Welcome to Episode #161 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
With growth stocks still out performing value in 2019, despite the “great rotation” over the summer when value was, briefly, hotter than growth, it’s a good time to be ask how you know if you’re even a value investor at all.
5 Signs You’re a Value Investor
1. You are obsessed with Warren Buffett
Do you watch every interview on CNBC that Buffett does?
Do you read every one of Berkshire’s shareholder letters, attend the annual meetings because you’re a shareholder, or quote Buffett on social media?
An obsession with Mr. Buffett is one big sign that you’re probably a value investor yourself.
If you want to invest like him, you may want to consider MasTec MTZ, an infrastructure company. Yes the shares are up big in 2019 but they’re still trading with a forward P/E of just 13.
2. You love stocks trading at 52-week lows
Benjamin Graham, the father of value investing, has told investors to look for stocks trading on new 52-week lows.
If you enjoy looking at those stocks because you’re thinking you’re getting a bargain, you could be a value investor.
Macy’s M has been trading near its 52-week lows this year. It has a forward P/E of just 5.5.
3. You buy and hold your stocks
Buffett has owned some of his stocks for decades. Have you? If so, you may also be a value investor.
What if you had bought Kansas City Southern KSU, one of the big railroads, 10 years ago? Shares are up 411% versus 230% for the S&P 500 ETF (SPY) during that time.
4. You love “boring” companies
Buffett has gotten rich owning some of the more “boring” types of companies including industrials, railroads, energy and, famously, insurance.
Allstate ALL, a big property and casualty insurer, is cheap with a forward P/E of 11.1. It’s a Zacks Rank #1 (Strong Buy) which is expected to grow earnings by 20.2% in 2019.
5. You never buy companies with negative earnings
If you don’t understand what all the fuss is about with Uber or Lyft, both of which don’t have positive earnings, you may be a value investor.
Tesla TSLA fans have said for years that Tesla would soon have positive earnings. In the meantime, shares have underperformed the S&P 500 over the last 5 years with a gain of just 10.5% while the S&P 500 rose 52%.
What else should investors know about being value investors?
Tune into this week’s podcast to find out.
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Kansas City Southern (KSU) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
MasTec, Inc. (MTZ) : Free Stock Analysis Report
The Allstate Corporation (ALL) : Free Stock Analysis Report
Macy's, Inc. (M) : Free Stock Analysis Report
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