- (0:45) – Finding Attractive Value Stocks During The Market Sell Off
- (4:30) – Breaking Down Current Valuations On High Flying Growth Stocks: Top Stock Picks
- (19:10) – Episode Roundup: FB, SHOP, PYPL, SNOW, CRWD, LULU, CROX
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Welcome to Episode #266 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks
Value Investor portfolio
, shares some of her top value investing tips and stock picks.
With growth stocks still falling to start 2022, lots of people have been asking Tracey on Twitter if they are now “values.” After all, a stock that is down over 50% must be cheap now, right?
Two Different Ways to Identify Value Stocks
Remember, there are two ways to find “value” stocks.
1. Using classic value fundamentals such as low PEG, P/S, and P/E ratios.
2. Looking at value compared to peers or the industry.
Meta Platforms
FB
, for example, has a forward P/E of 21 which wouldn’t make it “cheap” using traditional value fundamentals.
But compared to the other FANGMAN stocks, Meta Platforms is a value.
Meta Platforms has the lowest P/E among the FANGMAN stocks. It also is trading near the low end of its historic P/E range.
Meta Platforms might be one growth stock that does have value.
Growth Stocks: Values or Traps?
1.
Shopify
SHOP
Shopify was one of the top growth stocks of the last 5 years, with shares rising 1585% during that time.
Who didn’t wish they had gotten in years ago?
But Shopify shares have dropped 45% in the last 6 months, including 35% in 2022 alone.
Is this a buying opportunity in Shopify?
2.
PayPal Holdings, Inc.
PYPL
PayPal has been an investor favorite since its 2015 spin-off from eBay. Over the last 5 years, PayPal shares have gained 306%.
But in the last 6 months, PayPal shares have slid 49%, including losing 16.9% year-to-date.
Are PayPal shares cheap enough for value investors to be taking a look?
3.
Snowflake
SNOW
Snowflake went public during the pandemic, in 2020.
Two years later, Snowflake still doesn’t have a forward P/E because its earnings are still expected to be negative.
Over the last 6 months, Snowflake shares have fallen just 4.5%, but year-to-date they are down 25.3%.
Is Snowflake a value or a trap?
4.
CrowdStrike
CRWD
CrowdStrike has been a popular cybersecurity stock during the pandemic.
Shares of CrowdStrike are up 150% since its 2019 IPO but have fallen 41% in the last 6 months. Year-to-date, they’re down 22.5%.
Has CrowdStrike gotten cheap enough for value investors to take a look?
What Else Do You Need to Know about Growth Stocks Being Values?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of FB in her personal portfolio.]
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