Investors disillusioned with Nasdaq (QQQ) trading at all-time highs may consider stocks that seem to trade in value territory.
In the communications sector, Comcast (CMCSA) extended its downtrend in the low $20s. On Sept. 25, KeyBank downgraded CMCSA stock to underweight and set an $18 price target. It forecast worsening subscriber trends for its broadband service, pressure on its cable profitability, and weaker attendance for its theme park.
CMCSA stock is attractive, since its free cash flow yield is 20%. The firm does not need to grow to reward shareholders at this stock price.
In the retail sector, Nike (NKE) posted weak quarterly results. In Q1, Nike reported a net cash position of $8.4 billion, though leverage was at around a two-times multiple. Nike paid $610 million to shareholders through dividends. The falling cash balance suggested that Nike would need to cut its dividend, instead of paying around a 5% yield.
In the auto sector, Ford Motor (F) posted weak Q3 sales. It sold 509,764 vehicles in the quarter, down by 6.6% Y/Y. Its peer, General Motors (GM), posted Q3 vehicle sales that fell by 5.5% Y/Y. Though EV sales hurt results, it enjoyed sales growth of 9% for its light-duty vehicles.
