4 Best Value Stocks to Invest in This December for Strong Returns

Core Insights - The U.S. stock market experienced a retreat as investors took profits and adopted a cautious stance following earlier gains in November, with trading volumes lighter ahead of the Thanksgiving holiday [1][2] Market Performance - The S&P 500 decreased by 0.38% to close at 5,998.74, ending a seven-session winning streak [2] - The Nasdaq Composite fell by 0.6% to 19,060.48, while the Dow Jones Industrial Average dropped by 138.25 points, or 0.31%, to 44,722.06 [2] Investment Focus - As December approaches, investor attention is expected to shift towards year-end positioning and factors influencing Federal Reserve policy, with value stocks becoming a more attractive investment option [3] - Value stocks often trade below their intrinsic value, providing a margin of safety amid market uncertainties [3] Valuation Metrics - The Price to Cash Flow (P/CF) ratio is highlighted as an effective valuation metric, with companies like Tyson Foods, AXIS Capital, Pfizer, and General Motors showing low P/CF ratios [4][5] - The P/CF ratio assesses the market price of a stock relative to its cash flow on a per-share basis, with lower values indicating better financial health [4][5] Financial Health Indicators - Positive cash flow indicates an increase in a company's liquid assets, enabling it to manage debt, meet expenses, reinvest, and undertake shareholder-friendly actions [7] - Negative cash flow suggests a decline in liquidity, reducing flexibility for the company [7] Value Stock Selection Criteria - A comprehensive investment strategy should consider multiple metrics, including P/CF, price-to-book, price-to-earnings, and price-to-sales ratios, along with Zacks Rank and Value Score [8][11][12][13] - Parameters for selecting true-value stocks include P/CF less than or equal to industry median, minimum stock price of $5, and substantial trading volume [10][11] Company Highlights - Tyson Foods (TSN) has a Zacks Rank of 2, with a trailing four-quarter earnings surprise of 57% and projected sales and EPS growth of 2% and 12.9%, respectively, for the current financial year [14][15] - AXIS Capital (AXS) also holds a Zacks Rank of 2, with a trailing earnings surprise of 90.3% and projected sales and EPS growth of 7.4% and 10.6%, respectively [15][16] - Pfizer (PFE) carries a Zacks Rank of 2, with a trailing earnings surprise of 74.5% and projected sales and EPS growth of 8.3% and 58.2%, respectively [17] - General Motors (GM) has a Zacks Rank of 2, with a trailing earnings surprise of 17.5% and projected sales and EPS growth of 4.8% and 34.8%, respectively [18]