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. |
LEON’S FURNITURE LTD. $22 is a buy for aggressive investors. The retailer (Toronto symbol LNF; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 68.0 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.6; Dividend yield: 3.3%; TSINetwork Rating: Average; www.leons.ca) sells furniture and appliances through 302 stores, mainly under the… Read More
As investors prefer “pure-play” firms that focus on a single businesses, more companies are turning to spinoffs as a way to boost their value. For example, on April 1, 2024, 3M spun off its Health Care division as an independent firm called Solventum. Shareholders received… Read More
We continue to recommend investors diversify their Finance sector holdings with non-bank stocks. Here are three stocks that dominate their niche markets, which helps cut your risk. What’s more, they are incorporating artificial intelligence (AI) technology to improve the performance of their products and services… Read More
RESTAURANT BRANDS INTERNATIONAL INC. $101 is a buy for aggressive investors. The fast-food operator (Toronto symbol QSR, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 450.0 million; Market cap: $45.4 billion; Price-to-sales ratio: 4.7; Dividend yield: 3.2%; TSINetwork Rating: Average; www.rbi.com) has 31,113 outlets in over 100 countries, comprised… Read More
CANADIAN TIRE CORP. (class A non-voting) is a buy. The retailer (Toronto symbols CTC $240 and CTC.A $136; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 60.8 million; Market cap: $8.3 billion; Price-to-sales ratio: 0.5; Dividend yield: 5.1%; TSINetwork Rating: Above Average; www.canadiantire.ca) is down 4% since the start… Read More
Royal Bank recently completed its acquisition of HSBC’s Canadian operations. While big and complex acquisitions like this add risk, particularly if technical disruptions prompt HSBC clients to switch to a rival bank, we’re confident the deal will spur Royal’s profits higher over the next few… Read More
MOLSON COORS CANADA INC. is still a hold. The beer brewer’s (Toronto symbols TPX.A $88 and TPX.B $80; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 215.7 million; Market cap: $17.3 billion; Price-to-sales ratio: 1.1; Dividend yield: 3.0%; TSINetwork Rating: Average; www.molsoncoors.com) sales in the quarter ended… Read More
FINNING INTERNATIONAL INC. $43 is a buy. The company (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 142.2 million; Market cap: $6.1 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.finning.com) sells and services Caterpillar-brand heavy equipment in Western Canada but also South… Read More
GEN DIGITAL INC. $21 (www.gendigital.com) is a buy. The company is the parent company for several cybersecurity-related brands including Norton, LifeLock, and Avast. Gen continues to spend a high 8% of its revenue on research. That’s letting it develop new products to spur its long-term growth. For example,… Read More
NORDSTROM INC. $19 remains a hold. The company (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 160.1 million; Market cap: $3.0 billion; Price-to-sales ratio: 0.2; Dividend yield: 4.0%; TSINetwork Rating: Extra Risk; www.nordstrom.com) owns and operates 359 department stores in the U.S. Those locations sell… Read More
J.P. Morgan’s shares are up 12% since the start of 2024, while Wells Fargo has gained 24%. That’s largely because higher interest rates have increased their revenue. At the same time, loan provisions remain low in relation to their loan portfolios. Moreover, both stocks continue… Read More
These two firms have struggled since being spun off by larger medical firms. While both are taking steps to improve their product lineups, we feel embecta is in a better position to rebound from its recent drop.
VIATRIS INC. $12 is a hold. The company (New York symbol… Read More
LOBLAW COMPANIES LTD. $149 is a buy. Canada’s largest food seller (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 316.4 million; Market cap: $47.1 billion; Price-to-sales ratio: 0.8; Dividend yield: 1.2%; TSINetwork Rating: Above Average; www.loblaw.ca) is adding more discount-price stores as customers deal with high… Read More
TORONTO-DOMINION BANK $79 is a buy. The bank (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $142.2 billion; Price-to-sales ratio: 2.7; Dividend yield: 5.2%; TSINetwork Rating: Above Average; www.td.com) acquired artificial intelligence (AI) software specialist Layer 6 Inc. in September… Read More
LEON’S FURNITURE LTD. $22 is a buy for aggressive investors. The retailer (Toronto symbol LNF; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 68.0 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.6; Dividend yield: 3.3%; TSINetwork Rating: Average; www.leons.ca) sells furniture and appliances through 303 stores, mainly under the… Read More
STATE STREET CORP. $74 is a buy. The company (New York symbol STT; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 301.9 million; Market cap: $22.3 billion; Price-to-sales ratio: 2.0; Dividend yield: 3.7%; TSINetwork Rating: Average; www.statestreet.com) sells accounting and administrative services to operators of mutual funds and pension… Read More
ABB LTD. ADRs $48 is a buy. This Swiss-based company (Over-the-counter Pink Sheets symbol ABBNY; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs o/s: 1.8 billion; Market cap: $86.4 billion; Price-to-sales ratio: 2.7; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.abb.com) is a leading maker of electrical transformers,… Read More
GANNETT CO. INC. $2.18 is a hold. The company (New York symbol GCI; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 148.8 million; Market cap: $324.4 million; Price-to-sales ratio: 0.1; Dividend suspended in 2020; TSINetwork Rating: Speculative; www.gannett.com) publishes daily and weekly newspapers in 220 local markets in 43… Read More
GENERAL MILLS INC. $69 is a hold. This consumer staples giant (New York symbol GIS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 564.5 million; Market cap: $40.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 3.4%; www.generalmills.com) is one of the world’s largest foodmakers. Its top brands include Cheerios (cereal),… Read More
SNAP-ON INC. $292 is a hold. The company (New York symbol SNA; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 52.9 million; Market cap: $15.4 billion; Price-to-sales ratio: 3.1; Dividend yield: 2.5%; TSINetwork Rating: Average; www.snapon.com) makes tools for auto mechanics and industrial customers.
In the fourth quarter of… Read More
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