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Welcome to Episode #198 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.

As the NASDAQ, and tech stocks, make yet another new all-time high, it gets more difficult to remain a value investor.

Ever since the coronavirus sell-off, value investors, and Warren Buffett, in particular, have been subjected to a higher amount of trash talk from growth investors.

It culminated in day trader, and founder of Barstool Sports, Dave Portnoy, calling Buffett “past his prime” and mocking his sale of the airline stocks for a loss as the coronavirus pandemic hit the global economy. He thought Buffett sold the airline stocks too early.

But Buffett is usually just the punching bag for the entire value sector.

Is Buffett Out of Touch?

Buffett, and Berkshire Hathaway, have been mocked for having too much cash in its portfolio, for not buying more tech, for being too heavily invested in the big banks and financials, which are out of favor and underperforming.

In 1999, Buffett was called out for being out of touch with the dot-com mania and now, 21 years later, he is again being hit with the same criticism.

Yet if you dig into Berkshire Hathaway’s portfolio, you’ll find that it actually owns several of 2020’s hot stocks.

Apple, Apple, Apple

No one gives Buffett credit for Apple (AAPL – Free Report) .

Apple is now Berkshire’s largest single holding, at 36% of the portfolio. Berkshire first bought it in the first quarter of 2016. Warren Buffett has talked about his love of the management and cash flow many times over the last 4 years.

Apple shares are up 102% over the last 2 years and are hitting new highs.

His critics also look past some of his excellent long-term investments like Costco (COST – Free Report) , which is also hitting new highs as an essential business during the COVID pandemic.

Berkshire first bought it in 2001. Shares are up 49% over the past 2 years.

Additionally, Berkshire has been all-in on the credit card companies for many years.

Mastercard (MA – Free Report) has been a great investment. Shares were first bought in the first quarter of 2011. Over the last two years they’re up 50.4% compared to just 16% for the S&P 500.

Berkshire Owns Two FAANG Stocks

And Berkshire doesn’t own just one FAANG stock, it owns two.

Did you know that Berkshire owns Amazon (AMZN – Free Report) shares? It only entered into this position in the first quarter of 2019. Shares of Amazon are hitting new highs in 2020.

But one of its best recent investments was in luxury furniture retailer RH (RH – Free Report) .

It jumped into those shares in the third quarter of 2019. Shares are up 33% year-to-date and are hitting new highs.

What else should you know about Berkshire Hathaway’s portfolio and investing strategy?

Listen to this week’s podcast to find out.

Author: Tracey Ryniec

Source: Zacks: Suprise! Warren Buffett Actually Owns Some of the Street’s Hottest Stocks

  • (0:30) – Oil Takes A Huge Hit: Are There Any Deals?
  • (5:45) – E&P Companies To Keep Your Eye On
  • (10:05) – What Could Be The Positives That Come From This Downturn?
  • (22:00) – Episode Roundup: PXD, SLB, AR, CHK, CRK, EQT, LPI, OAS, RRC, OEG
  • Podcast@Zacks.com

Welcome to Episode #222 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week, Tracey is going solo to talk about the energy stocks.

They’ve been pummeled in the coronavirus sell-off with some stocks trading at 20-year lows.

What are the pros, and cons, of buying energy stocks this year?

The Cons of Buying Right Now

The elephant in the room is that some of the energy companies may not make it. This is the biggest “con” of buying the stocks right now.

Many have a lot of debt and now they will have little revenue coming in.

Whiting Petroleum has already filed for bankruptcy. Will others be next?

There are 7 exploration and production companies that have high leverage. Two of those are the following:

1. Chesapeake Energy (CHK – Free Report) has a market cap of just $149 million. Be careful of the smallest players. It’s expected to see negative earnings for the second year in a row.

2. Comstock Resources (CRK – Free Report) has a market cap of $1.39 billion and is trading over $5. Earnings are expected to fall 49% but it does have a forward P/E, which is currently 18.

A second “con” to buying right now is that it’s going to be at least a year, maybe longer, before investors will see revenue and/or earnings growth.

Are you willing to wait for revenue to turn around while other companies in other industries won’t have the same problem?

The Pros of Buying Energy Right Now

The biggest “pro” to buying is that energy stocks are cheap.

Look at services provider Schlumberger (SLB – Free Report) . Shares are down 84% over the last 5 years.

Is the worst-case scenario already priced in in those shares?

Schlumberger just cut its dividend by 75% to save cash, but it is still paying a dividend despite the energy industry mayhem, which says a lot. That dividend is currently still yielding 3.3%.

A second “pro” is that, because it’s the most hated sector, the stocks could see a big bounce back once earnings start to recover.

Look for the winners among the explorers.

Two companies with low leverage:

1. Pioneer Natural Resources (PXD – Free Report) shares are down 53% year-to-date and are near 5-year lows. But it has the best balance sheet in the industry which will serve it well through this difficult year.

2. EOG Resources (EOG – Free Report) has more than $2 billion in cash and analysts expect it to have positive free cash flow in 2020. It’s still paying a dividend, yielding 3.6%.

What else should you know about investing in energy in 2020?

Listen to this week’s podcast to find out.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Author: Tracey Ryniec

Source: Zacks: The Pros and Cons of Investing in Energy Stocks in 2020

Earnings season continues to roll on with over 800 companies expected to report this week, making it a busy week for reports.

While most of the S&P 500 has now reported, many of the small and mid-cap companies have not.

This is a big week for the retail companies as a dozen of them will be reporting earnings, including several of the big guns like JC Penney and Macy’s.

But we’ll also hear from a few of the high-flying, growth stocks.

5 of them have perfect earnings surprise track records. They haven’t missed on earnings in the past 5 years. That’s not easy to do.

Who knew that some hot stocks, also have hot earnings surprise streaks?

5 Perfect Earnings Charts

1. Salesforce (CRM – Free Report) hasn’t missed since Zacks data began in 2017. Shares are trading near 5-year highs, even with recent coronavirus weakness. Can it keep the momentum even as the market bears growl?

2. Planet Fitness (PLNT – Free Report) has one of the top charts of the week. Shares are up 344% since the 2015 IPO. It hasn’t missed during that time either, with a perfect record extending back nearly 5 years. Can it keep up its streak?

3. Square (SQ – Free Report) hasn’t missed since it’s 2015 IPO either but its shares have been on more of a roller coaster ride than Planet Fitness. Still, shares are up 20% year-to-date, well out performing the S&P 500 during that time. It’s seeing some coronavirus weakness. Is this a buying opportunity?

4. Anaplan (PLAN – Free Report) is up 134% since its 2018 IPO. It also has kept its earnings streak alive through the last year. Shares recently hit new highs. Can it keep up the double-digit sales growth?

5. Beyond Meat (BYND – Free Report) is well off its 2019 highs but is still up 67% since its IPO. It’s also got a crazy high P/E at 289x. But do investors care? It hasn’t missed since its 2019 IPO. Can earnings catch up with the enthusiasm?

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it’s predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce “”the world’s first trillionaires,”” but that should still leave plenty of money for regular investors who make the right trades early.

Author: Tracey Ryniec

Source: Zacks: 5 Perfect Earnings Charts

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

The calendar has turned to 2020 but the 2019 stock market rally continues, with large cap growth stocks hitting new record highs nearly every day.

But what about value?

Are there even any value stocks out there in this over-bought market?

Screening for Classic Value

Classic value means companies with cheap fundamentals including low P/E, P/B, P/S, P/CF and PEG ratios.

It’s not easy being cheap in all FIVE of those fundamentals. This screen is going to be narrow as a result.

In addition, you can add on the Zacks Value Style Score as well as the Zacks Ranks of #1 (Strong Buy) and #2 (Buy).

The Rank should give you stocks with rising earnings estimates (hopefully).

Given all of the criteria in this screen, it’s not surprising that only 8 companies passed the test.

These 8 companies are the best of the classic value stocks, based solely on the fundamentals, Style Score and Rank, that are out there.

All investors should do further research to find out why these companies have such low P/Es and why Wall Street is ignoring them.

Here are five of the companies.

5 Classic Value Stocks

1. Brighthouse Financial (BHF – Free Report) has a forward P/E of just 3.8. It has a PEG ratio of just 0.35 and 1 analyst has raised full year estimates in the last week.

2. Credit Suisse (CS – Free Report) has a forward P/E of just 8.9 and a PEG of 0.5. One analyst has raised his estimate for 2020 in the last week.

3. MetLife (MET – Free Report) is also cheap, with a forward P/E of just 8.4. Investors get a dividend, currently yielding 3.4%.

4. Penn National Gaming (PENN – Free Report) operates 39 gaming and racing facilities. It’s trading with a forward P/E of just 12.3 and a PEG ratio of just 0.4.

5. Signet (SIG – Free Report) is really cheap, with a forward P/E of 5.7, but many retailers have been struggling. One estimate has been raised for next fiscal year in the last week.

What else should you know about the hot market and buying classic value stocks?

Tune into this week’s podcast to find out.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Author: Tracey Ryniec

Source: Youtube: Where to Find the Best Classic Value Stocks Right Now

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