3 Top-Ranked Stocks Suited For Value Investors

Value investing is centered around jumping on stocks trading at a discount, with the idea that the market will eventually ‘catch up’ and recognize their true value, which can lead to serious gains.

After all, who doesn’t love a good deal?

And the strategy can become even more lucrative when adding in the Zacks Rank.

Three top-ranked stocks trading at enticing valuation levels – Celestica (CLS), Molson Coors (TAP), and Flex (FLEX) – could all be worthy additions to any value-focused investor’s watchlist.

Let’s take a closer look at all three.

 

Celestica

Celestica, a Zacks Rank #2 (Buy), is one of the world's largest electronics manufacturing services companies, serving the computer and communications sectors. Analysts have taken their earnings expectations higher across the board, with the revisions trend particularly bullish for its current year, up 19% over the last year.

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Zacks Investment Research

Image Source: Zacks Investment Research

The company boasts an inspiring growth profile, with earnings forecasted to climb 24% in its current year (FY23) on 9% higher revenues. And looking ahead to FY24, estimates allude to a 13% boost in earnings paired with a 6.5% sales increase.

Shares aren’t expensive given the company’s forecasted growth, with the current 0.4X forward price-to-sales ratio (F1) nicely beneath its Zacks industry average of 1.7X. The stock sports a Style Score of “A” for Value.

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Zacks Investment Research

Image Source: Zacks Investment Research

 

Molson Coors

As one of the largest global brewers, Molson Coors has spent centuries defining brewing greatness. The stock is currently a Zacks Rank #1 (Strong Buy), with expectations drifting higher across nearly all timeframes.

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Zacks Investment Research

Image Source: Zacks Investment Research

Shares presently trade at a 1.1X forward price-to-sales ratio, in line with the five-year median and nowhere near the average of the respective Zacks – Beverages industry. In addition, the current forward earnings multiple (F1) of 11.2X is well beneath the five-year median and the respective Zacks industry average.

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Zacks Investment Research

Image Source: Zacks Investment Research

Investors also stand to reap a passive income stream, with TAP shares currently yielding a solid 2% annually paired with a sustainable payout ratio sitting at 30% of earnings.

 

Flex

Flex, a current Zacks Rank #1 (Strong Buy), is a provider of 'Sketch-to-Scale' services to original equipment manufacturers. Analysts have moved their expectations higher across multiple timeframes.

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Zacks Investment Research

Image Source: Zacks Investment Research

FLEX shares presently trade at a 10.3X forward earnings multiple, beneath the 12.1X five-year median and five-year highs of a steep 43.9X. And the current forward price-to-sales ratio works out to be 0.4X, again beneath the respective Zacks - Electronics industry average.

(Click on image to enlarge)

Zacks Investment Research

Image Source: Zacks Investment Research

 

Bottom Line

Value investors are always looking for deals, expecting the rest of the crowd to eventually catch onto the discounts and lead to significant gains.

And when you pair this strategy with the Zacks Rank, which is focused on earnings estimate revisions, it’s much easier to find mispriced stocks with great near-term potential.

All three stocks above – Celestica, Molson Coors, and Flex – could be watchlist considerations.


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