We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Welcome to Episode #334 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Are there ANY value stocks out there? With the spotlight still on technology and growth stocks, it can seem like value is an endangered species.
Screening for Cheap Stocks
But running a basic screen for stocks with a price-to-sales (P/S) ratio under 1.0, which usually indicates a company is undervalued, returns 1862 companies. That’s a lot of value stocks.
Large caps continue to be favored by investors in 2023, so if you add stocks that have a $10 billion market cap or higher to the screen, you still get 176 companies. That’s also a lot of value stocks.
Adding the Zacks Rank of #1 (Strong Buy), the highest of the Zacks Rank, of which there are only about 230 stocks at any one time, gives you just 11 stocks.
Where are the Value Stocks?
But surprisingly, more than half of those in the final screen were Japanese companies. In 2023, Warren Buffett went to Japan to talk to some of the companies he had been investing in, one of which appears below. Buffett said in an interview with CNBC that the Japanese trading companies were just too cheap to ignore.
Berkshire Hathaway continues to invest cash in 5 of the trading companies. But there are other Japanese companies that are as cheap as those that Berkshire owns.
Canon makes cameras, inkjet and laser printers, and medical equipment among other products. It continues to see demand remain firm as the global economy recovers from the supply chain issues.
Shares of Canon are up 23% year-to-date but remain cheap. It has a P/S ratio of just 0.9 and a forward P/E of 13.7.
Canon has targeted its dividend payout at 50%. It currently yielding 3.3%.
Mitsubishi Electric has a market cap of $29 billion. It makes electrical and electronic products. Fiscal 2024 earnings are expected to rise 17.3% to $0.88 from $0.75 last year.
Shares of Mitsubishi Electric are up 40% year-to-date but, yes, are still cheap. It has a price-to-sales ratio of just 0.8 and a forward P/E of just 15.6.
Sumitomo is a large integrated trading company with 6 business units. It is one of the companies that Berkshire Hathaway has invested in.
Its business units include metal products such as steel and tubes, transportation and construction systems, infrastructure including water and airports, media such as Japan’s largest cable TV operator, supermarkets and construction in Japan of office buildings and residential, as well as mineral resources, oil and natural gas and chemicals.
Sound familiar? Now you can see why Buffett took such an interest in these trading companies.
Shares of Sumitomo are up 30% year-to-date. It remains dirt cheap, with a P/S ratio of 0.5 and a forward P/E of 7.6. Sumitomo also pays a dividend, yielding 1.6% on Zacks.com but 4.3% on YahooFinance.
Should Sumitomo be on your short list?
5. Panasonic Holdings Inc.
Panasonic manufactures home appliances, domestic equipment, systems for manufacturing and logistics, batteries and electronic components. It was founded in 1918.
Earnings are expected to rise 9.5% in fiscal 2024 with the Zacks Consensus looking for $0.92 versus just $0.84 last year.
Shares of Panasonic are up 44% year-to-date. But, of course, it’s still cheap. Panasonic trades with a P/S ratio of just 0.5 and has a forward P/E of 12.9. It pays a dividend with a yield of 1.3%.
Should Panasonic be high on your short list?
What Else Should You Know About Cheap Large Cap Stocks in 2023?
Tune into this week’s podcast to find out.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Looking for Dirt-Cheap Large Cap Stocks?
Welcome to Episode #334 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Are there ANY value stocks out there? With the spotlight still on technology and growth stocks, it can seem like value is an endangered species.
Screening for Cheap Stocks
But running a basic screen for stocks with a price-to-sales (P/S) ratio under 1.0, which usually indicates a company is undervalued, returns 1862 companies. That’s a lot of value stocks.
Large caps continue to be favored by investors in 2023, so if you add stocks that have a $10 billion market cap or higher to the screen, you still get 176 companies. That’s also a lot of value stocks.
Adding the Zacks Rank of #1 (Strong Buy), the highest of the Zacks Rank, of which there are only about 230 stocks at any one time, gives you just 11 stocks.
Where are the Value Stocks?
But surprisingly, more than half of those in the final screen were Japanese companies. In 2023, Warren Buffett went to Japan to talk to some of the companies he had been investing in, one of which appears below. Buffett said in an interview with CNBC that the Japanese trading companies were just too cheap to ignore.
Berkshire Hathaway continues to invest cash in 5 of the trading companies. But there are other Japanese companies that are as cheap as those that Berkshire owns.
5 Dirt-Cheap Large Cap Top Ranked Stocks
1. Canon Inc. (CAJPY - Free Report)
Canon makes cameras, inkjet and laser printers, and medical equipment among other products. It continues to see demand remain firm as the global economy recovers from the supply chain issues.
Shares of Canon are up 23% year-to-date but remain cheap. It has a P/S ratio of just 0.9 and a forward P/E of 13.7.
Canon has targeted its dividend payout at 50%. It currently yielding 3.3%.
Should Canon be on your short list?
2. Subaru Corp. (FUJHY - Free Report)
Subaru is a Japanese automaker. In 2023, it launched its first EV, the Subaru Solterra. Earnings are expected to rise 32% this year.
Shares of Subaru are up 23.9% year-to-date but it, too, is still cheap. It has a P/S ratio of only 0.5 and a dirt-cheap forward P/E of 7.1.
Subaru pays a dividend yielding 1.8%.
Should this Japanese automaker be on your short list?
3. Mitsubishi Electric Corp. (MIELF - Free Report)
Mitsubishi Electric has a market cap of $29 billion. It makes electrical and electronic products. Fiscal 2024 earnings are expected to rise 17.3% to $0.88 from $0.75 last year.
Shares of Mitsubishi Electric are up 40% year-to-date but, yes, are still cheap. It has a price-to-sales ratio of just 0.8 and a forward P/E of just 15.6.
It also pays a dividend, yielding 3.8%.
Is Mitsubishi Electric a hidden value gem?
4. Sumitomo Corp. (SSUMY - Free Report)
Sumitomo is a large integrated trading company with 6 business units. It is one of the companies that Berkshire Hathaway has invested in.
Its business units include metal products such as steel and tubes, transportation and construction systems, infrastructure including water and airports, media such as Japan’s largest cable TV operator, supermarkets and construction in Japan of office buildings and residential, as well as mineral resources, oil and natural gas and chemicals.
Sound familiar? Now you can see why Buffett took such an interest in these trading companies.
Shares of Sumitomo are up 30% year-to-date. It remains dirt cheap, with a P/S ratio of 0.5 and a forward P/E of 7.6. Sumitomo also pays a dividend, yielding 1.6% on Zacks.com but 4.3% on YahooFinance.
Should Sumitomo be on your short list?
5. Panasonic Holdings Inc.
Panasonic manufactures home appliances, domestic equipment, systems for manufacturing and logistics, batteries and electronic components. It was founded in 1918.
Earnings are expected to rise 9.5% in fiscal 2024 with the Zacks Consensus looking for $0.92 versus just $0.84 last year.
Shares of Panasonic are up 44% year-to-date. But, of course, it’s still cheap. Panasonic trades with a P/S ratio of just 0.5 and has a forward P/E of 12.9. It pays a dividend with a yield of 1.3%.
Should Panasonic be high on your short list?
What Else Should You Know About Cheap Large Cap Stocks in 2023?
Tune into this week’s podcast to find out.