4 Top-Rated Value Stocks to Buy Based on Discounted PEG

Core Viewpoint - Value investing is gaining traction in a market facing external shocks, with notable success from investors like Warren Buffett, who achieved a 19.8% CAGR for Berkshire Hathaway from 1965 to 2023, compared to a 10.2% rise in the S&P 500 during the same period [1] Group 1: Value Investing Strategy - The PEG (Price/Earnings to Growth) ratio is highlighted as an effective metric for identifying value stocks, as it considers both price and growth potential [4][5] - Traditional metrics like P/E, P/B, and dividend yield may lead to "value traps," where stocks underperform despite appearing undervalued [4][3] - A low PEG ratio is preferred for value investors, as it helps in determining a stock's intrinsic value [5] Group 2: Screening Criteria for Value Stocks - Recommended screening criteria for selecting value stocks include a PEG ratio less than the industry median, a P/E ratio below the industry median, and a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [6] - Additional criteria include a market capitalization greater than $1 billion, an average 20-day trading volume exceeding 50,000, and upward revisions in earnings estimates greater than 5% [7] Group 3: Selected Stocks - Alaska Air Group (ALK): Serves over 120 cities in North America, has a Zacks Rank of 1, a Value Score of A, and a five-year expected growth rate of 16.8% [8][9] - ZIM Integrated Shipping Services (ZIM): Provides container shipping services with a Zacks Rank of 1, a Value Score of A, and a long-term expected growth rate of 47.4% [10] - PayPal (PYPL): A leading online payment provider with a Zacks Rank of 1, a Value Score of B, and a long-term expected growth rate of 15.9% [11][12] - Yelp Inc. (YELP): Offers a platform for consumer-business connections, with a Zacks Rank of 1, a Value Score of A, and a historical growth rate of 31.4% [13][14]