5 Profitable PEG-Based Value Stocks for Investors

Core Insights - Value investing is gaining traction in a market facing external shocks, with notable success from investors like Warren Buffett, who achieved over 20% CAGR for Berkshire Hathaway from 1965 to 2022, compared to a 10% rise in the S&P 500 Index during the same period [1] Group 1: Value Investing Metrics - The PEG ratio, defined as (Price/Earnings)/Earnings Growth Rate, is a crucial metric for value investors, as a low PEG ratio is preferable for identifying intrinsic value [3] - Commonly used metrics like P/E, P/B, and dividend yield may lead to "value traps," where stocks underperform despite appearing discounted [2][3] Group 2: Screening Criteria for Value Stocks - Effective screening criteria for value stocks include 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 exceeding 50,000, and upward revisions in earnings estimates greater than 5% [4] Group 3: Highlighted Stocks - American Eagle Outfitters (AEO): A specialty retailer with a Zacks Rank of 1, Value Score of A, and a five-year expected growth rate of 12.5% [5] - Air Lease Corporation (AL): An aircraft leasing company with a Zacks Rank of 2, Value Score of A, and a long-term expected growth rate of 11.7% [6] - Dell Technologies (DELL): A provider of IT solutions with a Zacks Rank of 2, Value Score of A, and a long-term expected growth rate of 12% [7] - Universal Health Services (UHS): Operates various healthcare facilities with a Zacks Rank of 2, Value Score of A, and a historical growth rate of 14.5% [7] - PagSeguro Digital (PAGS): Provides financial technology solutions with a Zacks Rank of 1, Value Score of A, and a historical growth rate of 14.3% [8]