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How to Find the Best Small Cap Value Stocks

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  • (0:45) - Small Cap Stocks Continues To Perform Well: Is Now A Good Time To Invest?
  • (4:30) - Is Buying An ETF The Best Way To Gain Exposure?
  • (12:45) - Tracey’s Top Stock Picks
  • (29:50) - Episode Roundup: RZV, CAL, HVT, EXPR, TITN, JAKK, RCMT


Welcome to Episode #251 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.

With small cap stocks weak over the last 3 months, now may be the perfect time to create a watch list of top small cap value stocks.

Small cap value has historically been the best performing asset class. Growth has gotten all the glory the past 5 years, but small cap value has still seen its share of rallies over that time period.

With so many small caps now cheap, why not check for some buying opportunities?

Screening for Small Cap Value has predefined screens in its screening tools which includes screens based on market cap.

There is a screen called “Small Caps with Big Growth” which includes stocks with both growth but that also have low valuations.

It uses a price-to-sales ratio under 1.0, which indicates value, to weed out the low valuation stocks.

But it also combined it with a Zacks Rank of #1 (Strong Buy) or #2 (Buy), a share price over $5, average volume over 100,000 shares, and year-over-year growth over 20%.

This screen produced 29 stocks.

5 Small Cap Value Stocks to Keep on Your Watch List

1.       Caleres (CAL - Free Report) is a specialty retailer with over 1000 retail locations in 68 countries. Its brands include Famous Footwear, Sam Edelman, Naturalizer, Allen Edmonds, Vionic and Dr. Scholl’s Shoes. It’s trading with a P/S ratio of just 0.3 and also rewards shareholders with a dividend, currently yielding 1.3%.

2.       Haverty Furniture (HVT - Free Report) is a furniture retailer with 100 showrooms in 16 states. Furniture has been red hot during the pandemic but Haverty’s shares have fallen about 30% in the last 3 months. It’s dirt cheap with a P/S ratio of just 0.7 and a forward P/E of just 6.8. It’s also shareholder friendly with a $25 million share buyback program and a dividend, currently yielding 3%.

3.       Express (EXPR - Free Report) is an apparel and accessory specialty retailer with both brick and mortar and e-commerce sales. Shares have soared 489% this year on the rebound in apparel as people head back to school and to work. It trades with a P/S ratio of just 0.2.

4.       Titan Machinery (TITN - Free Report) operates 109 agriculture and construction equipment stores in the United States and Europe. In the second quarter, Titan said that equipment demand momentum was continuing. Shares have fallen nearly 12% in the last 3 months. It’s cheap with a P/S ratio of just 0.4.

5.       JAKKS Pacific (JAKK - Free Report) is a toy manufacturer including brands such as Black + Decker, Apex Legends and Disguise, among others. Second quarter sales were up 18% versus 2019’s results, which were pre-pandemic. Shares have fallen about 8% in the last 3 months and remain cheap with a P/S ratio of just 0.2.

What else do you need to know about small cap value stocks?

Listen to this week’s podcast to find out.

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