The S&P 500 and the Nasdaq jumped over 1% through morning trading on election day. Wall Street has been generally pleased by earnings results thus far, and the outlook for more rate cuts remains intact even if the Fed will likely cut at a slower pace.
The S&P 500 held the line at its 50-day moving average. There could, without a doubt, be more volatility and selling in the near term. It is worth remembering that the Nasdaq has soared 75% in the last two years, with the benchmark up 52%.
Thankfully, Wall Street is rather a-political in many aspects. For instance, average annual stock market returns during the Trump and Obama administrations—which included periods of unified and divided governments—were nearly identical: 16.0% and 16.3%, respectively.
Zacks Investment Research
Image Source: Zacks Investment Research
That said, some investors might decide it's best to search for value stocks instead of chasing tech stocks that have skyrocketed in 2024 and off the market’s late 2022 lows.
Thankfully, there are tons of top-ranked value stocks to buy, especially if people 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 November and beyond.
Top-Ranked Value Stock 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…
Buy Synchrony Financial Stock and Hold for Great Value?
Synchrony Financial SYFis a digitally-focused consumer financial services firm. The company offers a variety of credit cards and financing, as well as FDIC-insured banking and savings offerings. On top of that, Synchrony Financial partners with retailers like Mattress Firm and Lowe’s to offer deals through its marketplace.
Zacks Investment Research
Image Source: Zacks Investment Research
Synchrony Financial posted a beat-and-raise third quarter in the middle of October. The company’s earnings outlook has popped for 2024 and 2025, with its most accurate Zacks estimates coming in above consensus for both periods.
Synchrony Financial’s upbeat earnings revisions help it earn its Zacks Rank #1 (Strong Buy). The financial services company’s strong balance sheet supports its dividend, which yields 1.8%.
Zacks Investment Research
Image Source: Zacks Investment Research
Synchrony Financial stock has climbed 100% in the past 10 years and its surge over the last month sent SYF to new all-time highs, surpassing its 2021 peaks. The stock has crushed the Zacks Finance Market’s 16% run over the last decade, with SYF’s 50% YTD surge leaving its sector’s 9% run in the dust.
Synchrony Financial’s stock price performance makes its valuation all the more impressive. Synchrony Financial’s improving earnings outlook helps it trade at a 35% discount to its highs and in-line with its 10-year median at 8.6X forward earnings. Synchrony Financial stock offers 40% value compared to the Finance sector.
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.
Click here to sign up for a free trial to the Research Wizard today.
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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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