2024 Value Stock Winners: What's Next?

(0:30) - What Really Worked For Investing In 2024?(6:00) - Tracey’s Top Picks To Keep On Your Watchlist(32:45) - Episode Roundup: ETD, WSM, HVT, MLKN, RH, ARHS,             Podcast@Zacks.com Welcome to Episode #390 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.The end of the year is a good time to look back at what value stocks did well for the year. Are they STILL values going into next year? What’s the outlook for their industries?One group of stocks did NOT perform well in 2024: energy. Additionally, big banks like JPMorgan Chase rallied and had breakouts, but smaller, regional banks and community banks failed to achieve breakouts.But in other industries, including homebuilding and housing, retail, alternative energy and infrastructure, there was more optimism.Despite the market surge, there are many value stocks. But can they get momentum in 2025?5 2024 Value Stocks: What’s Next?1. Toll Brothers, Inc. (TOL)Toll Brothers, the luxury homebuilder, had another strong year in 2024 as demand for housing remains elevated even with high mortgage rates. Last quarter, 28% of Toll Brothers buyers paid all cash so it has more of a cushion from the impact of higher rates than some of the other builders.Toll Brothers shares hit new highs earlier in the year but have fallen 17% over the last month. Toll Brothers is still up 22% year-to-date.It’s still cheap. Toll Brothers trades with a forward price-to-earnings (P/E) ratio of just 8.6. A P/E under 10 is considered dirt cheap.Should Toll Brothers be on your value stock short list for 2025 after this sell-off?2. United Rentals, Inc. (URI)United Rentals, the largest equipment rental company in the world, has long been a value stock. However, shares of United Rentals soared to new all-time highs this year, which pushed up valuations.But over the last month, shares have fallen 11.6%. United Rentals is cheaper now, with a forward P/E ratio of 16.4. United Rentals has seen strength this year in construction and industrial end-markets. It believes it has secular tailwinds across several large projects.Should United Rentals be on your value stock short list for 2025?3. Powell Industries, Inc. (POWL)Powell Industries is a supplier of custom-engineered solutions for the management, control and distribution of electrical energy. It’s a mid-cap company with a market cap of $3.9 billion.Powell Industries is a Zacks Rank #1 (Strong Buy) stock. We originally “discovered” this company doing a value stock screen which included the Zacks Rank earlier this year. Revenue rose 45% to $1 billion in Fiscal Year 2024.Powell Industries hit new highs earlier in the year but shares have sold-off 19.4% in the last month. Valuations are more attractive. Powell Industries now has a forward P/E of 17.8. It also pays a dividend, yielding 0.4%.Should Powell Industries be on your value stock short list for 2025?4. The Gap, Inc. (GAP)The Gap, the famous apparel and accessory retailer which owns several brands including Gap, Old Navy, Banana Republic and Athleta, has struggled in recent years. But comparable sales turned around in several of its brands heading into the holiday season.Shares of The Gap are bucking the December weakness in the markets, gaining 16.3% in the last month on optimism that there’s a turnaround in the brand. The Gap is still cheap. It has a forward P/E of 11.8. A P/E under 15 usually indicates value.The Gap is also shareholder friendly and pays a dividend, yielding 2.7%.Should The Gap be on your value stock short list for 2025 or is the turnaround already priced in?5. Mr. Cooper Group Inc. (COOP)Mr. Cooper Group is a mortgage services company. It both originates and does mortgage refinancings in the residential market. Mr. Cooper Group has a market cap of $6 billion, which makes it a mid-cap company. In Nov 2024, it closed on its acquisition of Flagstar’s mortgage operations.Shares of Mr. Cooper Group hit new highs in 2024. It’s up 47% year-to-date. Shares haven’t been hit hard during Wall Street’s December sell-off despite homebuilders getting hammered. It’s down just 2.6% over the last month.Earnings for Mr. Cooper Group are expected to rise 39.2% in 2024 and another 31.7% in 2025. Mr. Cooper Group trades with a forward P/E of just 9.2. A P/E under 10 indicates a stock is dirt cheap.Mr. Cooper Group is a Zacks Rank #2 (Buy) stock, the second highest Zacks Rank. The Zacks Rank is a short-term recommendation of 1 to 3 months.Should Mr. Cooper Group be on your value stock short list for 2025?What Else Should You Know about Value Stocks in 2024 and 2025? Tune into this week’s podcast to find out.[In full disclosure, Tracey owns shares of TOL and COOP in her personal portfolio.]Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>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 Toll Brothers Inc. (TOL): Free Stock Analysis Report The Gap, Inc. (GAP): Free Stock Analysis Report United Rentals, Inc. (URI): Free Stock Analysis Report Powell Industries, Inc. (POWL): Free Stock Analysis Report MR. COOPER GROUP INC (COOP): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks