4 Value Stocks to Buy as Wall Street Awaits Fed's Rate Decision

Market Overview - U.S. stock markets showed mixed reactions as investors awaited the Federal Reserve's decision on interest rates, with the S&P 500 up 0.4% to 6,074.08, Nasdaq Composite rising 1.2% to a record 20,173.89, and Dow Jones Industrial Average down 0.3% to 43,717.48 [1] Federal Reserve and Interest Rates - The Federal Reserve is expected to announce another rate cut, maintaining an accommodative monetary stance, but may signal a slower pace of reductions in the future, which could influence investor strategies [2] Value Stocks - Value stocks are highlighted as a compelling investment option, trading below their intrinsic value and offering a margin of safety during market fluctuations [2] - The Price to Cash Flow (P/CF) ratio is emphasized as an effective valuation metric for evaluating value stocks, with lower ratios indicating better value [3][6] Financial Health and Cash Flow - Positive cash flow is crucial for a company's liquidity, allowing it to settle debts, meet expenses, reinvest, and pay back shareholders, while negative cash flow indicates declining liquidity [8] - Analysts caution that earnings can be manipulated, making cash flow a more reliable indicator of a company's financial health [7] Investment Strategy - A comprehensive investment strategy should include multiple valuation metrics such as price-to-book, price-to-earnings, and price-to-sales ratios, along with a favorable Zacks Rank and Value Score to avoid value traps [9][12][13] Selected Value Stocks - Tyson Foods (TSN) has a Zacks Rank 1, with a trailing four-quarter earnings surprise of 57% and a Value Score of A, with shares rising 15.5% in the past year [15][16] - General Motors (GM) holds a Zacks Rank 2, with a trailing four-quarter earnings surprise of 17.5% and shares up 47.4% in the past year [17] - Fresenius Medical Care (FMS) also has a Zacks Rank 2, with a trailing four-quarter earnings surprise of 19% and shares advancing 15.3% in the past year [18] - Deluxe Corporation, with a Zacks Rank 2 and a trailing four-quarter earnings surprise of 18.4%, has seen shares jump 21.9% in the past year [19]