Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Genworth Financial Inc (GNW), Western Digital Corp (WDC): Pure Value, Anyone?

Page 1 of 2

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to focus some of your investing on mid-sized value stocks that exhibit low book-value-to-price and sales-to-price ratios, as well as dividend yields, the Guugenheim S&P 500 Pure Value ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Guugenheim ETF’s expense ratio — its annual fee — is a low 0.35%. The fund is on the small side, so if you’re thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF has performed rather well, beating the S&P 500 over the past three and five years. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why value?
One way to up your chances of getting great results investing is to focus not only on great companies, but also ones that are undervalued. This ETF favors value.

Genworth Financial Inc (NYSE:GNW)

More than a handful of its “pure value” companies had strong performances over the past year. Genworth Financial Inc (NYSE:GNW), for example, doubled in value, as did Western Digital Corp (NASDAQ:WDC). My colleague Robert Eberhard called Genworth Financial Inc (NYSE:GNW) cheap back in March, but it still sports a forward P/E ratio near eight, well below its five-year average. It has been making itself more attractive, in part, by selling off its wealth-management business. It’s also working on raising its rates for its long-term care insurance, as that has become quite costly (causing some rivals to simply exit the business) — and it’s cutting costs by laying off several hundred people, too. The company is positioned to profit from a rebound in housing, as well, as it insures mortgages. On the negative side, it was recently included in a probe into unpaid benefits.

Western Digital Corp (NASDAQ:WDC), along with Seagate Technology PLC (NASDAQ:STX), controls about 85% of the hard-disk drive market. Despite worries about a shrinking PC market, bulls see a massive and growing need for storage, and view hard-disk drives as inexpensive solutions for that. With a forward P/E ratio near seven, Western Digital Corp (NASDAQ:WDC) appears undervalued indeed, and it has boosted its presence in solid-state drives by a recent purchase of STEC, Inc. (NASDAQ:STEC). The stock yields 1.6%.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!