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4 Stocks That Are Great Bargains After Wall Street’s Sell-Off

By U.S. News & World Report

After selling off strongly in the three weeks of the year, the major U.S. indices found themselves down more than 7 percent for the year. The sell-off was much stronger in individual names, with some stocks down 20 percent or more. Despite being hard on the nerves, this market volatility has pushed some great stocks down to very attractive levels.

The screen. We used the Recognia Strategy Builder to search for large-capitalization U.S.-listed stocks that have attractive valuation levels after the recent market sell-off. We began by setting a minimum threshold on market capitalization of $7.5 billion. This ensured we were focused on the largest and most stable companies in the U.S. market.

To select companies that are currently valued well, we screened for stocks with a PEG ratio of 5 or less. PEG ratio is the price-to-earnings ratio divided by the earnings growth rate. A lower PEG ratio means that that the valuation compared to the growth rate is more attractive.

To select stocks with healthy business and strong earnings, we selected only companies with an earnings yield greater than 5 percent. Earnings yield divides the company’s earnings by the price per share — a higher earnings yield is better and indicates a superior earnings rate per dollar of equity invested.

Finally, we filtered on dividend yield and selected stocks with yields of 1.5 percent or greater. This ensures we get paid while we wait for our investments to appreciate in the long term.

General Electric Co. (ticker: GE). The largest company making our list is General Electric, with a market cap exceeding $280 billion. With business lines spanning transportation, energy, life sciences and appliances, GE is a diversified industrial conglomerate, which is a relatively safe bet for the long term. GE boasts a PEG ratio of 0.55, an earnings yield of 5.5 percent and a 3.3 percent annual dividend yield. Last week, GE reported results for the fourth quarter and full year that beat analysts’ expectations for earnings, but disappointed slightly on revenue. Revenue was negatively impacted by declines in GE’s oil and gas sector business.

Ford Motor Co. (F). Ford also makes our list, squeaking in with a PEG ratio of exactly 5. Ford also has an earnings yield of 5.2 percent and an attractive 4.9 percent dividend yield. Ford’s sales performance is excellent, with overseas markets leading the way. In 2015, Ford’s year-over-year sales growth in China was 27 percent and growth in Europe was 11 percent. On January 12, the company announced a special dividend of 25 cents per share.

Suncor Energy (SU). Suncor is a Canadian integrated oil company based in Calgary, Alberta. Although the decline in crude oil prices has hit the production part of Suncor’s business, the retail and distribution portion is still strong. This month, Suncor finalized the acquisition of Canadian Oil Sands, giving it significant new production assets in western Canada. With oil prices showing signs of having achieved a cyclical low, Suncor is poised to benefit from the subsequent recovery in energy. Suncor current has a PEG ratio of 2.54 and a 4 percent annual dividend yield.

L-3 Communications Holdings (LLL). New Jersey based L-3 Communications is an American defense, avionics and navigation systems provider. Defense companies are often considered defensive plays during down markets. L-3 is looking like a well-valued stock with an earnings yield of 6 percent and a PEG ratio of 3.1. In late October, the company released quarterly results that surpassed analysts’ expectations for earnings by a wide margin, but missed narrowly on revenue. LLL stock has traded down by nearly 14 percent since then, now giving the stock a very attractive valuation level.

Historical performance. Recognia Strategy Builder provides a backtesting capability to evaluate how well an investment strategy would have worked over a five-year period. Using a buy-and-hold strategy with quarterly re-balancing, the screen described above had a 13.7 percent annualized return compared to 6.4 percent for the Dow Jones industrial average and 8.4 percent for the Standard & Poor’s 500 index.

The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Recognia Inc. in respect of the investment in financial instruments. Investors should conduct further research before investing.

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4 Stocks That Are Great Bargains After Wall Street’s Sell-Off originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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