Mimicking the massive sell-offs in major global indices, the U.S. equity markets are expected to open deep in the red today. Notably, Dow and Nasdaq futures are down nearly 4% and 5%, respectively. Concerns over China have been triggering volatility in global equity markets. Earlier in August, we saw the world’s second largest economy devalue its currency by close to 2% in order to ramp up exports – its key growth driver.

While the idea was to spur growth, the surprise devaluation of the yuan made investors all the more apprehensive about China. Notably, the sell-off in Chinese stock markets, which erased more than $5 trillion dollars off the global equity markets, has heightened after the devaluation on Aug 11. As a result, the Shanghai Composite Index nosedived 19% over the past 5 days, entirely wiping away its year-to-date gain.

Apart from this, falling crude prices and profound trouble in other major global economies including the Eurozone, Russia and Japan, remain the matters of grave concern. Moreover, dismal performance of the NASDAQ (down 9% in the past month) as well as the Dow Jones (down 8%) adds to investors’ worries. As a result, many investors remain doubtful regarding their investment options.

Nevertheless, investors have something to look forward to as the domestic market picks up pace. The housing starts touched an eight-year high of 1.21 million in Jul 2015, while the unemployment rate fell drastically to almost 5%. Additionally, the auto industry is booming, while several other sectors, particularly finance, is ready to shine driven by an anticipated rise in benchmark interest rates by the end of 2015.

Call for Expert Advice?

Clearly, prospects for local economy appear bright, and investing in domestic stocks can prove to be a wise decision. Moreover, the current fall in indexes can be a good entry point for investors to pour money into value stocks with strong fundamentals. But again, as fall in stock indexes reflect poor price performances, investors are likely to get caught into “value traps” by picking stocks that are trading at an artificial discount.

In situations like these, broker recommendations become crucial for making investment decisions. Brokers have a deeper understanding of stocks and the sectors, so their advice should lead to better returns. Also, an average of all broker recommendations provides the most likely picture of the stock’s future.

4 Broker-Favorite Value Stocks to Buy Now

Keeping the above factors in mind, we have shortlisted 4 broker-favorite value stocks from 4 different sectors; with the help of Zacks stock screener and our new style score system. All these stocks are rated by at least 5 brokers and more than 80% of them have a bullish stance. Moreover, these stocks have a Value score of ‘A’ and Zacks Rank #2 (Buy) or better.

Our Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of ‘A’ or ‘B’ when combined with a Zacks Rank #1 (Strong Buy) or #2 offer the best upside potential.

Gilead Sciences Inc. (GILD - Analyst Report)

Gilead Sciences is an independent biopharmaceutical company which provides accelerated medical solutions for patients. The company is focused on discovery, development and commercialization of drugs for several indications.

Number of Brokers Rated the Stock: 16

Brokers with Buy Recommendation: 87.5%

Zacks Rank #1

DSW Inc. (DSW - Snapshot Report)

DSW is an OH-based specialized footwear retailer. In addition to operating DSW stores, the company also supplies its products to related retailers within as well as outside the U.S.

Number of Brokers Rated the Stock: 11

Brokers with Buy Recommendation: 90.9%

Zacks Rank #2

Cardtronics Inc. (CATM - Snapshot Report)

Cardtronics, functioning in the business services industry, is the world's largest non-bank ATM operator with over 80,000 ATMs under it. The TX-based company operates ATMs for regional as well as Fortune 500 retailers across the U.S., the U.K., Mexico, Canada and Germany.

Number of Brokers Rated the Stock: 9

Brokers with Buy Recommendation: 88.89%

Zacks Rank #2

CECO Environmental Corp. (CECE - Snapshot Report)

Based in Cincinnati, CECO Environmental is a player in the pollution control space. The company manufactures fiber bed mist eliminators and sells it to several industries including chemical, plastic and food processing.

Number of Brokers Rated the Stock: 5

Brokers with Buy Recommendation: 100%

Zacks Rank #2

Bottom Line

Value investing is probably the most predictable investment style in the current market scenario. It is the safest style too. However, investors can play more cautiously by picking value stocks with positive broker recommendations, as brokers have a better insight into the fundamental strength as well as prospects of stocks, given their access to data, research and reports.

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