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

By Andrea Riquier

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

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 (link).

But there have been some headfakes along the way (link), and with stock markets at all-time highs (link), some investors still need convincing (link) 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 (link).

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 (link).

Company                          Sector              Foreign sales %  Forward price/earnings 
Aptiv PLCUS:APTV                 Discretionary       73               17.5 
Energizer Holdings, Inc.US:ENR    Staples             30               13.7 
Integra LifeSciencesUS:IART      Health care         29               20.1 
Dentsply SironaUS:XRAY           Health Care         68               20.9 
Masco Corp.US:MAS                Industrials         21               17.9 
Textron.US:TXT                   Industrials         38               11.7 
Univar Solutions US:UNVR         Industrials         43               14.8 
WoodwardUS:WWD                   Industrials         44               19.3 
Microchip TechnologyUS:MCHP      Info tech           80               16.5 
Motorola SolutionsUS:MSI         Info tech           41               18.9 
ON SemiconductorUS:ON            Info tech           85               14.8 
SolarWinds Corp. US:SWI          Info tech           39               20.2 
Valvoline US: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 (link)

-Andrea Riquier; 415-439-6400;


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12-23-19 0919ET

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