Zacks Value Investor Highlights: Tesla, Amazon, NVIDIA Apple and Meta
For Immediate Release
Chicago, IL – October 9, 2024 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2347643/the-cheapest-mag-7-stocks-in-2024
The Cheapest Mag 7 Stocks in 2024
Welcome to Episode #385 of the Value Investor Podcast.
(0:30) - Can You Find Value Within The Magnificent 7?
(6:15) - Breaking Down Recent Performances: What Stocks To Keep On Your Radar?
(28:30) - Episode Roundup: META, GOOGL, AAPL, MSFT, AMZN, NVDA, TSLA
Podcast@Zacks.com
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
It’s time to check in on the Mag 7 stocks, formerly known as FAANG stocks or FANGMAN stocks. The Mag 7 stocks are the large cap innovators with high growth. The Mag 7 includes Tesla, NVIDIA, Amazon, Alphabet, Microsoft, Apple and Meta Platforms.
Tracey has often discussed how value investors can own both growth and value stocks. Value investors are not limited only to value stocks.
Why not look at the largest big cap growth stocks out there? Why not own some Mag 7 stocks?
What’s the Definition of a “Cheap” Stock?
But just because a value investor might buy a growth stock, doesn’t mean that investor doesn’t want attractive valuations. A “cheap” stock, for value investors, doesn’t mean the share price. Cheapness is not talking about a stock under $1.00. Cheapness means the company’s valuations are attractive.
For value investors, valuations are often determined by looking at the price-to-earnings (P/E) ratio or the price-to-sales (P/S) ratio. P/E ratios are usually the first default though, so Tracey looked at them for this podcast.
The P/E ratio is price divided by earnings.
But there’s a good case for the P/S ratio, especially when looking at technology stocks.
Tracey considers both on the podcast.
Are There Any Deals in the Mag 7 Stocks?
1. Tesla, Inc. TSLA
Tesla has underperformed so far in 2024. Shares of Tesla are down 3.1% year-to-date while the S&P 500 is up 19.4%.
But the sell-off doesn’t mean Tesla is cheap. It’s trading with a forward P/E of 113, which is at the nosebleed levels. And it has a P/S ratio of 8.7. That’s not cheap but at least it’s under 10.
Is Tesla a deal on the weakness or is it a value trap?
2. Amazon.com, Inc. AMZN
Has Amazon EVER been cheap? Investors have always paid a premium for the stock, at least on a P/E basis. But Amazon is currently trading with a forward P/E of 39, which is among its lowest P/E ratios over the last decade.
Shares of Amazon have gained 19% year-to-date yet it’s still sporting an attractive P/E. Earnings are expected to rise 63.5% this year and 23% next year, which explains it.
But it is Amazon’s P/S ratio which is the real surprise. It has P/S ratio of just 3.2, the lowest of the Mag 7.
Should Amazon be on a value investor’s short list?
3. NVIDIA Corp. NVDA
NVIDIA can’t be a deal, can it? It has been one of the hottest stocks on Wall Street this year. Shares of NVIDIA are up 157.9% year-to-date. But earnings are also expected to be up 116% this year and another 33% in fiscal 2026.
NVIDIA is trading with a forward P/E of “just” 41.5. But that is well under Tesla at 113x, and other growth stocks like Costco, which is trading at 49x.
Is NVIDIA still a buy here?
4. Apple Inc. AAPL
Warren Buffett might have sold a bunch of his Apple position in the Berkshire Hathaway portfolio this year, but he still owns a big chunk of shares. And if the greatest value investor ever owns your stock, there must be some value there, right?
But Apple isn’t that cheap. It trades with a forward P/E of 30. Earnings are expected to be up this year, but just 9.3%. Shares of Apple have gained 15.1% year-to-date.
Is Apple losing its shine with value investors in 2024?
5. Meta Platforms, Inc. META
Meta Platforms has been a quiet winner in 2024. Shares of Meta Platforms are up 65.2% year-to-date.
It’s a growth stock. Earnings are expected to rise 43.6% this year and another 12.8% next year. But Meta Platforms also has an attractive forward P/E of just 27. And it’s now paying a dividend, yielding 0.4%.
Is Meta Platforms the cheapest Mag 7 stock?
What Is the Cheapest of the Mag 7 stocks?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of GOOGL, MSFT and AMZN in her personal portfolio.]
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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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Meta Platforms, Inc. (META) : Free Stock Analysis Report