Welcome to Episode #23 of the Value Investor Podcast

Every week, Zacks value stock strategist and the Editor of Zacks Value Investor portfolio service, Tracey Ryniec, talks about all things happening in the value stock universe, including her top stock picks.

The end of the year is time for reflection and in 2016, there was a lot of reflection an investor could do.

While everything is ending rosy with the indexes hitting new all time highs, the year began with a stock market sell off that was so severe, the first 10 days of January were the worst for the stock market in 100 years.

Sheer terror gripped stock investors to start the year.

January saw the Dow Industrials finish down 5.5% and the NASDAQ fell 8%. The selling continued into February as crude dropped to new multi-year lows of $25 and there were calls that it would go as low as $10.

The small cap stocks were smoked, falling more than 15% in this time period.

It was the end of the world. Or so it seemed.

Did you buy when everyone was selling? Or did you move to the sidelines, too scared to jump in?

The Biggest Lesson of 2016

It’s hard to be a value investor. When times get rough, that’s when we should get in but fear keeps many of us on the sidelines. Stocks are the one thing that when they go on sale, Americans don’t buy them. Instead, they do the opposite.

Most investors can’t turn off their emotions and that’s okay. But the lesson of 2016 is that we can learn to control our emotions so that when we see buying opportunities, we’re able to get in the game.

Because while stocks are hitting record highs right now and everything is blissful, at some point in 2017 we’re going to get a stock market pull back. No one knows when it will be or how big it will be. But that will be another buying opportunity. If you learn to concur your fear of not buying on pullbacks, then you’ll be ready to take advantage.

Still Value Stocks Out There

While we’re waiting for a sell off to bring down valuations, the value investor can still be buying stocks. I’ve covered many stocks over the last month that were cheap and I’m giving you another set of them now as we head into the new year.

This is a collection of names from different industries but they all have forward P/Es under 15 and price-to-sales ratios under 1.0. I also looked for rising earnings estimates which hopefully will translate into earnings growth in 2017 and beyond.

Skywest (SKYW) is a regional airline, operating for United, Alaska, American and Deltas, with a forward P/E of 14.4.

Weight Watchers (WTW) is back in the news after Oprah said she lost 40 pounds on the program. January is the big time of the year for the weight loss and fitness industry. I’m making New Year’s Resolutions, are you? It trades with a forward P/E of just 12.6.

Lear Corporation (LEA) makes seating and electrical systems for cars and light trucks. It is cheap with a forward P/E of just 9.8.

Beazer Homes (BZH) is one of the largest home builders in the US. I keep highlighting the home builders because the entire industry is a value as its out of favor with investors. It has a price-to-sales ratio of only 0.3.

Aerocentury (ACY) leases aircraft to regional airlines. This is a microcap though, with a market cap of just $14 million. Yikes! Be careful. But I include it because analysts are covering it and it’s dirt cheap, with a forward P/E of 6.5.

We all make mistakes in investing. The new year gives us an opportunity to learn from what happened the prior year and to, hopefully, do things differently going forward.

Remember what happened to start the year and learn from it.

Find out more about what Tracey thinks about conquering your fear of stock sell offs in this week’s podcast.

Happy New Year!