Value stocks are the mainstay of many investors, said Jack Hough in SmartMoney. But they lost a lot more than growth stocks did during last year’s sell-off and were slower to recover earlier this year. There’s no hard-and-fast definition for what qualifies as a value stock, since “stocks exist in a spectrum between growth and value, not on either side of a fence.” Yet the Standard & Poor’s Pure Growth and Pure Value indexes provide a convenient gauge. In April, Pure Value stocks jumped 32 percent, suggesting that investors have already started digging through the bargain bin. Still, there are plenty of deals to be had in value stocks.
Some of the best finds are among “punished” industry leaders with strong long-term prospects, said Andrew Leckey in the Chicago Tribune. Microsoft Corp., for example, has been dragged down by lower personal computer sales due to the recession, but it’s still a “software powerhouse.” Pfizer Inc. is another “giant” name recently relegated to the clearance rack. Stock in this cash-rich pharmaceutical maker currently has been priced “as though it is never again going to come out with a new drug,” says Thomas Forester, manager of Forester Value Fund. There are even some safe bargains among financial firms. “Travelers Co. is a conservative insurance company that didn’t swing for the fences with its investments and doesn’t have the same concerns as banks.”
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Create an account with the same email registered to your subscription to unlock access.
