4 Discounted PEG Stocks Offering the Best Returns to Value Investors

Core Insights - The article emphasizes the growing popularity of value investing as investors seek strategies that assess a stock's inherent potential amidst market volatility [1][2] - Warren Buffett's perspective on understanding a stock's "intrinsic value" is highlighted as a means to mitigate common pitfalls in value investing [2] - The article discusses four stocks that have recently performed well under a value investment strategy: Molson Coors Beverage, BioMarin Pharma, Devon Energy, and Jazz Pharmaceuticals [3] Value Investment Strategy - Value investing is gaining traction, but it can lead to "value traps" if investors do not fully understand the strategy [4] - Key metrics for identifying value stocks include dividend yield, P/E ratio, and P/B ratio, which help determine if a stock is undervalued [4] Importance of Earnings Growth - Investors are advised to focus on a stock's earnings growth potential over the next 12 to 24 months to avoid value traps [5] - The PEG ratio, which considers both price/earnings and earnings growth rate, is presented as a valuable metric for assessing intrinsic value [6] Screening Criteria for Value Stocks - Effective screening criteria for identifying promising value stocks include: - PEG Ratio less than industry median - P/E Ratio less than industry median - Zacks Rank 1 or 2 - Market Capitalization greater than $1 billion - Average 20-Day Volume greater than 50,000 - Percentage Change in F1 Earnings Estimate Revisions greater than 5% - Value Score of A or B [7] Featured Stocks - Molson Coors Beverage (TAP): Holds a Zacks Rank 1, Value Score of A, and a five-year expected growth rate of 6.3% [8][9] - BioMarin Pharma (BMRN): Has a Zacks Rank 2, Value Score of B, and a long-term historical growth rate of 77.6% [9][10] - Devon Energy (DVN): Carries a Zacks Rank 2, Value Score of A, and a five-year historical growth rate of 40.1% [10][11] - Jazz Pharmaceuticals (JAZZ): Holds a Value Score of A, Zacks Rank 1, and an expected long-term earnings growth rate of 7.4% [11][12]