4 value stocks to buy as growth investing falters: Prime Minister award-winning
- Andrew Walker, a portfolio manager who won the Sohn Ideas Competition, is looking for deep value.
- Value stocks have held up better than growth stocks so far in 2022 as interest rates rise.
- Here are four heavily discounted value stocks Walker is bullish on.
Hunting undervalued stocks is Andrew Walker’s specialty. That’s how the Rangeley Capital portfolio manager spends a lot of his time – both in his day-to-day work and as the mind behind Yet Another Value Blog, his investment newsletter.
It’s also how Walker won the prestigious Sohn Idea Contest, an annual competition among finance professionals to pitch the most compelling investment idea to Wall Street legends, such as hedge fund mogul Bill Ackman. .
Walker’s recommended stock, La Quinta Inn & Suites, rose about 11% in the three months since its launch until it ceased operations following its acquisition by Wyndham Hotels & Resorts. The real estate investment trust created by La Quinta, CorePoint Lodging, grew nearly 44% in the four years before its acquisition, as Walker predicted.
Much has changed in the markets since Walker won the Sohn Ideas Competition in 2018, but the portfolio manager’s investment philosophy and process has essentially remained the same. Instead of taking a broad view of the investing landscape and breaking down economic trends, Walker digs into specific companies in hopes of finding unloved stocks trading at a discount.
Markets are especially teeming with opportunities now, Walker told Insider in a recent interview. The S&P 500 is still 7.4% off its all-time high after falling into correction territory in early 2022 as worries about a slowing economy and unusually high inflation rattled investors.
“I think there’s a lot of value there,” Walker said. “It seems to me that the market is pretty clearly forecasting a
come, and I think you can find a lot of great value.”
Value and growth stocks have been rocked in recent months, although the latter have been particularly hard hit as the
begins to rapidly raise interest rates to slow inflation. The growth components of the S&P 500, which benefit the most from low rates, are down more than 14% this year, while their value counterparts are slightly underwater with a loss of 0.9% since the start of the year. the year.
The sell-offs have indeed created plenty of opportunity, Walker said, although it takes wisdom to know which companies are the best. Stocks that are defensive in nature, meaning they are financially sound and can survive a recession, are among the safest investments, Walker said, but he added that economically sensitive names should not be ignored.
“Stock prices have already really adjusted to short-term earnings losses,” Walker said. “And a lot of them have fantastic balance sheets. So for me, if you find something that’s a little bit economically sensitive but the stock has been hammered, it’s got a good balance sheet so it can weather a storm – that’s kind of what you’re looking for right now.”
4 stock picks at 75% off or more
In January, Walker shared three companies in the cable industry that he called sound investments: Charter (CHTR), Altice (ATUS) and Frontier Communications (FYBR). Stocks in all three stocks have struggled and been in the red since early January, but Walker recently told Insider that his thesis was unchanged and that all three stocks were “grossly undervalued.”
In addition to this trio, Walker is bullish on four value stocks that he believes are trading at unwarranted discounts. All four are below, along with a ticker symbol, market cap, and P/E ratio, along with Walker’s thesis for each.