What are value stocks?
One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.
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:
 How Successful Investors Get RICHLearn everything you need to know in ‘The Canadian Guide on How to Invest in Stocks Successfully’ for FREE from The Successful Investor. How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger. |
Insurer Great-West Lifeco and mutual funds provider IGM Financial continue to benefit from their recent moves to focus on their core businesses. We still like both, but prefer IGM for your new buying.
GREAT-WEST LIFECO INC. $48 is a hold. The insurer (Toronto symbol GWO; Conservative Growth and… Read More
Consumer confidence is starting to rebound now that inflation is easing and interest rates are falling.
That’s good news for these leading retailers. They should also benefit as supply chains normalize after the COVID-19 disruptions. Moreover, all three continue to trade at attractive multiples to their… Read More
While banks like J.P. Morgan and Wells Fargo (see page 101) should make up the bulk of your Finance sector holdings, we also recommend adding niche financial services stocks like these two.
EBAY INC. $64 is a buy. The company (Nasdaq symbol EBAY; Finance sector; Shares outstanding: 489.0… Read More
GENUINE PARTS CO. $116 is still a buy for long-term gains. The company (New York symbol GPC; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 139.1 million; Market cap: $16.1 billion; Price-to-sales ratio: 0.7; Dividend yield: 3.4%; TSINetwork Rating: Average; www.genpt.com) has over 10,800 company-owned and independent auto… Read More
As inflation eases in the wake of COVID-19 lockdowns and supply chain disruptions, the U.S. Federal Reserve recently cut its benchmark interest rate by 0.50%, to between 4.75% and 5.00%. It also looks likely that the Fed will continue to cut the rate in the… Read More
You Can See Our Aggressive Growth portfolio for November 2024 Here.
We designed our Portfolios to help you build the kind of portfolio we advocate. First, you should invest mainly in stocks from our “Average” or higher TSINetwork Ratings, which make up the bulk of the… Read More
BOMBARDIER INC. $108 (www.bombardier.com) is a hold. The company now focuses solely on making private luxury and business jet planes following the January 2021 sale of its passenger railcar business to France’s Alstom SA. Bombardier is in the process of shifting production of its Global line of jets… Read More
MOLSON COORS CANADA INC. is a hold. The company (Toronto symbols TPX.A $67 and TPX.B $74; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 215.7 million; Market cap: $15.4 billion; Price-to-sales ratio: 1.0; Dividend yield: 3.0%; TSINetwork Rating: Average; www.molsoncoors.com) is the world’s fifth-largest beer brewer. Its… Read More
The shares of IGM Financial are up over 20% since the start of 2024, as rising stock market values have lifted the fee income it earns on the assets under its management. The company’s outlook remains bright, as more baby boomers will turn to professional… Read More
CANADIAN IMPERIAL BANK OF COMMERCE $83 is a buy. The shares of this bank (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 937.2 million; Market cap: $77.8 billion; Price-to-sales ratio: 3.1; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.cibc.com) are up about 60% in… Read More
Note the following analysis was published just before announcement of TD’s settlement with U.S. banking regulators. Please see here for our update on the stock following that news. Note TD remains a buy.
TD Bank had to cancel its deal to acquire American banking firm First… Read More
Both these Canadian insurance stocks offer investors growth prospects as well as high dividend yields. We see each as a buy.
MANULIFE FINANCIAL, $40.06, is a buy. This safety-conscious stock (Toronto symbol MFC; Shares o/s: 1.8 billion; Market cap: $72.1 billion; TSINetwork Rating: Above Average; Yield: 4.0%; www.manulife.ca) represents one… Read More
BANK OF NOVA SCOTIA, $71.81, is a buy. The lender (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $86.2 billion; TSINetwork Rating: Above Average; Dividend yield: 5.9%; www.scotiabank.com) has completed the first stage of its plan to buy a 14.9% stake in U.S.-banking firm KeyCorp (New York… Read More
CAMPBELL SOUP CO. $49 (www.campbellsoupcompany.com) is a buy. The company plans to change its name to “The Campbell’s Company,” reflecting its broader array of products. It also recently transferred its stock listing from the New York Stock Exchange to Nasdaq (the shares continue to trade under the “CPB”… Read More
VIATRIS INC. $11 is a hold. The company (New York symbol VTRS; Income Portfolio, Manufacturing sector; Shares outstanding: 1.2 billion; Market cap: $13.2 billion; Price-to-sales ratio: 0.9; Dividend yield: 4.4%; TSINetwork Rating: Average; www.viatris.com) merged its biosimilars drug business with India’s Biocon Biologics in 2022. Biosimilars are cheaper… Read More
The shares of these two Japanese automakers are down from their recent highs. That’s mainly because the rising value of the Japanese yen in making their products more expensive in North America and other export markets. However, their new electric-powered vehicles improve their long-term prospects.
TOYOTA… Read More
MOLSON COORS CANADA INC. $73 (www.molsoncoors.com) is still a hold. The beer brewer’s sales in the quarter ended June 30, 2024, fell 0.4%, to $3.25 billion from $3.27 billion a year earlier (all amounts except share price in U.S. dollars). Stronger demand in Europe and Asia offset weaker… Read More
LEON’S FURNITURE LTD. $27 is a buy for aggressive investors. The retailer (Toronto symbol LNF; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 68.2 million; Market cap: $1.8 billion; Price-to-sales ratio: 0.7; Dividend yield: 3.0%; TSINetwork Rating: Average; www.leons.ca) sells furniture and appliances through 300 stores, mainly under the… Read More
These two subsidiaries of the Power Corp. holding company are now realizing the benefits of a new plan to better focus on their core areas of expertise. We like both but still prefer IGM for your new buying.
GREAT-WEST LIFECO INC. $42 is a hold. The company (Toronto… Read More
LINAMAR CORP. $62 is a buy. The company (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 61.6 million; Market cap: $3.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.linamar.com) makes a variety of automotive parts, including cylinder heads and cylinder blocks… Read More
