Chicago, IL – July 5, 2019 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Why Warren Buffett Had to Buy Amazon” data-reactid=”15″>Why Warren Buffett Had to Buy Amazon
Welcome to Episode #148 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.
Stocks continue to hit new all-time highs this year.
In the first six months of the year, the NASDAQ jumped 21%.
But what about value stocks? How are they doing in 2019?
Like we’ve seen over the past 2 years, they underperformed growth for the first six months.
The Vanguard Value Index ETF was up 14% while the Vanguard Growth Index ETF gained 22.9%.
What’s a value investor to do?
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Berkshire Bought Amazon in 2019” data-reactid=”24″>Berkshire Bought Amazon in 2019
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Despite Warren Buffett’s insistence that his lieutenants were still value investors, the Berkshire Hathaway portfolio took a turn this year when it bought nearly $1 billion worth of Amazon (AMZN) shares.” data-reactid=”25″>Despite Warren Buffett’s insistence that his lieutenants were still value investors, the Berkshire Hathaway portfolio took a turn this year when it bought nearly $1 billion worth of Amazon (AMZN) shares.
Unlike the purchase of Apple in 2016, there was no argument to be made that Amazon was a value stock by any classical definition such as P/E, P/S or PEG.
But perhaps the managers were tired of buying airline stocks, as the portfolio already owns four of those, or financials. Nearly half the Berkshire portfolio is now in financials, which are underperforming again.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Growth Stocks for Value Investors?” data-reactid=”28″>Growth Stocks for Value Investors?
There’s nothing wrong with value investors diversifying their portfolios to include some growth.
There are no rules to investing in your own portfolio.
For instance, what about buying some big cap growth? Is there any value in any of the big cap FAANG names?
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The Cheapest FAANG Stocks” data-reactid=”32″>The Cheapest FAANG Stocks
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="1. On a P/E level, Apple (AAPL) has been the cheapest of the FAANG stocks. But it’s not as cheap as it used to be. It now has a forward P/E of 17.3 and earnings are expected to fall 3.5% this fiscal year.” data-reactid=”33″>1. On a P/E level, Apple (AAPL) has been the cheapest of the FAANG stocks. But it’s not as cheap as it used to be. It now has a forward P/E of 17.3 and earnings are expected to fall 3.5% this fiscal year.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="2. Alphabet (GOOGL) is next cheapest with a forward P/E of just 23.7 and a Price-to-Book ratio of 4.1. Shares are up just 6.5% year-to-date.” data-reactid=”34″>2. Alphabet (GOOGL) is next cheapest with a forward P/E of just 23.7 and a Price-to-Book ratio of 4.1. Shares are up just 6.5% year-to-date.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="3. Facebook (FB) also sports a moderate P/E ratio of just 27.2. But it has a price-to-book of 6.4 and a price-to-sales ratio of 9.4. But that’s cheaper than Netflix (NFLX) which sports a P/B ratio of 28. Facebook shares have soared in 2019, up 48% year-to-date.” data-reactid=”35″>3. Facebook (FB) also sports a moderate P/E ratio of just 27.2. But it has a price-to-book of 6.4 and a price-to-sales ratio of 9.4. But that’s cheaper than Netflix (NFLX) which sports a P/B ratio of 28. Facebook shares have soared in 2019, up 48% year-to-date.
What other big cap growth stocks could value investors consider?
Tune into this week’s podcast to find out.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="[In full disclosure, Tracey owns shares of FB, GOOGL, and AMZN in her personal portfolio.]” data-reactid=”38″>[In full disclosure, Tracey owns shares of FB, GOOGL, and AMZN in her personal portfolio.]
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Looking for Stocks with Skyrocketing Upside?” data-reactid=”39″>Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="See the pot trades we’re targeting>>” data-reactid=”42″>See the pot trades we’re targeting>>
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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.” data-reactid=”48″>Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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