5 Dirt Cheap 'Strong Buy' Stocks

• (0:20) - Stocks Continue To Become Cheaper: Is It Time To Buy?
• (3:05) - Tracey’s Top Stock Picks: Best Of The Cheap Stocks
• (11:45) - Takeaways On The Pullback
• (13:50) - Episode Roundup: GM, CC, M, MU, VALE
• Podcast@Zacks.com

Welcome to Episode #86 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.

What a difference a few weeks can make. The FANG stocks went from hitting new all-time highs to being in bear market territory in short order.

But their sell off has created a value stock buying opportunity. It has pulled down the rest of the stock market resulting in a stock sale.

Why not take a look at the best of the cheap stocks while you have a chance?

Screening for Cheap Zacks #1 Rank Stocks

Anyone can buy a cheap stock. But why not buy one that also is a Zacks Rank #1 (Strong Buy)?

This is an exclusive club. Currently, there are only 223 Zacks Rank #1 stocks out of the entire Zacks universe of coverage, which is about 4400 stocks.

Tracey then added a forward P/E under 10 in order to get the super cheap stocks.

Thirty stocks qualified, which isn’t too bad given that cheap stocks have been pretty rare in 2018.

Here are 5 that she thought were the most interesting.

5 Dirt Cheap ‘Strong Buy’ Stocks

1. General Motors (NYSE:GM) has been cheap for a while. It trades with a forward P/E of 5.8 and has a PEG of 0.7. But 2018 estimates show an earnings decline, which is a red flag. Is GM a value trap?
2. The Chemours Company (NYSE:CC) is a global chemical company that was spun-off from DuPont (NYSE:DWDP) in 2015. It has a forward P/E of just 9 and it’s expected to grow earnings by 38.7% in 2018. It’s got that rare combination of growth and value yet few are talking about it. That’s a sign of a classic value stock.
3. Macy’s (M is off its 2017 lows and is still cheap with a forward P/E of just 7.7. But earnings are expected to decline 3.7% in fiscal 2018 even though analysts have been raising estimates. Investors still get the 5.3% dividend yield, however. Is it a value trap?
4. Micron (NASDAQ:MU) has been a perennial favorite on the “value stock or trap” podcasts. It’s still cheap, with a forward P/E of just 5.1. The analysts liked what they heard in the last earnings call, as 7 estimates are higher since then for fiscal 2018 and 4 are higher for fiscal 2019. But is it starting to show signs of a being a value trap?
5. Vale (NYSE:VALE) is a Brazilian iron ore and nickel miner. Shares have fallen over 4% in 2018 and are still cheap, with a forward P/E of just 8.6. Earnings are expected to rise 9% in 2018. Should you be looking outside the US for your bargain stocks?

These are the best of the cheap stocks.

There are other stocks with P/Es as low as 2 and 3.

But just because they’re cheap, that doesn’t mean you should be investing in them.

The Zacks #1 Rank gives you an edge. It means that the analysts are in agreement about the earnings estimates: that they are rising.

What else should you know about buying cheap strong buy stocks?

Tune into this week’s podcast to find out.

Breaking News: Cryptocurrencies Now Bigger than Visa

The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.

Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.

Click here to access these stocks. >>