5 Cheap Strong Buy Stocks In 2023

person using MacBook Pro on table

Image Source: Unsplash

With a massive first half of the year rally, many are talking about how “expensive” the stock market is. But what if you could buy a top Zacks ranked stock and it was cheap, with attractive valuations?

Screening for Top Ranked Value Stocks

In order to find cheap stocks, screen with a P/E ratio under 20 and a P/S ratio under 1.0. Value investors routinely use both the P/E and P/S ratios to find the cheapness component.

Then add on the Zacks Rank of #1 (Strong Buy). That’s the top Zacks Rank. There are just 238 stocks that have that rank right now. It’s an exclusive club.

When it’s combined with the value criteria, the screen returned 41 stocks. They’re in a bunch of different industries but a few stand out: homebuilders, retailers, and industrials.

5 Cheap Strong Buy Stocks

1.       Builders FirstSource, Inc. (BLDR - Free Report)

Builders FirstSource is a retailer that specializes in the professional building industry. It recently beat on earnings. The shares of Builders FirstSource have jumped 122% year-to-date and were hitting new 5-year highs. Over that 5-year period, they’re up 720%.

Yet Builders FirstSource is still cheap with a forward P/E of 14.

Is Builders FirstSource too hot to handle right now?

2.       Energizer Holdings, Inc. (ENR - Free Report)

Energizer makes batteries. It’s a Zacks Rank #1 (Strong Buy) but it hasn’t yet reported earnings this quarter. Energizer will report on Aug 8, 2023.

Shares of Energizer is up just 8.6% year-to-date. It’s cheap with a forward P/E of 11.4 and it pays a dividend, currently yielding 3.4%.

Should Energizer be on your short list?

3.       The Gap, Inc. (GPS - Free Report)

The Gap is back as a Zacks Rank #1 (Strong Buy). Earnings are expected to rise 262% in fiscal 2023 to $0.65 from a loss of $0.40 last year.

Shares of Gap are down 9% year-to-date. They’re cheap. Gap trades with a price-to-sales ratio of 0.3. A P/S ratio under 1.0 indicates a company is undervalued.

Gap pays a dividend, currently yielding 5.7%. It also has a new CEO.

Should Gap be on your short list?

4.       KB Home (KBH - Free Report)

KB Home’s earnings are expected to be down 31% year-over-year but the analysts have been raising estimates in the last 60 days so KB Home has a Zacks #1 Rank.

Even though shares of KB Home are up 70% year-to-date, it’s still cheap with a forward P/E of 8.7 and a P/S ratio of 0.6.

After the massive rally, is it too late to jump into KB Home?

5.       The Manitowoc Company (MTW - Free Report)

The Manitowoc Company is a leading provider of engineered lifting solutions including hydraulic cranes, boom trucks and tower cranes. This Zacks Rank #1 hasn’t yet reported earnings. The Manitowoc Company will do so on Aug 7, 2023.

Shares of The Manitowoc Company are up 93% year-to-date but it’s still cheap with a forward P/E of just 0.3.

Should The Manitowoc Company be on your short list?

Running Length: 00:16:53

More By This Author:

How Value Investors Can Use The Power Of Compounding
5 Must-See Earnings Charts
Should You Hold A Stock For Forever?

Disclaimer: Neither Zacks Investment Research, Inc. nor its Information Providers can guarantee the accuracy, completeness, timeliness, or correct sequencing of any of the Information on the Web ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.