How to Find Highly-Ranked Value Stocks to Buy in Q4
The stock market edged higher to start the final full week of the third quarter. The S&P 500 is trading at fresh highs as Wall Street cheers on the Fed’s dovish start to its easing cycle.
Some investors might not want to dive into technology stocks and other high-flying industries that might be overheated at the moment.
Thankfully, there are tons of top-ranked value stocks to buy, especially if investors know where to look.
Today we show investors how to screen for stocks that offer the potentially winning combination of impressive value and improving earnings outlooks to buy in the fourth quarter of 2024.
Screen Basics
The screen we are digging into today comes loaded with the Research Wizard and aims to sort through highly-ranked Zacks stocks to find some of the top value names.
This value-focused screen searches only for stocks that boast Zacks Rank #1 (Strong Buys) or #2 (Buys). It also focuses on stocks with price-to-earnings (P/E) ratios under the median for its industry.
The screen also looks for stocks with price-to-sales (P/S) ratios under the median for its industry to help lock in relative value compared to its peers, since basing it off the wider market is not always the most useful tool.
The screen then digs into quarterly earnings rates above the median for its industry. This particular Zacks screen also uses a special blend of upgrades and estimates revisions to select the best seven stocks in this list.
The screen basics are listed below…
· Only Zacks Rank #1 (Strong Buy) or #2 (Buy) Stocks
· P/E (using 12-month EPS) - Under the Median for its Industry
· P/S - Under the Median for its Industry
· Percentage Change Act. EPS Q(0)/Q(-1)
· Rating Change and Revisions Factors (to help narrow the list to the 7 best stocks in this list)
This strategy comes loaded with the Research Wizard and it is called bt_sow_value_method1. It can be found in the SoW (Screen of the Week) folder.
The screen is pretty simple, yet powerful. Here is one of the seven stocks that made it through this week's screen…
Time to Buy Mattel Stock and Hold for Long-Term Value?
Mattel, Inc. MAT is a historic toys and games maker with a portfolio that includes Barbie, Hot Wheels, Fisher-Price, and much more. Mattel aims to grow its IP-driven toy business and expand its entertainment offerings.
Mattel has easily topped our quarterly earnings estimates the past two quarters, including a 19% second-quarter beat.
Mattel CFO Anthony DiSilvestro said last quarter that Mattel continued to generate significant cash flow and was executing on its capital allocation priorities. The firm expects to keep buying back its stock in the second half of the year and “achieve” its 2024 guidance and “grow both sales and earnings in 2025.”
Image Source: Zacks Investment Research
Mattel’s earnings outlook has improved since its Q2 release, landing MAT a Zacks Rank #2 (Buy). Mattel is projected to grow its adjusted earnings by 16% in 2024 and another 8% next year.
Mattel shares have climbed 75% during the last five years, crushing the Zacks Consumer Discretionary sector’s 16% drop. MAT’s run includes a 17% jump over the last three months.
Despite its outperformance, Mattel trades at a roughly 30% discount to its sector at 12.7X forward earnings and 37% below its three-year highs.
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: www.zacks.com/performance_disclosure
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Mattel, Inc. (MAT) : Free Stock Analysis Report