcome to Episode #145 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

This week, she’s not messing around.

What stocks are classically cheap in June of 2019?

Screening for Classic Value Stocks

Classic value fundamentals include not just the price-to-earnings ratio, but also the price-to-book and price-to-sales ratios, the PEG, and the Price to Cash Flow ratio.

Including all of the classic value fundamentals means the screen is going to be really narrow.

But in addition to all of these fundamentals, the screen also looked for Zacks Rank #1 (Strong Buy) and #2 (Buy) stocks because those should have rising earnings estimates.

And not to be left out, the screen added the Zacks Style Score for Value of A or B, which are the top two categories.

Will ANY stocks make it through such a narrow, and tough, screen?

Surprisingly, 15 stocks were cheap via the classic value metrics, had growth and the proper Ranks and Style Scores.

5 Classic Value Stocks to Keep on Your Short List

1.       AIG AIG has had a big rally in 2019, as the shares are up over 34% year-to-date. That’s more than double the S&P 500 over the same period. But it’s still cheap, with a forward P/E of 10.7 and a P/S ratio of only 0.9. It also pays a dividend, currently yielding 2.7%.

2.       Ethan Allen ETH is in the beaten down retail group but this furniture retailer’s shares are up 20.5% on the year, beating the S&P 500, which is up 15%. With a PEG of 0.88 and a P/S ratio of just 0.7 it is both a value stock and has growth.

3.       Ford F is dirt cheap, with a forward P/E of just 7.2 even though the shares are up 29.4% year-to-date. It has a PEG ratio which just barely made the screen at 0.99 but that means it has both value and growth. It also pays a juicy dividend currently yielding 6.3%.

4.       Greenbrier GBX makes railcars. This is a cyclical industry. Year-to-date the shares have sunk 27.4%. Earnings are also expected to decline in fiscal 209 by 12.4%. But it’s cheap with a P/E of 8. It also pays a dividend, currently yielding 3.7%.

5.       Zumiez ZUMZ has surprised the naysayers who believe that all the apparel retailers are in trouble. This young adult retailer grew its first quarter comps by 3.3%, on top of a strong 8.3% in the year ago quarter. It said May comps were also coming in positive, at 2.4%. Shares have fallen 8.3% over the last 3 months on retail fears. But it has a P/E of just 11.8 and a PEG of 0.9.

What else should you know about finding classic value stocks?

Tune into this week’s podcast to find out.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

Click to get this free report

Greenbrier Companies, Inc. (The) (GBX): Free Stock Analysis Report

Ford Motor Company (F): Free Stock Analysis Report

American International Group, Inc. (AIG): Free Stock Analysis Report

Zumiez Inc. (ZUMZ): Free Stock Analysis Report

Ethan Allen Interiors Inc. (ETH): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Technology Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More