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Yahoo
a day ago
- Business
- Yahoo
Why Cencora (COR) is a Top Value Stock for the Long-Term
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics. Why Investors Should Pay Attention to This Value Stock Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, the Value Style Score identifies the most attractive and most discounted stocks. Cencora (COR) Chesterbrook, PA-based Cencora is one of the world's largest pharmaceutical services companies, which focuses on providing drug distribution and related services to reduce health care costs and improve patient outcomes. COR sits at a Zacks Rank #3 (Hold), holds a Value Style Score of A, and has a VGM Score of A. Compared to the Medical Services industry's P/E of 16.7X, shares of Cencora are trading at a forward P/E of 18.6X. COR also has a PEG Ratio of 1.4, a Price/Cash Flow ratio of 14.8X, and a Price/Sales ratio of 0.2X. Many value investors pay close attention to a company's earnings as well. For COR, five analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.13 to $15.88 per share for 2025. COR boasts an average earnings surprise of 6.2%. COR should be on investors' short list because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cencora, Inc. (COR) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
28-07-2025
- Business
- Forbes
Don't Give Up Hope, Value Investors
Homes under construction in 2024 at a Pulte Homes site in Rancho Cordova, California. Pulte is one ... More of several stocks with traits of both growth and value. Photographer: David Paul Morris/Bloomberg The numbers are stark. In the 12 months through June, growth stocks returned 19.9%, while value stocks managed only 9.6%. Alas for value investors, the two previous years tell the same story. In 2023 the scorecard shows a return of 30.0% for growth and 22.2% for value. In 2024 the score was 36.1% for growth, 12.3% for value. These are total returns including dividends, as calculated by Standard & Poor's Corp. If you're a value investor by philosophy and temperament, as I am, what lesson should you draw? Jumping out of the nearest window is not a permissible answer. Value stocks are out of favor stocks that are relatively cheap. Growth stocks are the stocks of companies whose earnings are growing fast. Naturally, people pay more for growth stocks. But how much more? According to Larry Swedroe of Morningstar, The Russell 1000 Growth Index in recent years has typically sold for 32 times the component companies' earnings, The Russell 2000 Value Index has sold for about a 15 multiple. That valuation gap has widened to a chasm. Now, the growth index goes for 42 times earnings and the value index fetches only about 14 times. Mostly for that reason, I think value will make a comeback soon. But in the meantime, it wouldn't kill me to buy some stocks that have both value and growth characteristics. Here are five stocks that I believe show both value and growth qualities. Each one sells for 15 times earnings or less yet shows earnings growth averaging 15% or better in the past five years. Like its larger rival D.R. Horton Inc. (DHI), PulteGroup Inc. builds houses in a variety of styles, at several price points. Its average selling price is about $560,000, which is about 10% above the national average. I like both Pulte and Horton, but I highlight Pulte because its five-year earnings growth rate, almost 32% a year, is slightly higher than Horton's. To truly thrive, homebuilders will need lower mortgage rates. I suspect that may happen in 2026. With oil prices well off their highs, oil-and-gas stocks have had a tough year this year. I like them nevertheless, particularly Diamondback Energy Inc. (FANG), which is based in Texas and drills mainly in the Permian basin in western Texas. Diamondback has averaged 35% annual earnings growth the past five years. The stock sells for about nine times earnings. Crocs Inc. (CROX), which makes those shoes with holes in them that maybe your son or daughter wears, has increased its revenue by 20% a year over the past decade. Yet its stock sells for a measly eight times earnings (excluding nonrecurring earnings). The smallest stock I'll recommend today is Eaco Corp. (EACO) of Anaheim, California, which distributes electronic connectors and fasteners. Investors know that distributors usually have slim margins; hence their stocks are cheap. Eaco fits the bill, selling for about 10 times earnings. But its profit margin isn't so bad, about 7%. And earnings have been growth at a 23% clip the past five years. Speculative but interesting is Catalyst Pharmaceuticals Inc. (CPRX), based in Coral Gables, Florida. It's a biotech company working on drugs for rare neurological and neuromuscular diseases. Catalyst has three drugs on the market, and posted sales of more than $500 million in the past four quarters. All eight analysts who follow the stock like it. Such unanimity usually strikes me as a danger sign, but in the case, I happen to agree with the analysts. This is the 19th column I've written about stocks that combine growth and value. The previous columns generated an average one-year return of 17.2%. That compares well to the 12.2% average return for the Standard & Poor's 500 over the same periods. Bear in mind that my column results are hypothetical and shouldn't be confused with results I obtain for clients. Also, past performance doesn't predict the future. Of the 18 columns, 13 were profitable and 12 beat the index. My most recent column on this topic (written two years ago) was a dud, falling 2% through July of 2024 while the S&P 500 returned 22%. A 55% loss in Albemarle Corp. (ALB) was the fatal dagger. A 43% gain in Stifel Financial Corp. (SF) wasn't enough to save the day. Disclosure: I own Diamondback Energy personally and for most of my clients. I own D.R. Horton for one client, and my wife (a portfolio manager at my firm) owns PulteGroup for one client.
Yahoo
12-07-2025
- Business
- Yahoo
The Smartest Vanguard ETF to Buy With $1,000 Right Now
Despite their volatility, growth stocks have now led the market's movements for nearly 30 years. The conditions underpinning that leadership, however, are primed to reverse. Adding broad exposure to value stocks to your portfolio will actually make it easier for you to continue holding onto some handpicked growth names. 10 stocks we like better than Vanguard S&P 500 ETF › Got an extra $1,000 sitting around that you won't be needing anytime soon? Want to invest it in something that won't require ongoing babysitting? If you're a true long-term investor, the Vanguard S&P 500 ETF (NYSEMKT: VOO) -- an exchange-traded fund that tracks the performance of the S&P 500 (SNPINDEX: ^GSPC) -- is never a bad choice. And you probably already know that the Vanguard Growth ETF (NYSEMKT: VUG) has been stomping the broader market for a while now. But we may be at a point where it makes sense to scale back on your exposure to growth stocks and ramp up your value holdings instead with something like the Vanguard Value ETF (NYSEMKT: VTV). Here's the deal. It's been a while since value stocks as a class outperformed growth stocks. In fact, it has been so long that many investors have forgotten it's possible. Growth stocks have persistently beaten value since the late 1990s, in fact, driven higher by the successive advents of the internet, smartphones, cloud computing, and artificial intelligence. Abnormally low interest rates across most of that stretch also helped. As the old adage goes, though, nothing lasts forever. Value stocks will have their day in the sun sooner or later. And perhaps sooner rather than later. That's the takeaway from Morningstar's (NASDAQ: MORN) recently published Q3 2025 Stock Market Outlook, anyway. As analyst Davod Sekera notes, "Not only are value stocks undervalued on an absolute basis, but they also remain near some of the most undervalued levels relative to the broad market over the past 15 years. In a market that is becoming overvalued, we see value in the relatively higher dividend yields found in the value category." He's not alone in his bullishness. Cyril Moullé-Berteaux, head of the Global Multi-Asset team at Morgan Stanley Investment Management, wrote in March that U.S. value stocks were extremely cheap at only 10 times their projected earnings, versus growth stocks' multiple of 30. Based on their historical performance in the periods after they were priced that cheaply, Moullé-Berteaux argued that "value stocks offer the greatest opportunity, given how expensive and over-owned growth and quality stocks are and the likelihood of a reversal." Not much has changed in the four months between then and now, except for perhaps one thing. That is, the so-called "Magnificent Seven" stocks (and their close peers) that provided much of the market's overall lift over the past few years are no longer leading the way upward... at least not as a group. They've actually been lagging the market since the latter part of last year. It's possible that change foretells a much bigger shift. Take this idea with a grain of salt: Plenty of pundits have been arguing that value stocks are ready to take the lead since 2023, after inflation soared and the Federal Reserve ramped up interest rates to combat it. That pivot has yet to pan out, though. Instead, enough growth-centric tech companies managed to do some amazing things during that stretch that they preserved the bullish momentum for the whole growth category. The always-dangerous "this time is different" argument, however, may actually hold water this time around. See, with the exception of within the United States (where investors appear to remain enamored with a handful of the most exciting technology stocks), value stocks in markets worldwide are leading growth stocks. And even within the U.S., a number of widely held growth names are not exactly providing commanding leadership. Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Tesla (NASDAQ: TSLA), for instance, are all down year to date, while the S&P 500 is up by a respectable 6%. Investors may also understandably fear that deglobalization efforts and tariff-crimped trade could turn into real trouble. A recent poll of U.S. consumers performed by research outfit Resonate found that their fears that a stock market crash was coming soared to more than a two-year high in May, with 46% of the public reporting serious concerns of an economic slowdown -- despite the rally underway at that time. Such a crash would almost certainly take a harsher toll on overvalued growth stocks than it would on value names like JPMorgan Chase (NYSE: JPM), ExxonMobil (NYSE: XOM), or Procter & Gamble (NYSE: PG), all three of which are among the Vanguard Value ETF's biggest positions. Let's also not forget that the Fed has kept interest rates near their 20-year highs for about two and a half years now, rather than trimming them back toward the historically low levels they have sat at during most of the 21st century. Growth companies can't evade the impact of higher borrowing costs forever. Value companies, by contrast, are more adapted to such conditions. The kicker: While they should not be viewed as the primary reason to step into the Vanguard Value fund, this ETF's reliable dividend payments can compensate somewhat for its less-exciting growth potential. New investors today will be plugging into it while its trailing dividend yield stands at just under 2.2%. Still not convinced? That's OK -- there's no denying there are still some juicy growth stories out there that could supercharge your portfolio's performance for at least a bit longer. Just consider this, though: You don't have to convert all of your holdings to value investments in one fell swoop. Remember, you're only trying to figure out what to do with an idle $1,000 (or some other fraction of your investable assets) based on what you think the long-term future likely holds. You don't need to cash in all of your favorite growth holdings now. Indeed, putting funds into a broad-based dividend-paying value investment right now would make it easier for you to hold onto a few hand-picked growth stocks that you think are still positioned to defy the bigger headwind that growth as a category is facing at this time. In other words, playing a bit of smart defense here would also let you continue playing some selective offense. Before you buy stock in Vanguard S&P 500 ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard S&P 500 ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,432!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,005,854!* Now, it's worth noting Stock Advisor's total average return is 1,049% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. JPMorgan Chase is an advertising partner of Motley Fool Money. James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, JPMorgan Chase, Tesla, Vanguard Index Funds-Vanguard Growth ETF, Vanguard Index Funds-Vanguard Value ETF, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy. The Smartest Vanguard ETF to Buy With $1,000 Right Now was originally published by The Motley Fool
