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This is the Value Investor podcast with Tracy Reinek. All things value, all the time.

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Welcome back, value investors. It's time to look for some cheap number one stocks. We haven't run this screen in a while, but it is time. We've had the sell off the pullback during the Iran war. Now we've had a pretty big rally here, one of the biggest in six years in the S&P 500 at least. And so what does that mean for value stocks in general right now? Well, I thought I'd take a look because I haven't run this screen in a while myself. And this is one of the premium Zach screens on Zack Sakom. It's one of my favorites. It's undervalued Zach's number one rank stocks. So all we're getting are those strong buys. Now. It's kind of interesting to run this screen right now before the heart of earnings season because earnings season is when the Zach's rank changes the most. You get an earnings report come out, maybe they beat, maybe they raised and then the analysts all have to raise their estimates on the good report or conversely the bad report. If they're cutting their earnings guidance, then the analysts have to go in and cut. So you get a lot of changes in those earnings estimates right now as they're giving guidance and you know, reporting for the prior quarter. And we are getting a first quarter earnings results now. So we're not in the heart of it yet though, even though we have started on earnings. But that means we're gonna get a lot more changes to the Zach's number one rank list as we go along. But I thought I would run it now anyways to kind of see who is number ones going into this earnings season. That tells me something pretty good is going on that already at a number one. Maybe they pre announce, maybe they had an investor day. Maybe the analysts are just bullish because something's going on in the industry, which I am going to talk about on today's episode because something's definitely going on in one industry thanks to the Iran war and yeah you guessed it, oil. Those earnings estimates are being adjusted on the higher price of oil regardless of what's going to happen in the earnings reports themselves. So we are already seeing those stocks go to number one, but there weren't that many on this list. So what else is in the screen other than just the number one rank? Because that's not going to get us value necessarily. That's just going to tell us that the earnings are being adjusted higher so this screen has an average volume requirement. So it can't just be, you know, 20,000 shares being traded. It has to be above the above. It looks like above 100,000 shares per day. Average volume, last close is, you know, has to be above $5 also. So we don't get some, you know, dollar stocks in here. Although I wonder how many could be number ones that are under $5. Probably not that many. But occasionally you get a stock that's very, you know, actively followed by the analysts that does have the breakdown. So then they would still have the Rank and then PE. Of course, we're searching for PE. This screen looks for under 20. So it's pretty broad on the definition of price to earnings there. And then it also has the secret sauce of the price to sales ratio, which I've used just on its own without the PE to find undervalued stocks. And remember, the price to sales has to be under 1. So like point 7, point 8, point 1. Anything under 1 means we're paying $0.70 on the dollar if it's point 7. So for all those sales, so for every dollar worth of sales, we're only paying the $0.70. That means we're getting the sales on sale. We love to see it. So that's why I love to search with the price to sales ratio. And price to sales data in general for companies is a little bit harder to fudge earnings. They can kind of cut some costs. They can do some stuff in accounting to get a few extra pennies occasionally in a quarter to make it look a little bit better. But price to sales is a lot harder to do that with because these are the actual sales coming in. So I like that aspect of it. But in this screen, we're getting both. We're getting earnings side and then we're also getting the price to sales. So we're keeping a modest in this screen. So remember, with the Zacks rank, it's already going to limit us to, you know, pretty small number of stocks. Let me look and see how many it's actually at right now. It was at 204 the other day when I looked, which I was surprised at because that is very low for the Zach's rank, but was just ahead of earnings season, so maybe that had something to do with it. Let's see what we're at today. No, it still is at 204. Okay, so we're hanging out at 204 ahead of this earnings season, but I have seen it as high as about 245 and as these earnings reports come in if they're good, and if those earnings estimates are revised higher, we will see the number rise here. But I feel like it is kind of on hold waiting for more earnings reports to come in. And then we'll see what happens with the rank. And remember, the Zach's rank can change daily. So you might have seen a stock that was number one, and then maybe even the next day it falls down to a number two. Or even when this podcast comes out, we may have some that fall off this list or even that I talk about that are no longer the number ones. And so I know I get a lot of confusing questions like why? Why are you acting like it's number one? When it's a two or sometimes a three, it can drop all the way down. And that's because it changed after I talked about it. So keep that in mind. It's not like a real dramatic thing. If it changes to a number two, which is pretty normal. I have seen them change to threes recently. We had one bowl of the day, or maybe it was on top stock picks that someone picked that was a number one. And then sure, the next day it did drop down all the way to a three. That's a little more difficult and unusual to see. And then we've even had occasionally they dropped down to fours or even fives. That's very rare to go from a 1 all the way to a 5, but it has happened. In my time here at Zachs, there's a little bit of trivia about the Zach's rank. I love my Zach's Rank trivia as I look at it over all these years and learn the nuances of it. And can you tell I enjoy using this X rank to give me these screens because there's also always something intriguing going on with whatever the rank is showing. So I ran this screen and I got 33 matches, which I thought was pretty good. I don't know what I was expecting, but with the recent rally, I thought we wouldn't have real cheap stocks right now, really. But we are. We are getting 33 matches out of the 204 that are true value stocks. And most of them on the PE basis are not trading near that 20 level. They're mostly, if they're on the more expensive side, around 15 times, which isn't really expensive. But you know, it's not dirt cheap either. But I look for 15 and under mostly on most of my screens. So anything 15, 16, 17 I consider to be pretty cheap based on the valuations of the S&P 500 right now, which are much higher. So keep that in mind. So what was in this list? Like I said, there are some oil stocks, but it was a pretty diverse list. There's some insurance, there is some auto stocks. There's some food stacks on here now, which is interesting. All with the number one ranks. Food. Food area was kind of beaten down for a while, so they could be just kind of coming off the lows here. And, you know, sometimes you'll get the rank after they, you know, they've hit the bottom. Basically they've hit the bottom. And so then they are finally rebounding off. But I'm not seeing a lot of the companies that I know have been struggling and where earnings have really been cut other than energy, which is like the RV area, like the leisure stocks like Boats Pool Corp. We've talked about them not seeing the housing stocks on here because it's still pretty bad for those areas. They're not really recovering like some of these others. But eventually, eventually they will. There's one retailer on here, that's all I can see. There's a fertilizer stock. So it is a pretty. No, there's two retailers. Sorry, two retailers. But it is pretty diverse, pretty diverse names. And so I picked out three. I tried to go with ones that maybe we haven't talked about in a long time, maybe, if ever. I'm not sure. We've been doing this podcast a long time, so we've covered a lot of stocks, but I'm pretty sure it's been a while with any of these. So let's dive right in and discuss some good value stocks here with the number one ranks in the middle of April 2026. So the first one I want to talk about is. It's called JLL now, but everyone who's older knows it as Jones Lang LaSalle JLL. And on its website it describes itself as a leading global commercial real estate services and investment management company. They help clients buy, build, occupy, manage and invest in a variety of industries and property types, including offices, industrial, multifamily, retail and data center properties. Data center properties. I'm repeating that again. Keep that in mind. And then, you know, they're global, they're in many countries, they're a large cap. They are a member of the Fortune 500. So everybody knows JLL. And I was a bit surprised this one was on the list because everything that's going on with basically commercial real estate for the last couple of years, since COVID since Remote Sense, work from home that is really battered the commercial side, but people are still building hotels again and multifamily and obviously data centers. So something good must be going on at JLL now. And I thought we would look into what is happening. Why does it have the number one rank? So the market cap is 15.3. I don't have any dividend on it, which I was surprised at. I assumed, you know, big cap company like this would have a dividend, but maybe they're doing share buyback. So that's something to look into. But no dividend forward PE is at 15. So this one is right on the edge of what I look for, but not with the screen looked for. Price to sales very low, 0.59. So right in the range of what the screen look for, but also a very attractive price to book ratio. Price to book of just two. I normally look for three or under. So it's got a lot of cheapness here. And something good must be happening with those earnings estimates. I see that earnings for this next quarter are coming out at the end of April. So we're going to want to tune in at the end of April. But this is kind of what I described, like what is happening that it's got the number one rank ahead of earnings here. So I'm just taking a look at the detailed estimates. There haven't been any changes in 60 days since the last earnings on the quarters or on this year. But for next year, which the Zacks rank is already starting to kind of look at for 2027, one estimate is higher in just the last seven days. So somebody for next year suddenly is like, I'm going to get more bullish suddenly right now. And they have raised and that has pushed up next year's earnings estimates. This year's are up in the last 60 days because five estimates were higher in the last 60 days. And they have a history of beating. They've definitely beaten the last four quarters. Last quarter for the fourth quarter of 2025 was a big massive beat. They reported 871. They estimate was at 725. So that's a $46 beat or 20% surprise. So that was a very nice big surprise there. But the analysts are starting to feel more bullishness. Earnings expected to be up 15.7% and another 13.8 for next year on 6% revenue growth for both years. 6.48 for this year and 6.4 for next year. So things just looking at the basics on Zack Stocks about what's happening with the earnings to get at this number one rank and looking at valuations and even growth to some extent is very good. Double digit growth expected on the earnings side. So I'm liking everything I see here. Everything's moving in the right direction. The stock is did pull back a bit in February and partially in March it is marching higher again. It is off its recent 5 year highs. So this was trading at 5 year highs. So it's on sale a bit here, not just by valuations but also in the actual shares. So that's Jones Lang LaSalle. If you're interested in the real estate side and the broader real estate side, we know the data centers are hot, red hot there. But other things are picking up as well, including multifamily in certain parts of the country and also hotels, those are still being built out pretty aggressively as well. So I'm not looking just at the commercial side of things, but that's included there as well. Tune into this one. I'm going to tune in in this next earnings report. That's Jones Lang LaSalle headquartered here in Chicago. JLL is the ticker there. Okay, let's switch over to oil. There were a couple oil stocks and so I went with one of the big caps that I haven't talked about in a while. Bp. This is the British used to be known as British Petroleum, it's just BP now. But this these earnings really turning around, spiking higher based on everything that's going on in the Persian Gulf and the price of oil. Now oil has come down as I'm recording this it in the paper market it's back under $100 for WTI. Brent is also back under 100 but in the physical market still very elevated. But Brent has come down to 120 from 144 which was an all time high. I expect it to stick around these levels for quite some time still even if the straight reopens, which it has not as of this recording on 4-15-2026, because it's just going to take a long time for those tankers to go back in the Gulf, reload and then head out again once it reopens. And we don't even really know what's going on with production in the Gulf. How dam has it been by the bombings, when will that start up and how long will it take it, if it hasn't been damaged, to get back up to, you know, full capacity or any capacity. It's definitely several weeks even if there's no damage just to get it up and running again. So A lot of things going on. They report at the end of the month as well. And market cap on BP is a lot bigger than Jones or JLL121 billion. They do pay a dip dividend. They do have a big dividend strategy. The dividend right now is $1.98 which is yielding 4.3%. And that is very generous for any of these big oil companies actually to be over 4% here. Especially because these shares have rallied. They've broken out to five year highs after the earnings decline of the last couple of years after the Ukraine war settled down. It's not that's still ongoing, but crude prices really came down after it became kind of clear that oil was not going to be as impacted by the Ukraine Russian war. And it stayed down until right now where they are raising those estimates again. So Earnings declined in 2023, 2024, Tom, 2025 and expected to rebound now in 2026 by 59.4%. But you're coming off of those really low levels. And what does it look like in those detailed estimates? We're at the number ones because they are raising as the price of oil goes up. So over the last 30 days, which is past the start of the Iran war now because again I'm recording this in the middle of April and the war started the very end of February. It we had 6 higher for this year and then 1 higher just in the last seven days. Again they're not waiting for the earnings they've decided to raise ahead of time. And then the most accurate estimate is even higher than the Zack's consensus right now. So the Zack's consensus is looking for 459 and that's up from even just 431 in the last seven days because this analyst came in with a consensus of 481. So that's a lot higher. And it's pushing up the consensus estimates now. But the shocking thing with the oil companies is just 60 days ago, so two months ago the analysts were looking for $262.60 and now they're looking for 459. So it's very dramatic in the oil, in the energy. And then next year is also boosted next year. The analysts already presumed that earnings were going to bottom this year and we would start to see some growth next year finally. But it's all been pulled forward now and now they still expect the growth to continue for next year. And we do have one estimate higher in the last week. That same Analyst also adjusting 2020 higher. That's still an earnings decline though, because nobody's really trusting how long these higher prices are going to remain. And so they're pricing in the $100 oil for this year and only this year really. But still everything's moving in the correct direction. Now on the estimates, that's when you're going to get the number one rank. And we even have revenue growth in the double digits for BP, up 19% now. And then those earnings up 59 as I mentioned. So where's the value here? Pes? Pes will go down as those earnings rise. So that's not always a good place to look in energy because in a bull market you will have the low pes and you will have the soaring stocks which we are actually having right now. But it shows up in these screens. PE of 10 peg ratio of 0.6. So that's a value peg. We look for under 1 with those peg ratios as well as the price to sales. Price to sales we know is also under 1 because that's how it made the screen. It's at 0.63. Price to book is also in the classic value range. And what I look for, it's at 1.6. So all of this is just screaming value. But everybody's discarded the energy stocks. They threw them away because the earnings were terrible. I'm the first to admit it, even though I like the oil stocks in general. But it's been awful the last couple of years with oil prices declining back into the 60s and 70s and then, you know, threatening to go into the 50s. It's, they, they've been able to make money, but not by much. So again, the dividend is $1.98 and now they're expected to make over $4. So they are able to pay that. But prior, prior to this surge in oil prices, they were running a, a lean ship there, paying the dividend while also, you know, paying for everything else with their earnings. We only had $2.60, $1.98 was going to go to that dividend, but now they're, they're definitely in the clear of paying. That year ago, EPS was 288. So you can see they were still expecting an earnings decline just two months ago for 2026. But again, many people thought that this would be the bottom. It can't get any worse, could it? Knock on wood. That's what I'm saying. But still, bp, I do like the industry with the higher oil prices. This is the time you should be in it and it's got that great dividend and also if you look up what they are doing, they're very shareholder friendly as a lot of these big oil companies are and they have put out that they targeting more than 20% adjusted free cash flow growth from 2024 to 2027 and expect progressive dividend growth of at least 4% annually. So keep that in mind. They're also reducing net debt to 14 to 18 billion by the end of 2027. These higher oil prices certainly were going to help them with any kind of debt reduction, any kind of commodity players. We've seen this with the, with the gold miners as well. Suddenly they're getting massive free cash flow that they didn't expect and they can use it to quickly reduce even more debt. So BP ticker bp, keep the oils on your list. They are still cheap and even if WTI hangs out around $90 and Brent is in the 90s or around a hundred, that is just huge for earnings for these companies and you will get that dividend. So keep that in mind. BP is the choice this week. Okay. And then the third stock is one. I'm not sure I've ever covered this one. If I have, it's been a while but it's called Mistress Mistress Group ticker Ms. Mary G as in George and they describe themselves as a global leader in technology enabled industrial asset integrity and testing solutions. Now that I read that I think we have covered them but it's been a while. They are a small cap so keep that in mind. It's going to be more volatile than something like a BP or even a JL. They have a market cap of just 400 or 544 million. No dividend on this one stock is trading at new 5 year highs. It's gotten quite a boost here in 2026 and I'm assuming it's the result of another good quarter in the fourth quarter where revenue was up 5.1% but they saw growth across all segments and then there Profit margin expanded 190 basis points to 28.4% in that fourth quarter. So that's going to impact earnings as well. And they are seeing continued gross profit margin expansion and they're focusing on higher return opportunities which we've seen a lot of these kind of industrial services companies do as the data center build out continues. So this looks like they use technology a lot for their product here and it says they are using it especially in aerospace and defense work and they see that area as somewhere that they can really, you know, expand the business in going forward. So they are in oil and gas, aerospace and defense, power and utilities, manufacturing and civil infrastructure. So they do have things like advanced non destructive testing and pipeline inspections to real time condition monitoring, maintenance planning and specialized engineering. This is powered by their proprietary management software which I know software has been in the dumps, right, because of AI, but not this stock. The stock is catching a bid probably because of the areas, these industrial areas and including power and utilities, which is all an AI trade. So what's happening with cheapness on this one? Forward P is 16.3. Even though the stock is at 5 year highs, PEG is right at the value level of 1. So I still, I still like a peg of 1. It works for me. Price to sales as we know is under 1 because that's why it's in the screen. 0.75 is the price to sales ratio. And then price to book is also the value category even though we didn't screen for it at 2.3 times. So once again a lot of other classic value, Even with the PE at 16.3, that's right around where I would look for value. I'm fine with owning a stock at 16.3, especially if they're having big earnings growth. I might not be as fine if say earnings growth was like 5% but with double digit earnings growth with which this company has, then you know, I'm willing to pay up a little bit more for those double digits. So what is the reason for the number one rank? Because earnings are expected in early May. So it's not a recent earnings thing going on. And this stock isn't heavily covered because it is a small cap. We do have two estimates on it for earnings as well as on sales. So I'm, I'm kind of presuming that we probably have two analysts covering it. Two are up from the last 60 days. One is up for in the last 60 for 2027 as well. And that is for 2026. The two. So otherwise there's no other changes. So, so why the number one rank? This is the mystery of the number one rank sometimes, but it is moving in the right direction and so it probably got the number one rank a while ago. And now because we're in earnings season and there's not been a lot of changes yet on the various estimates that figures out the rank. The Zach's rank is just kind of keeping it there because nobody's cutting either and the trend is still that it's higher. So we're looking for 105 now. And that is up from 99 cents 60 days ago. Next year they're looking for 122 and that's up from 121. So just a penny there, but they only made 88 cents last year. So this is a big gain. So it's showing those gains in the margins and doing higher margin. Business is starting to drive up the earnings. So that's 19.3% earnings growth for this year, 16.2% for next year on very little revenue growth, just 2.5% for this year and 3.5 for next year. But we're looking at the earnings and we're trying to get them as cheap as we can. So this stock has broken out here in April with a nice move higher as the rest of the stock market has done. So it's pretty volatile though. As a small cap, I would look for any kind of pullback on this, but it's still cheap here. So if you're looking for a small cap and you're looking for something that's kind of in this AI area and manufacturing renaissance area, manufacturing coming out of its recession, then this is an area to be in. The industry Ms. Strauss Group is in is electronics, miscellaneous products. So it's on. You know when you just see that, you're like, I wonder what's going on here. That it's got a number one rank that is a top 12% on industry rank, however, so that ranks 30 out of 243 industries that we cover here with the rank. So that's pretty strong. But a lot of that does have to do with the power side and AI, the AI revolution, a lot of money pouring into that. So that's Mistress Group ticker mg. I'm going to be watching this earnings report too, coming forward here in just a couple of weeks. I'm watching all three of these because things are looking good on the earnings side. We have not only are these stocks cheap, we've got the healthy earnings growth going on as well. So the Zach's rank is unveiling to us us some pretty intriguing stocks with just even these three. And there were 33 in this screen. So this is why I like to deploy it because the rank gives us that extra little secret, secret sauce I like to say, to weed out only the best really for the number one ranks, those that have something good going on in the underlying business. And that's why we see those earnings estimates being revised higher. So let's recap the stocks again. So we had JLL Jones, Lang LaSalle ticker JLL for that one. We had BP on the oil side Ticker B as in Boy, P as in Paul and you get that big dividend over 4% there with BP. And then we had Mistress group Ticker M as in Mary, G as in George, the small cap. So we're covering all areas. We've got a a big mega cap with bp. We do have a big cap with Jones, but not as big. And then we have a small cap with Mistress Ticker mg. And as always, I aim to please to find you stocks that are cheap. But something's going on there and I'm doing it every week here at the Value Investor Podcast. Be sure to subscribe on our YouTube channel to get all of our podcasts there. These are only the audio podcasts. You can get our video podcasts on our normal YouTube channel. We're also on Apple. I know many of you listen there and I thank you. Like our podcasts on any of these platforms. Give us some love so that other people can discover the Value Investor Podcast because the algorithms, as you know, will put it out there for others to see if suddenly people are enjoying what they're hearing. So like us Leave a comment. You can leave a comment on our YouTube page as well. I do like to check the comments there. So start a dialogue on some of these on our YouTube channel. And as always, I will be back again next week with some more Value