3 Value Stocks to BUY Now for the Remainder of 2020

NYSE: BRK.A | Berkshire Hathaway Inc. CI A News, Ratings, and Charts

BRK.A – Many stocks in the market are rising based on pure momentum. They may work part of the time, but eventually some of these stocks may fall out of favor. Another strategy to employ is looking for stocks trading at lower prices. Here are three strong value stocks with diverse business segments: Berkshire Hathaway (BRK.A), Johnson & Johnson (JNJ), and Procter & Gamble Company (PG).

By traditional measures, a number of stocks might look overvalued due to the market’s record momentum since the virus-led crash in mid-March. Many investors are jumping on the bandwagon and buying stocks, even though they look expensive. In a way, betting on a soaring stock is considered momentum investing. But in the absence of strong economic news, there is a chance these stocks will see a correction.

Although I am not against momentum investing, investing in stocks that are available at relatively cheaper prices could increase the odds of success. For this strategy, just a low price is not enough. You need to choose low-priced stocks that have solid growth potential.

Berkshire Hathaway Inc. (BRK.A), Johnson & Johnson (JNJ), and Procter & Gamble Company (PG) are three such stocks that are currently trading at reasonable valuations. Moreover, as these companies deal in a variety of business segments, investing in them could help you diversify your portfolio.

Berkshire Hathaway Inc. (BRK.A)

BRK.A engages in diverse business activities including insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, retailing and services. BRK.A has a cash/price ratio of 0.07 and an EV/EBITDA of 4.20, both lower than their respective industry averages.

BRK.A has grown more than 35% since its March lows and the company’s EPS is expected to grow by 18.4% next quarter. The company’s net earnings attributable to shareholders increased 86.8% year-over-year in the second quarter. BRK.A’s top five investment holdings are Apple Inc. (AAPL), Bank of America (BAC), Coca-Cola (KO), American Express (AXP), and The Kraft Heinz Company (KHC).

Some notable recent developments with respect to the company’s portfolio is the addition of Barrick Gold (GOLD) and Bank of America (BAC) shares, and a reduction of its holdings in JPMorgan Chase (JPM), Wells Fargo & Company (WFC), and PNC Financial Services (PNC). In addition, the company also dropped its position in Goldman Sachs (GS) and US airline stocks, as well as trimmed its holdings in other bank stocks.

BRK.A’s solid track record of generating long term returns for its shareholders, while investing in companies with strong fundamentals and reasonable valuations makes a strong case for potential investors. Berkshire Hathaway has acquired slightly more than 5% passive stakes in each of the five leading Japanese trading companies and intends to hold these investments for the long term.

How does BRK.A stack up for the POWR Ratings?

A for Trade Grade

A for Buy & Hold Grade

A for Peer Grade

A for Industry Rank

A for Overall POWR Rating

You can’t ask for better. The stock is also ranked #1 out of 59 stocks in the Insurance-Property & Casualty industry.

Johnson & Johnson (JNJ)

JNJ is a New-Jersey based company that operates in three main segments — Consumer, Pharmaceutical and Medical Devices. JNJ has a debt/equity ratio of 0.40 and an earnings yield of 5.18%, both lower than their respective industry averages. Moreover, JNJ’s average analyst price target is $164.87 which represents an upside potential of 8.8%. Recently, JNJ entered into a definitive agreement to acquire Momenta Pharmaceuticals, Inc. (MNTA) in an all-cash transaction for approximately $6.5 billion, which will help drive its growth

JNJ has been conducting the Phase 1/2a first-in-human clinical trial of its investigational SARS-CoV-2 vaccine, Ad26.COV2-S, recombinant in the United States and Belgium, and also planning its Phase 3 clinical trial with the National Institute of Allergy and Infectious Diseases (NIAID), contingent on regulatory approval of its previous trials. The collaboration between Janssen Pharmaceutical Companies of JNJ and Biomedical Advanced Research and Development Authority (BARDA) will help accelerate the process of this vaccine development.

Furthermore, the company’s deal with Catalent Pharma Solutions (CTLT) will help ramp up its vaccine production infrastructure. Janssen Pharmaceutical Companies have entered into an agreement with the U.S. government for the large-scale domestic manufacturing and delivery of 100 million doses of its Covid-19 vaccine candidate, Ad26.COV2.S, for use in the US following approval.

JNJ has an impressive earnings surprise history with the company beating consensus EPS estimates in each of the trailing four quarters. JNJ’s EPS is expected to grow 2.7% next quarter and 14.9% next year. The stock has grown more than 35% since its March lows.

It’s no surprise that JNJ is rated a Strong Buy in our POWR Ratings system. It also has a grade of A for Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. In the 231-stock, Medical-Pharmaceuticals industry, it is ranked #1.

Procter & Gamble Company (PG)

PG sells products to consumers and operates through five main segments — Beauty, Grooming, Health Care, Fabric Care and Home Care, and Baby, Feminine and Family Care. The stock has gained more than 40% since its March lows and hit its 52-week high of $141.44 recently. PG has a debt/equity ratio of 0.51 and a PEG ratio of 3.45, both lower than their respective industry averages.

PG’s net sales for the fourth quarter fiscal year 2020 that ended on June 30th increased 4% and core earnings per share increased 5% year-over-year. Moreover, the company returned $15.2 billion of value to shareholders in fiscal 2020.

PG has an impressive earnings surprise history with the company surpassing consensus EPS estimates in each of the trailing four quarters. The company’s EPS is expected to grow 4.2% next quarter. PG also has an annual dividend of $3.16 which yields 2.25%.

The market expects the company to report an EPS of $1.41 for the quarter ending September 2020, which represents an improvement of 2.9% over the year-ago number. PG’s consensus revenue estimate for the same quarter is $18.26, an increase of 2.6% from the previous year.

PG’s POWR Ratings reflect this promising outlook. It has an overall rating of Strong Buy with a grade of A for Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. Among the 34 stocks in the Consumer Goods industry, it’s ranked #1.

Want More Great Investing Ideas?

7 Best ETFs for the NEXT Bull Market

Beware Stocks in September?

9 “BUY THE DIP” Growth Stocks for 2020

BRK.A shares were trading at $329,500.00 per share on Thursday afternoon, down $3.00 (-1.00%). Year-to-date, BRK.A has declined -2.97%, versus a 9.41% rise in the benchmark S&P 500 index during the same period.

About the Author: Anmol Suratkal

Anmol began his career as a financial writer and evolved into an investment analyst and journalist with a special interest in risky instruments. He specializes in analyzing financial data and writes insightful articles to help investors generate solid long-term returns. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
BRK.AGet RatingGet RatingGet Rating
JNJGet RatingGet RatingGet Rating
PGGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com

Are Stocks Stuck @ 5,300?

Stocks broke above 5,300 for the S&P 500 about two weeks ago. However, it is becoming harder to make more headway when the future of Fed rate cuts is so unclear. This is pointing to a consolidation period around 5,300 for the time being. Why is that? And what comes next? Are the 2 vital topics Steve Reitmeister covers in the fresh commentary below...

3 Chip Stocks With Strong June Prospects

The chip industry is poised for sustained growth due to the rising adoption of AI-powered devices and the growing demand for chips in a wide range of end-use applications. Therefore, it could be wise to buy quality chip stocks, Silicon Motion Technology (SIMO), Amkor Technology (AMKR), and Cirrus Logic (CRUS) with strong prospects. Keep reading...

4 Software Stocks to Buy for June Gains

The software industry's bright future stems from increased cloud spending, AI adoption, emerging tech trends, and mobile app investments, driving long-term growth potential. Therefore, investors could consider buying fundamentally strong software stocks like Oracle (ORCL), ZoomInfo Technologies (ZI), Amdocs (DOX), and Creative Realities (CREX) for gains in June. Read more...

Dividend Stability and Growth in Pharma: Pfizer (PFE) vs. Bristol-Myers Squibb (BMY)

The pharma sector is primed for solid growth owing to technological advancements, growing healthcare needs, and a rise in chronic diseases. Given this backdrop, let’s analyze the fundamentals of pharmaceutical stocks Pfizer (PFE) and Bristol-Myers Squibb (BMY) to determine which of these stocks offer better dividend stability and growth. Read on...

Obscure Economic Report Spoils Stock Market

Just as investors were celebrating the good news brought by the NVDA earnings beat...along came news of better than expected economic growth from a typically little followed economic report. Next thing you know bond rates are rising and the S&P 500 (SPY) is tumbling over 1% to recent highs to well under 5,300. Its important that you understand what took place and why to appreciate what it means for stocks in the days and weeks ahead. Read on below for the full story...

Read More Stories

More Berkshire Hathaway Inc. CI A (BRK.A) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All BRK.A News