Factors that induce investors to buy specific stock(s) are numerous, however depending on the style of investing, investors give higher priority to few factors that steer their investing decisions. Example value investors give higher priority to stock valuations over qualitative aspects.

This doesn’t mean that qualitative aspects are not considered, their influence on the investing decision are less compared to valuation of the stock.

Buying quality stocks below their book value is the basic principle of value investing, additional catalysts are a great value addition. The value investing strategy is buying stocks that the market undervalued due to misconceptions, like overestimating the possible outcome of a negative situation, inability to foresee the possible outcome of a positive action from the company, underestimating positive events and/or lacking confidence on the industry and/or company’s future growth prospects. With this background, it is time to present Top Picks based on the value investing theme recommended by contributors at Stock Chase.

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5 Undervalued Stocks to Buy Now

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Ross Healy, Chairman of Strategic Analysis Corp recommends Yamana Gold Inc. (YRI-T) as a Top Pick,

“Trading at about a 30% discount to its BV. The company has been working hard to improve profitability. It needs higher bullion prices to break out and get going. Insider trading on this is very strong. Dividend yield of 0.6%.”

Ross Healy, Chairman of Strategic Analysis Corp recommends Enbridge Income Fund Holdings (ENF-T) as a Top Pick,

“This has been trading for some years between its BV and about 80% of Book. Nice FMV and nice upside potential. Historically cheap, and doesn’t think there is a big risk in it. Dividend yield of 7.8%.” 

Josef Schachter, President of Schachter Asset Management recommends Bonavista Energy Corp (BNP-T) as a Top Pick,

“Management has done a good job.  71% natural gas.  They pay a dividend.  Book value is $6.63.” Price of the stock is $2.010. 

Josef Schachter, President of Schachter Asset Management recommends Crew Energy (CR-T) as a Top Pick,

“74% natural gas.  They just added another facility.  Book value was $5.70.”

Josef Schachter, President of Schachter Asset Management recommends Bellatrix Exploration Ltd (BXE-T) as a Top Pick,

“75% Nat Gas.  Spirit river play.  Their book value is $15.93.  It has already had a bounce since tax loss selling ended.”

Creating a boundary to the style of investing is restricting the growth of our portfolios. All the recommendations above have growth investing as the second strongest fundamental driver behind their positive outlook while value investing being the prime driver.

 

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