4 PEG-Based Value Stocks to Shield Your Portfolio From Trade War

Market Overview - The equity markets in 2025 are experiencing intense volatility due to geopolitical tensions and renewed trade conflicts, particularly influenced by Trump's tariff policies against major economies like China and the European Union, leading to retaliatory measures and disrupted global supply chains [1] - The Federal Reserve's decision to maintain interest rates has thwarted investor expectations for rate cuts, prioritizing inflation control over short-term market stability, which has left investors uncertain about future monetary policy [2] Investor Behavior - Heightened volatility is prompting shifts in investor behavior, with many re-evaluating portfolio strategies; historically, investors tend to favor value investing during such times, seizing opportunities to buy undervalued stocks as others sell at lower prices [3] Value Investing Strategy - Simple value investing can lead to value traps if not executed with diligence; stocks may appear undervalued based on traditional metrics, but if the underlying business is deteriorating, it may result in poor investment choices [5] - To avoid value traps, it is crucial to assess a stock's earnings growth potential over the next 12 to 24 months, with the PEG ratio being a significant metric for value investors [6] PEG Ratio Insights - The PEG ratio is defined as (Price/Earnings)/Earnings Growth Rate, with a low PEG ratio being preferable for value investors; it helps identify the intrinsic value of a stock, although it has limitations regarding changing growth rates [7] Screening Criteria for Value Stocks - Effective PEG-based investing should consider additional parameters, including a PEG ratio less than the industry median, a P/E ratio below the industry median, a Zacks Rank of 1 or 2, market capitalization greater than $1 billion, average 20-day volume over 50,000, and upward earnings estimate revisions greater than 5% [8][9] Stock Picks - General Motors (GM) has a Zacks Rank of 2, a Value Score of A, and a five-year historical growth rate of 14.2% [11] - Expedia Group (EXPE) has a Zacks Rank of 2, a Value Score of B, and a long-term expected growth rate of 18.2% [12] - Phibro Animal Health (PAHC) boasts a Zacks Rank of 1, a Value Score of A, and a five-year expected growth rate of 26.2% [14] - Pilgrim's Pride (PPC) has a Zacks Rank of 1, a Value Score of A, and a long-term expected growth rate of 48.2% [15]