Here Are Some Deep Value Stocks To Buy After Black Monday
Warren Buffett once famously said, “Be fearful when others are greedy and greedy when others are fearful.” It’s hard to argue that a 1,000-point selloff in the Dow Jones Industrial Average on Monday morning is an indication of anything other than fear in the market.
Twenty seven-year financial services veteran Tim Melvin couldn’t resist being a little bit greedy on Monday morning when the entire market seemed fearful. Melvin shared with Benzinga a couple of places that he believes the recent pullback has created value among his favorite stocks.
Adams Natural Resources Fund (NYSE: PEO)
One name that Melvin was buying on the dip was Adams Natural Resources, an investment fund that buys shares of big-name energy stocks such as Chevron Corp (NYSE: CVX), ExxonMobil Corp (NYSE: XOM) and Schlumberger Ltd (NYSE: SLB).
He sees value in all of these big energy names, which are already down significantly due to the weak oil price environment, and Adams currently trades at a 15 percent discount to net asset value (NAV).
“The fund has a distribution rate of over 9 percent at this price so you will enjoy solid cash flow while you wait for energy prices to recover,” Melvin adds.
Volt Information Sciences Inc (NYSE: VISI)
Another name that Melvin couldn’t resist buying was Volt Information Sciences. He sees huge upside to the stock once management completes its efforts to dispose of non-core assets and re-focus the business.
“I have a hard time coming up with a long term scenario that does not end up with this stock higher by two or three times the current quote over the next few years,” Melvin told Benzinga.
A Word Of Caution
Although he did buy a bit on the Monday morning dip, Melvin warned that investors might want to hold off on going all-in on stocks just yet.
“I didn’t do a lot of buying as we are still closer to all-time highs than 52 week lows so there are not a lot of bargains just yet,” he explained.
Disclosure: the author owns shares of Schlumberger.
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