Despite hindrances in the form of the timing of U.S. interest rate hikes, concerns over President Donald Trump’s ability to enforce pro-business reforms, tensions related to North Korea and more, major indexes have achieved many records this year.
In fact, investors’ risk appetite increased on diminished anxieties around the recent hurricanes in the United States, ongoing hopes over retrospective tax reforms that are expected to be pushed through by year-end as well as an increase in 10-year Treasury note yield.
Meanwhile, on Sep 13, most major Asian indexes closed slightly lower after the release of weaker-than-expected China fixed asset investment, industrial production and retail sales data. This suggests that the Chinese economy continued to cool, which could be a setback.
Nevertheless, investors are optimistic about the monthly report on inflation and the weekly report on initial jobless claims that are slated to be released on Sep 14 and are imperative for the Federal Reserve’s meeting next week. According to a research by Macquarie, as reported on MarketWatch, “Consumer price inflation data is expected to surprise on the upside thanks to seasonally higher gasoline prices and economic activity in the aftermath of Hurricane Harvey.”
The Nasdaq Index in Focus
With so much happening around, all major indexes have been on a bull run. The Nasdaq Composite Index, along with the S&P 500 and the Dow Jones Industrial Average, carried on their trend of scaling new highs, with all three closing at record highs yet again in yesterday’s trading session.
In fact, the technology-laden Nasdaq Composite Index closed 0.1% higher at 6460.19, booking its 48th all-time high this year, notwithstanding Apple Inc.’s AAPL losses.
Moreover, the index has outperformed both the other two leading indexes. Year to date, Nasdaq recorded a gain of 20%, compared to the S&P 500’s growth of 11.6% and the Dow’s growth of 12.1%.
Courtesy of positive economic data, rate hike prospects, and bullish forecasts regarding U.S. tax reforms, the index’s gains are expected to continue. Moreover, the continual rally in technology stocks is likely to take the index to new highs.
6 Great Value Stocks
Despite scaling such highs, we believe it is not too late to delve deeper into some fundamentally strong stocks of the index.
Value investors seek stocks that they believe are undervalued by the market. An elongated bull market has made stocks expensive on numerous measures, allowing fewer bargains to be realized.
Nonetheless, value investors should not lose hope yet as the Zacks Stock Screener comes to their rescue. Through this, we have zeroed in on five Zacks Rank #1 (Strong Buy) or 2 (Buy) Nasdaq stocks which have a Value Score of A or B on our Style Score system.
Our research shows that stocks with a Value Style Score of A or B when combined a Zacks Rank #1 or 2 offer the best opportunities in the value investing space. You can see the complete list of today’s Zacks #1 Rank stocks here.
We have also considered the trailing twelve months (TTM) price/earnings metric (P/E), which is an important factor for value stocks. This ratio is a snapshot of a firm’s earnings strength and thus investing in low P/E stocks can prove to be a good bargain for investors.
Further, all these stocks have healthy earnings growth prospects and have witnessed their full-year EPS estimates revise upwards, reflecting ongoing analyst optimism.
Pilgrim's Pride Corporation PPC is a chicken products company that offers its services in the United States, Puerto Rico and Mexico through agents and also exports to more than 90 countries worldwide. This Zacks Rank #1 company believes that strong demand for U.S. chicken in the overseas markets as well as growing sales of organic chicken products will likely boost its results in the quarters ahead.
Value Score: A
P/E Ratio (TTM): 14.6 (versus 15.4 for the industry)
Full-year EPS estimate revision (over 60 days): 18.2%
This year’s expected EPS growth rate: 37.1%
Sanderson Farms, Inc. SAFM is a renowned integrated poultry processing company with a Zacks Rank of 1. It processes, markets and distributes fresh prepared and frozen chicken products across the United States. The stock has been an analyst favorite of late, given its strong fundamentals and perceivably healthy growth prospects.
Value Score: A
P/E Ratio (TTM): 12.4 (versus 15.4 for the industry)
Full-year EPS estimate revision (over 60 days): 28.6%
This year’s expected EPS growth rate: 56.1%
Atlas Air Worldwide Holdings, Inc. AAWW is the parent company of Atlas Air and Polar Air Cargo, which together operate the world's largest fleet of Boeing freighter aircraft. This Zacks Rank #2 company is principally involved in the airport-to-airport air transportation of heavy freight cargo through its two operating subsidiary airlines.
Value Score: A
P/E Ratio (TTM): 14.2 (versus 18.4 for the industry)
Full-year EPS estimate revision (over 60 days): 4.4%
This year’s expected EPS growth rate: 6.2%
Insight Enterprises, Inc. NSIT is a global direct marketer of brand name computers, hardware and software. The company's sales force, aggressive marketing strategies and streamlined distribution together with its advanced proprietary information system have resulted in high customer loyalty and strong, profitable growth. The stock sports a Zacks Rank #1.
Value Score: A
P/E Ratio (TTM): 13.3 (versus 14.5 for the industry)
Full-year EPS estimate revision (over 60 days): 4.9%
This year’s expected EPS growth rate: 28%
YY Inc. YY is a Chinese communication social platform that engages users in online group activities through voice, text and video. Users can indulge in e-learning, music and entertainment, live game broadcasting, online games and even dating. The stock flaunts a Zacks Rank of 1.
Value Score: B
P/E Ratio (TTM): 14.8 (versus 47.3 for the industry)
Full-year EPS estimate revision (over 60 days): 19.2%
This year’s expected EPS growth rate: 44.5%
SkyWest, Inc. SKYW operates as a regional airline in the United States, through its subsidiaries. Pursuant to a joint marketing and code sharing agreement with Delta Airlines and Continental Airlines, the company operates as a Delta Connection in certain SkyWest markets and as a Continental Connection in certain markets in and out of Los Angeles. It presently holds a Zacks Rank of 2.
Value Score: A
P/E Ratio (TTM): 13 (versus 13.6 for the industry)
Full-year EPS estimate revision (over 60 days): 1.9%
This year’s expected EPS growth rate: 18.6%
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure.
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SkyWest, Inc. (SKYW) : Free Stock Analysis Report
YY Inc. (YY) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Sanderson Farms, Inc. (SAFM) : Free Stock Analysis Report
Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report
Insight Enterprises, Inc. (NSIT) : Free Stock Analysis Report
Atlas Air Worldwide Holdings (AAWW) : Free Stock Analysis Report
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