The 5 best-rated classic value stocks for June 2024 – June 28, 2024

• (1:00) – Conducting a stock screening for strong value stocks
• (8:40) – Tracey’s current top tips for your portfolio
• (21:10) – Episode summary: BASF, F, KBH, PVH, UHS
• [email protected]

Welcome to episode #373 of the Value Investor Podcast.

Every week, Tracey Ryniec, editor of Zacks Value investor portfolioshares some of her best value investing tips and stock recommendations.

Large-cap indexes are hitting new all-time highs, once again driven by new highs in the Magnificent 7 stocks. None of these stocks are cheap, and many other growth stocks also appear stretched in terms of valuations.

Are there ANY classic value stocks currently?

What are classic value stocks?

There is a difference between your underlying stock, which might mean a low P/E or P/S ratio, and “classic” value. Classic value is defined as a stock with low ratios in ALL five value metrics, including P/E, P/S, P/B, P/S and PEG ratios.

This will be a much smaller group of stocks when so many fundamentals are thrown together. It’s hard enough to get a low P/E or a P/S ratio below 1.0. But to have five different fundamentals dirt cheap is difficult.

Screening for classic value stocks

Zacks has a fantastic premium screen that combines all five fundamentals with top ranks of #1 (Strong Buys) and #2 (Buys) and the best Value Style Scores A and B.

It also looks for stocks with a price above $5 per share because we don’t want penny stocks.

This is a very tight filter that has typically returned between 5 and 20 stocks over the years.

This screen returned 16 stocks this time, even though the indices hit new highs.

The 5 best-rated classic value stocks for 2024

1. BASF SE (BASFY Quick quoteBASF – Free report)

BASF’s company slogan is “We create chemistry.” This global chemical company with a large market capitalization is dirt cheap.

BASF has a forward P/E of 14.2 and a PEG ratio of just 0.99. This PEG ratio puts it on the screen just below the line, as a PEG of 1.0 or less is expected.

BASF also pays a dividend that yields 5.2% on Zacks.com and 7.3% on YahooFinance.

Should a chemical company like BASF be on your value stock watchlist?

2. Ford Motor Company (F Quick quoteF – Free report)

Ford has been a cheap stock for several years. It trades at a P/E ratio of just 6. But it also has a PEG ratio of just 0.78. Growth and value are a powerful combination.

Ford also pays a dividend, which currently stands at 5 percent.

Should Ford be on your value stock watch list?

3. KB homepage (KBH Quick QuoteKBH – Free report)

KB Home is one of the large national homebuilders. Homebuilder stocks have been cheap stocks all year, even when share prices have been rising. KB Home has a P/E ratio of 8.4 and a PEG ratio of 0.7.

In addition, a dividend of 1.4% is paid.

Is it too late to buy homebuilders like KB Home?

4. PVH Corp. (PVH Quick QuotePVH – Free report)

PVH Corp. has become cheaper in 2024 as shares have fallen 10% year-to-date. PVH, a Zacks Rank #2 (Buy) stock, has a P/E ratio of 10. But it still has both growth and value as its PEG ratio is only 0.9.

PVH also pays a dividend, but the yield is only 0.1%.

5. Universal health services (UHS Quick QuoteUHS – Free report)

Universal Health Services operates hospitals, outpatient and mental health facilities. Universal Health Services shares are trading near their 52-week highs but are still cheap with a forward P/E of 13.6. The PEG ratio is 0.9.

Universal Health Services also pays a dividend of 0.4%. It is a Zacks Rank #2 (Buy) stock.

Should value investors have Universal Health Services on their watchlist?

What else should you know about classic value stocks this summer?

Tune in to this week’s podcast to find out.