Welcome to Episode #446 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.
With the major stock indexes still trading near all-time highs, and worries about technology stock valuations being stretched, are there any high-quality value stocks still out there?
What’s the Easiest Value Stock Screen?
Screening for value stocks doesn’t have to be complicated. Many investors screen for value using just one criterion: the price-to-earnings (P/E) ratio. But why not use the price-to-sales (P/S) ratio instead? It’s more difficult for companies to manipulate their sales, compared to earnings.
The sales are the sales.
A P/S ratio under 1.0 means you are getting the sales on sale. For example, a P/S ratio of 0.4 means that you are paying $0.40 for every $1.00 of sales. That’s a deal.
But there are a lot of companies trading with a P/S ratio under 1.0. How do you find the best quality companies?
The Zacks Rank is Your Secret Weapon
Add the Zacks Rank to the screen. Look for companies that are Zacks Rank #1 (Strong Buy) or #2 (Buy) stocks.
These are the two highest Zacks Ranks. Being a Strong Buy or Buy usually indicates that the analysts are raising earnings estimates. They are bullish on that company.
Remember, however, the Zacks Rank is a short-term recommendation of just one to three months. It can change daily, as analysts adjust their earnings estimates.
The Zacks Rank can be your secret weapon. Not only will you have cheap stocks, but you will also have companies where the analysts are raising their earnings estimates.
Running this basic screen returned 155 companies.
Why Not Add the PEG Ratio Too?
To cut that number down further, Tracey added the PEG ratio of 1.0 or under. A PEG ratio, which measures the P/E ratio divided by growth, is another good value criteria. A PEG ratio under 1.0 usually indicates a company has both growth and value.
This is a rare combination.
This screen with the Zacks Ranks of Strong Buy and Buy, a P/S ratio under 1.0, and a PEG ratio under 1.0, returned 34 stocks.
3 Top Ranked Cheap Stocks to Watch Right Now
1. Werner Enterprises, Inc. (WERN)
Werner Enterprises was founded in 1956. Headquartered in Omaha, Nebraska, it is a transportation and logistics company in the US, Canada, and Mexico. It’s among the five largest truckload carriers in the US.
Shares of Werner Enterprises have rallied in 2026, adding 49.2%. Earnings are expected to turn around too as the trucking industry comes out of tough times. After losing $0.02 in 2025, the Zacks Consensus is looking for $0.98 in 2026. That’s earnings growth of 5000%.
Werner Enterprises is cheap with a P/S ratio of 0.9.
It was a Zacks Rank #1 (Strong Buy) at the time the podcast was recorded but has now fallen to a #3 (Hold). Eighty percent of all Zacks ranked stocks are Holds.
Werner is expected to report earnings on July 28, 2026.
With trucking seeing a turnaround, should Werner Enterprises be on your watch list?
2. Magna International Inc. (MGA)
Magna International is a Canadian company which is one of the largest auto suppliers in the world. It has a footprint in 28 countries and 327 manufacturing and assembly facilities worldwide.
Analysts are bullish on 2026 and 2027. The Zacks Consensus is looking for earnings growth of 19.9% in 2026 and another 13.4% in 2027.
Shares of Magna are up 19.8% year-to-date but it remains cheap, with a P/S ratio of just 0.4.
Like Werner, Magna’s rank has changed since the podcast was recorded. It was a Zacks #2 (Buy) stock but has dropped to a #3 (Hold).
It is shareholder friendly and pays a dividend, currently yielding 3.1%.
Magna will report earnings again on July 31, 2026.
Should an auto parts supplier like Magna International be on your watch list?
3. Jabil Inc. (JBL)
Jabil has been in business for 60 years and provides engineering, supply chain and manufacturing solutions. It’s an “AI stock.” In its third quarter 2026 earnings report on June 17, 2026, Jabil said that AI infrastructure demand remained extremely strong.
Earnings are expected to rise 30.7% in fiscal 2026 and another 30.2% in fiscal 2027.
Shares of Jabil are up 45.8% in 2026, but they’ve pulled back 8.2% in the last month. Jabil is still cheap but it just barely made this screen. It has a P/S ratio of 1.00 so you would be paying $1.00 for every $1.00 of revenue. But compared to other AI Revolution stocks, that is cheap.
Jabil was a Zacks Rank #1 (Strong Buy) at the time of the podcast and it has remained a #1 Strong Buy.
Is this recent pullback a buying opportunity in Jabil?
What Else Should You Know About the Easiest Value Stock Screen to Run Right Now?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of JBL in the Zacks Value Investor portfolio.]
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant 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
Magna International Inc. (MGA): Free Stock Analysis Report
Jabil, Inc. (JBL): Free Stock Analysis Report
Werner Enterprises, Inc. (WERN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).