5 Value Stocks to Buy Now

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While growth stocks largely ebb and flow with the market tide, value stocks tend to be all-weather plays. And well they should — value stocks by default sacrifice a huge upside for reliability.

value stocksEven then, however, not all value stocks are great pickups at any given point; some value stocks are better than others some of the time. Certain value stocks might be good values, but bad businesses. That’s why it’s important to look at what the companies themselves are doing instead of just going by valuation metrics.

With that as the backdrop, here are five undervalued value stocks to buy. Although none of them are apt to have gained triple-digits a year from now, all of them have something of an edge in compared to their sector and style peers.

In no particular order, here are 5 great value stocks to buy.

Capital One Financial (NYSE:COF)

Capital OneThe 1000% gain from Capital One Financial (COF) shares since their early-2009 low would lead most people to assume COF was anything but undervalued. But the underlying results justify the stock’s price.

Capital One Financial is trading at a trailing price-to-earnings ratio of 11.5, and a forward-looking P/E ratio of 10.7. There’s likely to be plenty more of the same growth in store, too.

Sure, the rise in delinquencies at major U.S. banks seems alarming on the surface. But barring a complete implosion of the economic system, that’s a sign of an undertow that plays right into the hands of Capital One Financial, which caters to the subprime market.

Trinity Industries (NYSE:TRN)

trinity industries trn 185Trinity Industries (TRN) is another of the market’s best-kept secrets. The company makes, sells, and leases railroad cars and barges.

It’s been a great business to be in, this year. Total rail traffic is up 4.4% year-to-date, as of the end of August, and Moody’s expects more upside ahead through 2015. Specifically, Moody’s believes North Amertrnican rail fright volume will grow 2% to 3% through year, with 1% to 2% improvement in freight rates. That bodes well for Trinity Industries.

But what puts Trinity Industries in the upper echelon of value stocks worth a look? A trailing P/E of 7.35 and a strong likelihood of exceeding earnings expectations in the future. Per-share profit outlooks have been topped in each of the past fourteen quarters.

Nu Skin Enterprises (NYSE:NUS)

nuskinYes, earnings started to slump for Nu Skin Enterprises (NUS) beginning a couple of quarters ago, though the scope of the decline in income is a little misleading.

The profit of $2.02 per share in the fourth quarter of last year and the income of $1.80 per share the quarter before that were statistical outliers. Last quarter’s bottom line of 32 cents per share was actually a tad better than the 30 cent profit per share Nu Skin Enterprises posted in the same quarter a year earlier.

The sellers simply overshot between January and this week, sending the stock from $140 to $42. That unmerited beat-down has left NUS at a trailing P/E of 6.9 and a forward-looking P/E of 8.8 … and hitting its forward-looking targets is well within reach. That 70% plunge from Nu Skin Enterprises made NUS one of the best value stocks to buy.

Republic Airways Holdings (NASDAQ:RJET)

republic airways holdings 185The last few years haven’t been particularly easy ones for the airline industry. Demand is technically growing, but the industry hasn’t exactly seen huge growth.

Air travel in the United States is up 1.3% year-to-date, and that tepid increase has pretty much been the norm since the 2009 lull. Republic Airways Holdings (RJET) hasn’t been immune to that mediocrity. Sales have been dwindling since 2010, and profitability hasn’t been a foregone conclusion.

The picture is improving, however. Although Republic Airways Holdings has seen its total departures fall to the tune of 3% for the year so far, total passenger traffic is up 7% year-to-date. The forward-looking P/E of 7.5 qualifies it a one of the best value stocks to buy at this point.

American Axle & Manufacturing Holdings (NYSE:AXL)

american axle manufacturing axl 185Last but not least, at a trailing P/E of 11.7 and a forward-looking ratio of 7.1, American Axle & Manufacturing Holdings (AXL) is one of the market’s best value stocks out there.

Yes, the stock tanked at the beginning of August when American Axle & Manufacturing Holdings missed its Q2 earnings estimates. Shares started to rebound that same day, however, and never really looked back. It looks like investors have remembered this company is in the midst of its fifth straight year of sales growth, and next year’s projected 7.5% improvement in the top line means a sixth consecutive year of stronger sales.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/09/5-value-stocks-buy/.

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