The Most Basic Value Stock Screen Ever

You don’t have to get fancy when looking for value stocks.

A basic value stock screen, with a secret ingredient, is enough to do the trick.

The Most Basic Value Stock Screen Ever

Value stocks are fundamentally those where investors can buy a company’s earnings on sale.

That means the earnings have to be cheap.

Investors should start by screening for a Price-to-Earnings (P/E) ratio under 15.

Then add on the secret ingredient of the top Zacks Rank stocks, of Strong Buy and Buys.

Just this basic screen, with just 3 components, however, still returned over 400 stocks.

Value investors may have to go even cheaper, to a forward P/E of 10 or less, and may have to limit market cap to those companies over $500 million. That would eliminate the micro-cap companies.

That basic screen returned 94 top Zacks Ranked value stocks.

5 Cheap Top Stocks

1.  Bristol Myers Squibb (BMY - Free Report), the big, global drugmaker, has a forward P/E of just 8. 7 estimates have been revised higher for 2021 in the last 30 days. The company is expected to grow earnings by 15% in 2021. It’s a Zacks Rank #2 (Buy) stock.

2.  Danaos Corp. (DAC - Free Report) is one of the largest independent owners of containerships. Shares have soared 37% in the last month but remain incredibly cheap, with a forward P/E of just 2.7. 2021 earnings are expected to soar 89% and it has the coveted Zacks Rank of #1 (Strong Buy).

3.  DR Horton (DHI - Free Report) is one of the largest homebuilders in the United States. Earnings are expected to jump 40% in fiscal 2021 while revenues rise 28%. Yet, it’s cheap with a PEG ratio of just 0.7. It’s also a Zack Rank #1 (Strong Buy), the top Zacks Rank.

4.  PacWest Bancorp (PACW - Free Report) is a regional California bank with a market cap of $4.3 billion. Earnings are expected to soar 70% in 2021 to $3.57 from $2.10 last year. Shares trade with a forward P/E of just 9.9. It also pays a dividend, currently yielding 2.8%.

5.  Synchrony Financial (SYF - Free Report) is a private label credit card provider and financial company. 2021 earnings are expected to soar 92% but the shares remain cheap, with a forward P/E of just 8.5 and a PEG ratio of 0.95. This Zacks Rank #2 (Buy) also just announced a new $1.6 billion share repurchase program.