Markets
DIS

Zacks Value Investor Highlights: Chipotle, Ulta, Under Armour, General Electric and Disney

A generic image of stock metrics
Credit: Shutterstock photo

For Immediate Release

Chicago, IL - October 20, 2017 - Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: ( https://www.zacks.com/stock/news/279271/is-2017-a-replay-of-the-1960s-nifty-fifty )

Is 2017 a Replay of the 1960s Nifty Fifty?

Welcome to Episode #64 of the Value Investor Podcast.

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

The growth stocks are still on a rampage, with FANG, the biotechs and the semiconductor stocks soaring in 2017.

A lot of people in the media like to compare this market with the late 1990s dot-com era but Tracey thinks it more closely resembles the late 1960s and early 1970s bull market.

And for value investors, that means having patience.

The Rise of the Nifty Fifty

In the 1960s, growth stocks were also all the rage with investors jumping into a group of about 50 stocks that took on the popular name "The Nifty Fifty."

These were considered blue chip stocks where nothing could go wrong. Investors were willing to buy them at whatever valuation in order to get their innovation and growth. Sound familiar?

By the time of the 1972 bear market, the group was trading with an average valuation of 50x.

But then, these growth stocks fizzled, and the stock market along with them.

Today, investors are willing to pay a high price for many of the cutting-edge growth stocks. But some are already fizzling.

Could the fizzling growth stocks be value stocks? Or are they value traps?

5 Growth Stocks That Are Out of Favor

1. Chipotle (NYSE: CMG - Free Report ) shares have fallen 56% over the last 2 years. The PR issues it faced in late 2015 haven't yet abated. The shares are no longer the darling of Wall Street. But is it a value at this level?

2. Ulta (Nasdaq: ULTA - Free Report ) shares are down 20% year-to-date as the analysts are concerned it's going to be Amazoned. It once traded as high as 35x earnings and is now at 23x. Is it a value?

3. Under Armour (NYSE: UAA - Free Report ) was once one of the top growth stocks. It was expected to take the mantle away from Nike as the top apparel sportswear and shoe maker. But shares are down 43% year-to-date. They once traded near $50 and are now around $16. Is it time to get in?

4. General Electric (NYSE: GE - Free Report ) is trading at multi-year lows with shares down 27% in 2017. Wall Street has turned its back on this once "sure thing" blue chip. It trades with a forward P/E of just 15.3. Should value investors be interested?

5. Disney (NYSE: DIS - Free Report ) had been flying high for years as its movies have dominated the box office, especially the Star Wars franchise. But shares are down 10% over the last 2 years, underperforming the overall stock market. They used to trade around 20x earnings but now trade at just 15.3 times. Is this a buying opportunity?

While many of the Nifty Fifty companies are still around and trading on the exchanges, such as Walmart, Coke and IBM, quite a few are now defunct or a shadow of their former selves including Schlitz Brewing, Polaroid and Eastman Kodak.

Additionally, after the bear market of the 1970s, it took years for some of the Nifty Fifty companies to again hit their pre-bear highs.

That's a reminder for investors that, in the end, valuation does matter.

What else should you know about finding value in the fizzling growth stocks?

Tune into this week's podcast to find out.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros .

Get the full Report on CMG - FREE

Get the full Report on ULTA - FREE

Get the full Report on UAA - FREE

Get the full Report on GE - FREE

Get the full Report on DIS - FREE

Follow us on Twitter: https://twitter.com/zacksresearch

Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com/performance

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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

Walt Disney Company (The) (DIS): Free Stock Analysis Report

General Electric Company (GE): Free Stock Analysis Report

Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report

Ulta Beauty Inc. (ULTA): Free Stock Analysis Report

Under Armour, Inc. (UAA): Free Stock Analysis Report

To read this article on Zacks.com 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.


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

DIS CMG GE ULTA UAA

Other Topics

Stocks

Latest Markets Videos

Zacks

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 www.zacks.com.

Learn More