For Immediate Release
Chicago, IL – October 6, 2017 – Zacks Value Trader 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/277798/applying-warren-buffetts-investing-lessons-today)
Applying Warren Buffett’s Investing Lessons Today
Welcome to Episode #62 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.
Warren Buffett was recently giving television interviews because Berkshire Hathaway (NYSE:BRKa) bought a 38.6% stake in Pilot Flying J travel centers, which is the largest travel center company in North America, with 750 locations and 27,000 employees.
When you heard the news, you might have been thinking, “travel centers? That’s so boring.”
After all, this is a world filled with electric cars, 1-hour home delivery, ride-sharing, Airbnb, AI and social media.
What are the lessons value investors can learn from what Warren Buffett is buying?
3 Investing Lessons Learned from Warren Buffett
1. Boring is beautiful. Sometimes the “ho-hum” companies are what turn out to be the cash-generating superstars. Take Pilot Flying J, for instance. It’s not just a travel center, but it also operates 279 restaurants making it the 10th largest restaurant franchise in America.
2. Buy companies that are profitable. Sounds simple, right? But many don’t do it.
3. Buy building block companies. Buffett likes to buy companies that operate in the shadows that few people give a second thought to. Travel centers is one of those. A railroad is another.
Tracey thought about these lessons and then wondered, what stocks fit into these parameters right now?
There’s not really a screen for stocks Warren Buffett would like that are building block companies, profitable and boring.
But she did find 5 stocks that have Zacks Ranks of #1 (Strong Buy), #2 (Buy) and #3 (Hold) that fit into the parameters. Not all are classic value stocks, however, but they each fit into Buffett’s lessons.
5 Stocks That Are Buffett-Like
1. Parker Hannifin (NYSE: (NYSE:PH) – Free Report) has been in business 100 years. It makes motion, control and filtration systems. It’s forward P/E is 19.5 but it’s expected to see double digit earnings growth this fiscal year and next.
2. Air Products & Chemical (NYSE: (NYSE:APD) – Free Report) was founded in 1940. It provides atmospheric and process gases to customers in 50 countries. It has a 30 billion market cap and pays a dividend yielding 2.5%.
3. Casey’s General Stores (Nasdaq: (NASDAQ:CASY) – Free Report) operates small town convenience stores that sell gas and food in the Midwest. Because it operates in towns under 5,000, it often is the only pizza provider in town. As a result, it’s now the 5th largest pizza chain in the country.
4. Hanesbrands, Inc. (NYSE: (NYSE:HBI) – Free Report) has been in business 116 years. It makes basic apparel such as bras, socks and underwear. It has a forward P/E of just 12.
5. Ryder System (NYSE: (NYSE:R) – Free Report) operates one of North America’s largest truck fleets. Founded in 1933, it has a market cap of $4.5 billion. It has a price-to-book ratio of just 2.1 and a price-to-sales ratio of 0.6.
What else should you know about Buffett’s investing lessons?
Tune into this week’s podcast to find out.
Want more value investing insights from Tracey?
Value investors are a special breed of investor. They don’t follow the herd.
If that is your style of investing, be sure to check out Tracey’s weekly Value Investor service to receive more in-depth analysis on value companies and see which stocks she thinks are the best bargains now.
The Value Investor portfolio holds between 20 and 25 value stocks for the long haul.
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.
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Ryder System, Inc. (R): Free Stock Analysis Report
Air Products and Chemicals, Inc. (APD): Free Stock Analysis Report
Parker-Hannifin Corporation (PH): Free Stock Analysis Report
Caseys General Stores, Inc. (CASY): Free Stock Analysis Report
Hanesbrands Inc. (HBI): Free Stock Analysis Report
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