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Dec. 23, 2019, 9:20 a.m. EST

Here’s a lucky batch of 13 stocks that Jefferies thinks are ‘value BUT growing’ for 2020

Motorola Solutions and Valvoline stocks are among the baker’s dozen of companies, Jefferies says

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By Andrea Riquier


iStockphoto
A black cat: good luck for 2020?

Is the pivot into value stocks for real this time? That has been one of the biggest questions facing investors over the last three months of 2019. As the economic outlook deteriorated, then brightened again, it seemed like the right time to take chances on stocks considered undervalued.

But there have been some headfakes along the way, and with stock markets at all-time highs, some investors still need convincing that a multiyear run-up in stocks has further to climb.

See: Good news: the ‘stock-bond ratio’ just hit bottom. Here’s how to use it to invest.

In what might be seen as an attempt to thread the needle, analysts at Jefferies produced a list of stocks that they describe as “Value BUT growing” — that is, expected sales growth over 3% in 2020. The analysts also screened for companies that are reducing their debt, have market capitalizations between $750 million and $30 billion, and derive more than 20% of their sales from outside the U.S.

The Jefferies analysts in a research note dated Friday come up with 13 names that fit those criteria. They make a couple of points about other themes that inform their thinking, as well: “Smaller small-cap” stocks have more attractive valuations than larger ones, they say. And they’re “getting more excited” about the outlook for overseas economies versus the U.S.

Company Sector Foreign sales % Forward price/earnings
Aptiv PLC /zigman2/quotes/204162392/composite APTV   Discretionary 73 17.5
Energizer Holdings, Inc. /zigman2/quotes/209643437/composite ENR   Staples 30 13.7
Integra LifeSciences /zigman2/quotes/200866868/composite IART   Health care 29 20.1
Dentsply Sirona /zigman2/quotes/204544124/composite XRAY   Health Care 68 20.9
Masco Corp . /zigman2/quotes/202412472/composite MAS   Industrials 21 17.9
Textron . /zigman2/quotes/210490092/composite TXT   Industrials 38 11.7
Univar Solutions /zigman2/quotes/200314151/composite UNVR   Industrials 43 14.8
Woodward /zigman2/quotes/201720095/composite WWD   Industrials 44 19.3
Microchip Technology /zigman2/quotes/208326291/composite MCHP   Info tech 80 16.5
Motorola Solutions /zigman2/quotes/203308192/composite MSI   Info tech 41 18.9
ON Semiconductor /zigman2/quotes/202641012/composite ON   Info tech 85 14.8
SolarWinds Corp. /zigman2/quotes/208088323/composite SWI   Info tech 39 20.2
Valvoline /zigman2/quotes/203583380/composite VVV   Materials 26 13.7
S&P 500 Broad market index 38 18.1

Related: Wall Street has slammed the brakes on one of 2019’s hottest stock-market funds

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US : U.S.: NYSE
$ 91.92
+1.89 +2.10%
Volume: 1.90M
Sept. 29, 2020 4:00p
P/E Ratio
13.99
Dividend Yield
0.00%
Market Cap
$24.31 billion
Rev. per Employee
$100,944
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/zigman2/quotes/209643437/composite
US : U.S.: NYSE
$ 39.31
-0.33 -0.83%
Volume: 378,692
Sept. 29, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
3.05%
Market Cap
$2.72 billion
Rev. per Employee
$449,075
loading...
/zigman2/quotes/200866868/composite
US : U.S.: Nasdaq
$ 46.42
-0.34 -0.73%
Volume: 597,789
Sept. 29, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.94 billion
Rev. per Employee
$327,209
loading...
/zigman2/quotes/204544124/composite
US : U.S.: Nasdaq
$ 42.75
-0.56 -1.29%
Volume: 1.04M
Sept. 29, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
0.94%
Market Cap
$9.46 billion
Rev. per Employee
$243,067
loading...
/zigman2/quotes/202412472/composite
US : U.S.: NYSE
$ 56.12
-0.60 -1.06%
Volume: 1.46M
Sept. 29, 2020 4:03p
P/E Ratio
34.91
Dividend Yield
1.00%
Market Cap
$14.77 billion
Rev. per Employee
$321,500
loading...
/zigman2/quotes/210490092/composite
US : U.S.: NYSE
$ 36.77
-0.04 -0.11%
Volume: 975,788
Sept. 29, 2020 4:04p
P/E Ratio
22.51
Dividend Yield
0.22%
Market Cap
$8.39 billion
Rev. per Employee
$399,200
loading...
/zigman2/quotes/200314151/composite
US : U.S.: NYSE
$ 16.84
-0.38 -2.21%
Volume: 848,536
Sept. 29, 2020 4:00p
P/E Ratio
601.43
Dividend Yield
N/A
Market Cap
$2.91 billion
Rev. per Employee
$1.02M
loading...
/zigman2/quotes/201720095/composite
US : U.S.: Nasdaq
$ 78.55
-0.27 -0.34%
Volume: 330,646
Sept. 29, 2020 4:00p
P/E Ratio
20.24
Dividend Yield
0.41%
Market Cap
$4.92 billion
Rev. per Employee
$302,233
loading...
/zigman2/quotes/208326291/composite
US : U.S.: Nasdaq
$ 102.74
-0.33 -0.32%
Volume: 1.40M
Sept. 29, 2020 4:00p
P/E Ratio
41.12
Dividend Yield
1.43%
Market Cap
$26.02 billion
Rev. per Employee
$352,817
loading...
/zigman2/quotes/203308192/composite
US : U.S.: NYSE
$ 157.65
+1.02 +0.65%
Volume: 696,979
Sept. 29, 2020 4:03p
P/E Ratio
32.84
Dividend Yield
1.62%
Market Cap
$26.59 billion
Rev. per Employee
$458,937
loading...
/zigman2/quotes/202641012/composite
US : U.S.: Nasdaq
$ 21.78
+0.06 +0.25%
Volume: 4.78M
Sept. 29, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$8.93 billion
Rev. per Employee
$164,658
loading...
/zigman2/quotes/208088323/composite
US : U.S.: NYSE
$ 20.34
+0.18 +0.89%
Volume: 574,745
Sept. 29, 2020 4:00p
P/E Ratio
207.98
Dividend Yield
N/A
Market Cap
$6.30 billion
Rev. per Employee
$304,269
loading...
/zigman2/quotes/203583380/composite
US : U.S.: NYSE
$ 19.14
-0.22 -1.14%
Volume: 927,048
Sept. 29, 2020 4:00p
P/E Ratio
16.20
Dividend Yield
2.36%
Market Cap
$3.58 billion
Rev. per Employee
$342,836
loading...

Andrea Riquier reports on housing and banking from MarketWatch's New York newsroom. Follow her on Twitter @ARiquier.

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