4 High-Earnings Yield Value Picks Ahead of Potential Fed Rate Cut

Core Insights - Major U.S. stock market indices reached record highs as investors anticipate the Federal Reserve's policy decision, with the S&P 500 climbing 0.23% to 6,890.89, briefly surpassing the 6,900 mark for the first time [1][10] - The Federal Reserve is expected to announce a quarter-point rate cut, with potential additional cuts in the future, despite a slight increase in September inflation [2] - Value investing is gaining traction in the current economic uncertainty, focusing on stocks priced below their intrinsic value [3][10] Market Overview - The Dow, S&P 500, and Nasdaq all achieved new highs, indicating strong investor sentiment [1] - Analysts believe the Fed will prioritize supporting a softening labor market over controlling inflation, although missing economic data due to the government shutdown may complicate policy signals [2] Investment Strategy - Value investing emphasizes purchasing undervalued stocks, which can provide opportunities for profit as markets often misprice stocks [3] - Companies with solid fundamentals and reasonable valuations are highlighted as potential investment opportunities [4] Earnings Yield Metric - Earnings yield is a key metric for value investors, calculated as (Annual Earnings per Share/Market Price) x 100, and serves as a comparison tool against bond returns [5][6] - A high earnings yield may indicate that a stock is undervalued, while a low yield could suggest overvaluation [5] Stock Screening Criteria - The primary screening criterion is an Earnings Yield greater than 10%, supplemented by estimated EPS growth and average daily volume [7][8] - Additional filters include a current price of at least $5 and a Zacks Rank of 1 (Strong Buy) or 2 (Buy) for stock selection [9] Selected Value Stocks - Aura Minerals Inc. (AUGO) is focused on gold and base metal projects, with projected earnings growth of 120.3% and 165.6% for 2025 and 2026, respectively [11] - Commercial Metals Company (CMC) anticipates sales and earnings growth of 5% and 73% for fiscal 2026 [12] - Par Pacific Holdings (PARR) projects significant earnings growth of 951% and 24% for 2025 and 2026 [13] - CorMedix Inc. (CRMD) expects earnings growth of 717% and 34% for 2025 and 2026 [14]