If you're a go-getter, you work hard, play hard, and expect your investments to keep working when you're off doing other things. It's even better if you're able to find stocks trading at a great value.
Our contributors have found three value stocks that could be right up your alley, including a company every go-getting active person should know in Garmin Ltd. (NASDAQ:GRMN), a savvy contrarian play in GameStop Corp (NYSE:GME), and one of the most powerful entertainment companies in the world in Walt Disney Co. (NYSE:DIS).
If you're looking for great value for your money, keep reading to learn what makes these stocks a value for the go-getter investor in all of us.
A standard bearer for go-getter athletes
Travis Hoium (Garmin): When I think of go-getters I think of people who are up early going for a run or bike ride and home in time to pack the kids up for school before they go to work. And more likely than not, those go-getters are very familiar with Garmin's growing line of GPS watches and activity trackers. For runners, bikers, hunters, explorers, and swimmers, Garmin's devices have become an indispensable tool that makes their activities more efficient and rewarding.
From an investment perspective, Garmin has managed to transform its business from a company reliant on the auto market, to a diverse GPS company. The auto business is slowly dying as GPS and maps become standard on everyone's phones, but Garmin is still a leader in aviation and marine markets. And the sports market has been a big winner for the company as more athletes are looking to track information about their activities, and Garmin exploits that trend.
All investors should look for strong companies they know well, and if you're a go-getter in life you probably know Garmin's products. They're in a leading position in a very profitable niche of the market, and if the company can continue to improve those products and slowly expand into new markets like action cameras and corporate wellness it could be a growth company for many years to come. Trading at 15 times last year's earnings, it should satisfy your bargain-hunter instinct, too.
This retailer isn't dead yet
Brian Feroldi (GameStop): Investors have soured on several retail concepts recently, which makes sense given the industry's struggles. Video game retailer GameStop has been hit particularly hard. Shares have declined so much that they now trade for less than seven times earnings. The drop has pushed the company's dividend yield above 6.7%. Those figures suggest that investors believe that this company won't survive the mass migration to digital video games.
While that view may ultimately be proven correct, I see reasons to take the other side of that trade, especially at today's price.
First, physical consoles remain very popular. The new Nintendo Switch is flying off the shelves and caused GameStop's revenue to grow 4% last quarter. With a new Xbox system on its way, it is likely that the company's hardware sales will perk up as consumers rush to get their hands on the latest and greatest system.
Second, GameStop's collectibles and technology brands businesses are showing strong growth. Last quarter these segments grew by 39% and 21%, respectively, and management believes they could each become billion dollar businesses in time. If that outlook is proven correct then it should go a long way toward offsetting any softness in the video game business.
Finally, GameStop is driving hard to build out its digital gaming business. Revenue from this division already exceeds $1 billion and could continue to grow as more consumers shift their spending online.
Add all of these initiatives together and market watchers believe that GameStop's profits are going to grow in excess of 7% annually over the next five years. If true then GameStop's stock could offer investors double-digit total returns from here.
The most powerful entertainment brands on earth are on sale
I'll go so far as to say that it couldn't be happening at a worse time, too, with the sports network's financial obligations for sports broadcasting rights set to soar in coming years. ESPN has already started slashing costs to help offset these increases, but the double-whammy of falling cable subscribership is making it extra hard to bridge that gap.
Here's the thing, though: It's not what people are watching that is changing so much as how people watch things. Live sports are still hugely popular. It's just that nobody wants to give the cable company hundreds of extra dollars every year, paying for dozens of junk channels they're not interested in, just to watch sports.
In time, Disney will adapt; it's only a matter of time before ala carte streaming becomes the norm, and you can be sure that ESPN -- along with all of the other multi-billion dollar properties Disney owns -- will be front and center and generating huge cash flows for the House of Mouse, however consumers want to get it.
In the meantime, Disney shares trade for less than 19 times last year's earnings, a veritable bargain in a pricey market for such an amazing business with so many valuable entertainment properties. Think about it this way: How many other companies can you name with a product people will still be lining up to pay for a century from now?
That's what makes Disney a steal at current prices, no matter what's happening with ESPN and cable subscribers.