The 2 Best Value Stocks To Buy Right Now

This has been one of the stock market's most unpredictable years ever. With stocks swinging dramatically higher and lower all year and uncertainty at all-time highs, investors aren't sure whether to buy or keep their powder dry.

But it's actually the perfect time to buy value stocks.

You see, growth stocks have been all the rage during the summer bull market rally. But as the market plateaus and volatility rises heading into the fall, value stocks are becoming the real stars.

Warren Buffett once said that value and growth are joined at the hip. While truer words have never been spoken, too many investors have forgotten them.

But we can't blame them with how many misconceptions there are about value stocks.

Buying a bunch of dying or sick companies at low multiples is not value.

Buying the lower values of the S&P 500 index is not value investing either. That's really just another form of indexing.

Finding those stocks that offer great value at current prices and have the potential for strong growth in the future is very challenging. It takes a lot of work to find them. Then the hard part happens. That's waiting for the broader markets to recognize the growth potential and begin buying the stock.

Fortunately, you're not doing it alone. I've done the research to find the best value stocks – companies whose share prices make them excellent growth candidates.

And because pricing has been so distorted by the coronavirus and Fed intervention, I've found a lot of opportunity here.

So instead of waiting for another breakout rally to ride overpriced tech stocks higher, take advantage of the opportunity in front of us with the top value stocks…

One of the Best Value Stocks in Home Building

Beazer Homes USA Inc. (NYSE: BZH) is a great example of a great value stock in a weird market. Shares of Beazer have almost doubled off the lows but are still a bargain.

Beazer shares are trading at just 73% of book value right now and just 11 times earnings. This in spite of the fact that the earnings estimate for this company has been raised recently in dramatic fashion.

Analysts now expect a 60% increase in earnings per share for the homebuilder in 2021.

That's the third estimate increase in the last 90 days for Beazer. This is in large part because Beazer has posted monster positive earning surprises in the past three quarters.

Those are the attributes of a great growth stock over a plain old value stock.

It's also in one of the hottest markets right now thanks to the pandemic.

We have a huge housing shortage in the United States. We had one before the pandemic began. The desire of many people to escape the coronavirus has many people fleeing big cities in search of suburban homes. With mortgage interest rates at all-time lows, more and more people are taking the plunge.

With operations in many of the sunbelt and coastal states that are top big-city escape destinations, Beazer should see strong business trends for a long time.

The Best Value Stocks Are in High Growth Sectors

Titan Machinery Inc. (NASDAQ: TITN) is another case of buying what could be a high-growth business at low multiples of asset value and earnings power. Titan Machinery owns and operates a network of full service agricultural and construction equipment dealer locations in North America and Europe.

While there were fears of a coronavirus slowdown that never really materialized for this company, the company just posted a big earnings surprise, and analysts have been raising their estimates of profits next year.

Titan agricultural machinery is for use in the production of food, fiber, feed grain, and renewable energy. The machines are also used home and garden applications, as well as maintenance of commercial, residential, and government properties.

None of this has really been slowed down by the coronavirus. People have to eat, and grass has to be cut.

Titan's construction equipment business sells heavy construction machinery, light industrial machinery for commercial and residential construction, road and highway construction machinery, and mining operations equipment.

Again, all necessary operations that are not going to shut down during a pandemic.

The increase in homeownership and the need for infrastructure spending across the United States is going to keep creating demand for Titans products. Analysts expect this company to grow its earnings by 25% a year for the next five years.

In spite of this, we can buy Titan at bargain prices. The stock trades for just 79% of book value and 12 times forward earnings projection.

As is the case with Beazer, we are buying growth stock potential at value stock prices.

That is the secret to successful value investing.

Disclosure: None.

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