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Zacks Value Investor Highlights: Greenbrier, Helen of Troy, Lithia Motors, Copa Holdings S.A. and TrueBlue
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For Immediate Release
Chicago, IL –March 2, 2018 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: (https://www.zacks.com/stock/news/294127/how-to-invest-better-than-warren-buffett)
How to Invest Better than Warren Buffett
Welcome to Episode #83 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.
It’s a big time of the year for value investors as Berkshire Hathaway’s Annual Letter to Shareholders was recently released.
For value investors, it’s like the Super Bowl and World Series all rolled into one. Berkshire’s Chairman, Warren Buffett, has also made the rounds of various television stations, including CNBC, for his customary question and answer segments so value fans can absorb even more of his investing wisdom.
Berkshire Has Over $100 Billion in Cash
Berkshire ended 2017 with a cash hoard of $116 billion, which was also boosted by the corporate tax cuts.
With that much cash on hand, it’s not surprising that Buffett talked about doing big acquisitions. He also said that they would be patient and wait to find the right deals.
Berkshire’s “Problem”
But the incredible cash hoard only amplified the “problem” that Berkshire and Buffett have had for several years.
With that much cash on hand, they are mostly restricted to what Buffett said: big acquisitions. Additionally, they’re pretty much restricted from taking an equity position in nearly all companies except the largest ones.
It’s not surprising, therefore, that they own companies like Apple. More recently, Berkshire also added $19 billion market cap Teva to their portfolio.
But being that large, and having that much cash, means they really can’t buy into most small or mid-cap companies. Additionally, they could buy some small and mid-caps outright, but it would be impractical, and would barely put a dent in the $116 billion stash of cash.
They’re unlikely to buy, say, 100 small cap companies in order to put the $116 billion in cash to use.
If Only Buffett Could Buy Small and Mid-Caps Again
But regular value investors don’t have Buffett’s problem. They’re not limited to only the big caps. The world is their investing oyster.
Tracey ran a screen looking for companies with a market cap under $10 billion, a Zacks Rank of #1 (Strong Buy) or #2 (Buy), a forward P/E under 15 and a P/B ratio under 3.0.
She got a healthy list of 190 stocks.
Which have Buffett characteristics such as a moat or a strong brand?
5 Stocks That Buffett Probably Wishes He Could Buy
1. The Greenbrier Companies, Inc. (GBX - Free Report) makes rail cars. Berkshire already owns a railroad so it makes sense that they buy the equipment maker too. Greenbrier has a market cap of just $1.5 billion and a forward P/E of 12.8. And even though Berkshire doesn’t pay a dividend itself, it doesn’t mind collecting them. Greenbrier has a dividend yield of 1.7%.
2. Helen of Troy Ltd. (HELE - Free Report) owns many of the brands that people use every day including the OXO brand which makes cooking utensils and gadgets and is popular for cooks, Vicks, Braun, Revlon, Hot Tools, Pert shampoo and Brut cologne among others. It has a market cap of just $2.5 billion and trades with a forward P/E of 13.
3. Lithia Motors, Inc. (LAD - Free Report) owns auto dealerships around the United States. Berkshire Hathaway already bought a privately held dealership company a few years ago but Lithia is one of the largest with a market cap of $2.7 billion. It’s cheap, with a forward P/E of just 10.5. Investors also get a dividend, yielding 1%.
4. Copa Holdings S.A. (CPA - Free Report) is one of the largest Central American airlines. Based out of Panama, it is expanding in the growing Colombia and Brazil markets. Berkshire already owns shares in several US airlines but no foreign airlines. It has a market cap fo $6.2 billion and is expected to grow earnings by 20% in 2018.
5. TrueBlue, Inc. (TBI - Free Report) is a niche staffing company which provides industrial staffing in the United States, Canada and Puerto Rico. It generated $78 million in free cash flow in 2017 and is cheap, with a forward P/E of just 12.7. TrueBlue is a small cap, with a market cap of just $1.1 billion.
In addition to these five stocks, the screen also gave a dozen small banks and home builders, both of which continue to be cheap.
What else should you know about investing better than Buffett?
Tune into this week’s podcast to find out.
Don’t Even Think About Buying Bitcoin Until You Read This
The most popular cryptocurrency skyrocketed last year, giving some investors the chance to bank 20X returns or even more. Those gains, however, came with serious volatility and risk. Bitcoin sank 25% or more 3 times in 2017.
Zacks’ has just released a new Special Report to help readers capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
Zacks Restaurant Recommendations:In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Value Investor Highlights: Greenbrier, Helen of Troy, Lithia Motors, Copa Holdings S.A. and TrueBlue
For Immediate Release
Chicago, IL –March 2, 2018 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: (https://www.zacks.com/stock/news/294127/how-to-invest-better-than-warren-buffett)
How to Invest Better than Warren Buffett
Welcome to Episode #83 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.
It’s a big time of the year for value investors as Berkshire Hathaway’s Annual Letter to Shareholders was recently released.
For value investors, it’s like the Super Bowl and World Series all rolled into one. Berkshire’s Chairman, Warren Buffett, has also made the rounds of various television stations, including CNBC, for his customary question and answer segments so value fans can absorb even more of his investing wisdom.
Berkshire Has Over $100 Billion in Cash
Berkshire ended 2017 with a cash hoard of $116 billion, which was also boosted by the corporate tax cuts.
With that much cash on hand, it’s not surprising that Buffett talked about doing big acquisitions. He also said that they would be patient and wait to find the right deals.
Berkshire’s “Problem”
But the incredible cash hoard only amplified the “problem” that Berkshire and Buffett have had for several years.
With that much cash on hand, they are mostly restricted to what Buffett said: big acquisitions. Additionally, they’re pretty much restricted from taking an equity position in nearly all companies except the largest ones.
It’s not surprising, therefore, that they own companies like Apple. More recently, Berkshire also added $19 billion market cap Teva to their portfolio.
But being that large, and having that much cash, means they really can’t buy into most small or mid-cap companies. Additionally, they could buy some small and mid-caps outright, but it would be impractical, and would barely put a dent in the $116 billion stash of cash.
They’re unlikely to buy, say, 100 small cap companies in order to put the $116 billion in cash to use.
If Only Buffett Could Buy Small and Mid-Caps Again
But regular value investors don’t have Buffett’s problem. They’re not limited to only the big caps. The world is their investing oyster.
Tracey ran a screen looking for companies with a market cap under $10 billion, a Zacks Rank of #1 (Strong Buy) or #2 (Buy), a forward P/E under 15 and a P/B ratio under 3.0.
She got a healthy list of 190 stocks.
Which have Buffett characteristics such as a moat or a strong brand?
5 Stocks That Buffett Probably Wishes He Could Buy
1. The Greenbrier Companies, Inc. (GBX - Free Report) makes rail cars. Berkshire already owns a railroad so it makes sense that they buy the equipment maker too. Greenbrier has a market cap of just $1.5 billion and a forward P/E of 12.8. And even though Berkshire doesn’t pay a dividend itself, it doesn’t mind collecting them. Greenbrier has a dividend yield of 1.7%.
2. Helen of Troy Ltd. (HELE - Free Report) owns many of the brands that people use every day including the OXO brand which makes cooking utensils and gadgets and is popular for cooks, Vicks, Braun, Revlon, Hot Tools, Pert shampoo and Brut cologne among others. It has a market cap of just $2.5 billion and trades with a forward P/E of 13.
3. Lithia Motors, Inc. (LAD - Free Report) owns auto dealerships around the United States. Berkshire Hathaway already bought a privately held dealership company a few years ago but Lithia is one of the largest with a market cap of $2.7 billion. It’s cheap, with a forward P/E of just 10.5. Investors also get a dividend, yielding 1%.
4. Copa Holdings S.A. (CPA - Free Report) is one of the largest Central American airlines. Based out of Panama, it is expanding in the growing Colombia and Brazil markets. Berkshire already owns shares in several US airlines but no foreign airlines. It has a market cap fo $6.2 billion and is expected to grow earnings by 20% in 2018.
5. TrueBlue, Inc. (TBI - Free Report) is a niche staffing company which provides industrial staffing in the United States, Canada and Puerto Rico. It generated $78 million in free cash flow in 2017 and is cheap, with a forward P/E of just 12.7. TrueBlue is a small cap, with a market cap of just $1.1 billion.
In addition to these five stocks, the screen also gave a dozen small banks and home builders, both of which continue to be cheap.
What else should you know about investing better than Buffett?
Tune into this week’s podcast to find out.
Don’t Even Think About Buying Bitcoin Until You Read This
The most popular cryptocurrency skyrocketed last year, giving some investors the chance to bank 20X returns or even more. Those gains, however, came with serious volatility and risk. Bitcoin sank 25% or more 3 times in 2017.
Zacks’ has just released a new Special Report to help readers capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 4 crypto-related stocks now >>
Zacks Restaurant Recommendations:In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
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https://www.zacks.com/performance
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.