The Stock Watcher
Sign InSubscribe

Value Stocks Poised for Another Strong Year

Share this article

Value stocks favored over growth in 2021.

Description: A stock market chart with a red line representing value stocks and a blue line representing growth stocks.

Value stocks are poised for another strong year. The core reason is that companies with stable free cash flows, strong balance sheets, and a history of dividend payments are likely to be seen as safer investments than growth stocks. Momentum investing is essentially an exception to the idea of 'buying low and selling high.' Investors following this style of investing are more likely to buy stocks that have already seen a surge in price, and hold them until the price drops. Like billionaire investor Warren Buffett, I'm a massive fan of buying value stocks. Snapping up undervalued companies can turbocharge an investor's portfolio over the long term.

REPYY, BZLFY and CVI made it to the Zacks Rank #1 (Strong Buy) value stocks list on February 21, 2023. These stocks are all predicted to outperform the market in the near future. With the exception of Apple, eight tech giants are no longer “pure growth” stocks, while Exxon and Chevron are, a new study says. This is a sign that more Investors are beginning to favor value stocks over momentum stocks.

In this article, we will take a look at the 15 most undervalued value stocks to buy according to hedge funds. To see more such companies, we can look out for stocks that are trading at less than their book value, those with strong dividend yields and those with low EV/EBITDA ratios. Some speculative S&P 500 stocks may be getting some lift this year. But make no mistake — value stocks are still in control.

Manager of the top-performing Oakmark Fund wins by paying 'average prices for really good businesses'. “We try to buy stocks at 60% of what we think they’re worth. We’re looking for stocks that are trading at a discount to their intrinsic value.” Value Investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for large returns if the stock price eventually rises.

Value Investors also look for stocks with high dividend yields, low price-to-earnings ratios, and low price-to-book ratios. Investors should also be aware of the overall market conditions and the sector the stock belongs to. Value stocks tend to outperform during times of economic growth, while growth stocks tend to outperform during times of economic contraction.

When investing in value stocks, Investors should always be aware of the company’s fundamentals and the market environment. Value stocks are a great way to get exposure to companies with strong fundamentals at a discount. However, Investors should avoid chasing value stocks and instead focus on finding quality companies with undervalued stocks.

value investingmomentum investingwarren buffettundervalued stocksdividend yieldsev/ebitda ratiosprice-to-earnings ratiosprice-to-book ratios

May Interest You

Share this article
3640 Concord Pike Wilmington, DE 19803
About TheStockWatcher
© 2023 - TheStockWatcher. All Rights Reserved