The stock market witnessed a substantial surge on Tuesday, driven by the release of October CPI data indicating a slowdown in inflation. Both month-over-month and core CPI remained below expectations, boosting investor confidence in the possibility of the Fed halting rate hikes and even considering rate cuts in the latter half of 2024.

As the market continues to rebound from the October lows, it’s crucial for investors to capitalize on the potential upside for the remainder of the year. However, the pursuit of stocks with reasonable valuations is a prudent approach, especially amidst lofty market conditions. Today, we present a method to identify stocks with robust value and improving earnings prospects.

Screen Methodology

This screening method, executed through the Research Wizard, focuses on extracting highly-ranked Zacks stocks with exceptional value attributes. The criteria include Zacks Rank #1 (Strong Buys) or #2 (Buys), price-to-earnings (P/E) and price-to-sales (P/S) ratios under the industry medians, and quarterly earnings rates above the industry median. Additionally, the screen’s proprietary algorithm incorporates upgrades and estimates revisions to filter the best seven stocks.

Identified Stocks

ArcBest (ARCB)

ArcBest, a supply chain logistics firm, offers access to 90% of U.S. LTL capacity and experienced consecutive years of over 30% revenue growth. While facing prospective challenges in 2023, the company is expected to bounce back in the following year, supported by a Zacks Rank #2 (Buy). The stock trades at a substantial discount to its own highs and the industry, accompanied by a forward P/E ratio of 11.7X and a dividend yield.

Image Source: Zacks Investment Research

TTM Technologies (TTMI)

TTM Technologies, a tech solutions manufacturer, exceeded earnings estimates in consecutive periods and holds a Zacks Rank #1 (Strong Buy). Its valuation metrics, with a forward P/E ratio of 10.5X and significant discount compared to the industry, make it an intriguing pick for investors.

Image Source: Zacks Investment Research

In conclusion, the identified stocks hold promise for investors seeking a prudent investment approach in the current market landscape. Employing a combination of fundamental and valuation analysis can lead to the discovery of attractive investment opportunities.

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