Markets
LCI

5 Value Stocks That Brokers Love

A generic image of multiple stacks of coins next to a pen.
Credit: Shutterstock photo

With the global economy in trouble, investors have been counting on growth in the U.S. markets to balance the international downfall. However, with the domestic growth expectations gradually moderating and the economy witnessing disappointing job numbers last week, it seems like a faraway dream.

The softened economic data validates the Federal Reserve's decision to keep interest rates unchanged. Investors now anticipate further delay in a rate hike. The only positive was the 5-day consistent rise in the S&P 500 index, which, however, did not stay for long. Now the market is alive with fears of a recession both globally and locally.

Moreover, with concerns of the first half of the year still present, expectations for the third quarter do not paint a rosy picture. With China leading the market turmoil across the globe, along with a persistent weakness in the energy sector and strengthening dollar, investors remain worried.

According to estimates from both FactSet and S&P Capital IQ, corporate earnings on the S&P 500 are projected to decline over 5% in the third quarter. While the expectations have dropped for the year, investors cannot lose hope.

Instead, more than ever there is a need to search for companies, which are anticipated to uphold their performance amid the lowered growth outlook. Only a fundamentally strong company has the calibre to achieve its growth potential despite an unsupportive economic background. One such foolproof approach is investing in undervalued stocks that more than 80% brokers recommend.

5 Value Stocks to Bet On

With the help of our Zacks Stock Screener , we have selected stocks that sport a Zacks Rank #1 (Strong Buy) or #2 (Buy) and a value score of 'A.' Further, narrowing down the list with a Rating strong buy or buy of 80% or higher and a Price/Earnings (F1) ratio of less than 15 has helped us find 5 stocks that one could buy for the fourth quarter.

Using our new style score system , one can locate stocks that have a solid upside potential. Our Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of 'value traps' and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of 'A' or 'B' when combined with a Zacks Rank #1 or #2 handily beat other stocks.

Delta Air Lines, Inc.DAL : The Georgia-based company provides scheduled air transportation for passengers and cargo worldwide by operating through two segments, Airline and Refinery. The company's latest earnings beat marked the 10th consecutive quarter of earnings outperformance at the company. Moreover, we are impressed by Delta's efforts to enhance its shareholders' wealth through dividends and share buybacks.

Zacks Rank #1

Value Score: 'A'

P/E (F1): 9.93

Strong buy or buy broker rating: 100%

Tyson Foods, Inc.TSN : Headquartered in Arkansas, the company is the world's largest fully-integrated producer, processor and marketer of chicken and poultry-based food products. Tyson offers a wide array of meat products and enhances its portfolio through innovation and acquisitions. Its sales boosting initiatives and strong international presence are also appealing.

Zacks Rank #2

Value Score: 'A'

P/E (F1): 12.43

Strong buy or buy broker rating: 100%

United Continental Holdings, Inc.UAL : The Illinois-based company operates its businesses through two reporting segments: Mainline and Regional Affiliates and is the holding company for United Airlines and Continental Airlines. The company manages its business as an integrated network with assets deployed across its Mainline and regional carrier networks. The carrier outperformed in its latest earnings results aided by weak oil prices .

Zacks Rank #2

Value Score: 'A'

P/E (F1): 4.52

Strong buy or buy broker rating: 83.33%

Ally Financial Inc.ALLY : Headquartered in Michigan, the company provides financial products and services primarily to automotive dealers and their customers in the U.S. It offers dealer financial services, including a range of financial services and insurance products to automotive dealers and retail customers. Ally Financial has been making progress in the digital space since the last few years.

Zacks Rank #2

Value Score: 'A'

P/E (F1): 10.26

Strong buy or buy broker rating: 100%

Lannett Company, Inc.LCI : This Pennsylvania-based company manufactures and distributes pharmaceutical products sold under generic names and historically has manufactured and distributed pharmaceutical products sold under its trade or brand names. After delivering a strong performance in its latest earnings results, the company raised its financial guidance for full year fiscal 2015.

Zacks Rank #1

Value Score: 'A'

P/E (F1): 10.75

Strong buy or buy broker rating: 80%

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

DELTA AIR LINES (DAL): Free Stock Analysis Report

TYSON FOODS A (TSN): Free Stock Analysis Report

UNITED CONT HLD (UAL): Free Stock Analysis Report

LANNETT INC (LCI): Free Stock Analysis Report

ALLY FINANCIAL (ALLY): Free Stock Analysis Report

To read this article on Zacks.com click here.

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


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

In This Story

LCI UAL TSN ALLY DAL

Other Topics

Stocks

Latest Markets Videos