6 Stocks Still Trading Cheap In Today's Market
Zacks Investment Research | Jul 15, 2016 03:58AM ET
The Dow Jones Industrial Average (DJI) hit a 52-week high yesterday, closing at $18,506.41 while the Standard & Poor’s 500, which was rising of late, closed the last trading session at $2,163.75, a little lower than its last 52-week high of $2,168.99.
Since the beginning of 2016, markets were plagued by a number of macroeconomic factors that caused widespread volatility. Fortunes, however, turned around recently, with an improvement in job numbers, rebounding oil prices, negligible impact of Brexit on the U.S. market and low volatility in the markets, as indicated by the CBOE Volatility Index (VIX). In fact, so far this year, the DJI and the S&P 500 have improved a respective 6.2% and 5.9%.
Investment Strategy: Go for Value
Finding the right stocks to invest in is always a challenge. It is more so with an uncertain second-quarter earnings season around the corner. At this juncture, knowing the right investment strategy is no mean feat. We believe it is time to let go of your fascination for popular stocks and instead focus on the ones that are trading below their fair value. Investing in cheap stocks is probably the best option right now, seeing that they are both safe and profitable.
This is known as value investing, and since the emphasis is on cheap stocks with steady growth and solid price momentum, the strategy offers compelling prospects.
Why Value Investing
Investors usually have a negative impression about cheap stocks. However, they are not always a bad idea. Sometimes, stocks trade lower than their fair value because of temporary negative factors. In fact, stocks that have a low price/earnings or P/Es ratio, an impressive outlook, a decent dividend payment history and high returns are a worthy choice for value investors. These stocks are usually a darling for risk-averse investors who can’t afford to buy high-priced stocks during phases of high volatility.
Picking Such Stocks
It’s never easy to find stocks that offer great value but are trading cheap at the moment. Here, we have used our latest Zacks Investment Research
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