5 Classic Value Stocks to Start 2026

• (0:15) - 2026 Classic Value Screen Breakdown
• (7:50)  - Top Picks To Keep On Your Radar Right Now
• (26:40) - BWA, GM, PSX, ADNT, SIRI
•                 [email protected]

Welcome to Episode #426 of the Value Investor Podcast.

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

For the last 9 years, for the first podcast of the year, Tracey has run the same Zacks Premium value stock screen called: Classic Value with Zacks #1 and #2 Rank Stocks. This screen returns the best of the cheap stocks.

She also re-visited the prior year’s classic value stocks to see how they did.

This is Tracey’s Favorite Zacks Value Stock Screen

Zacks has a lot of Premium value screens but Classic Value with Zacks #1 and #2 Rank Stocks is Tracey’s favorite.

Not only does it include Zacks Rank #1 (Strong Buy) and #2 (Buy) stocks but it must have low classic value fundamentals including a price-to-earnings (P/E) ratio under 20, a price-to-sales (P/S) ratio under 1.0, a PEG ratio, which measures value and growth, must also be under 1.0. Additionally, it looks at price to cash flow and price-to-book (P/B) ratios too.

The companies must have a stock price over $5 and average daily volume must be over 100,000 shares.

Few companies are going to be this cheap AND have the top Zacks Ranks. The top Zacks Ranks indicate rising earnings estimates.

This screen has it all if you’re looking for top value stocks.

It returned 9 stocks. Over the years, it has returned as many as 12 and as few as 5.

5 Classic Value Stocks for 2026

1. Borg Warner Inc. (BWA)

Borg Warner makes mobility solutions including modular batter systems, drive systems and electric boosting technologies.

Shares of Borg Warner jumped 51% over the last year but it’s still cheap. It has a forward P/E of just 9.5. A P/E under 10 usually means a stock is dirt cheap. Earnings are expected to rise 9% in 2025 and another 6.8% in 2026.

Borg Warner is a Zacks #2 (Buy) stock.

Should Borg Warner be on your short list for 2026?

2. General Motors Co. (GM)

General Motors manufactures automobiles worldwide. While earnings are expected to fall 2.6% in 2025, earnings are forecast to rise 12.9% in 2026.

General Motors was also in the screen in 2025. It was up 57.5% last year but it remains cheap. In Jan 2025, it had a forward P/E of just 4.8 but it’s still a value in 2026 with a forward P/E of 7.3.

General Motors is a Zacks Rank #1 (Strong Buy) stock.

Is it too late to buy General Motors after it’s big rally?

3. Phillips 66 (PSX)

Phillips 66 is an energy company that operates 13 refineries. It also handles chemicals, midstream, marketing and specialties.

Shares of Phillips 66 have jumped 22.7% in the last year. Earnings are expected to rise 0.7% in 2025 and another 97.6% in 2026. Phillips 66 has a forward P/E of just 11.8. It also pays a dividend, yielding 3.3%.

Phillips 66 is a Zacks Rank #1 (Strong Buy) stock.

Should an energy company like Phillips 66 be on your 2026 short list?

4. Adient plc (ADNT)

Adient makes automotive seating. It’s a small cap company with a market cap of $1.6 billion.

Shares of Adient jumped 21% over the last year. Earnings are expected to fall 0.5% in fiscal 2026 but rebound in fiscal 2027, growing 60.4%.

Adient is cheap with a forward P/E of just 10.6. It’s a Zacks Rank #2 (Buy) stock.

Should value investors be looking at small cap value stocks like Adient in 2026?

5. Sirius XM Holdings Inc. (SIRI)

Sirius XM is an audio entertainment company. It has a market cap of $7.2 billion.

Shares of Sirius are trading near their 5-year lows. They are only up 1.1% in the last year. However, Sirius XM pays a dividend, currently yielding 5%.

Earnings are expected to rise 55.6% in 2025 and another 11.9% in 2026. Sirius XM is dirt cheap, with a forward P/E of just 7. A P/E under 10 is extremely cheap.

Sirius XM is a Zacks Rank #2 (Buy) stock.

Should Sirius XM be on your short list for 2026?

What Else Should You Know About 2026’s Classic Value Stocks?

Tune into this week’s podcast to find out.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com