Value Stocks Showed Some Life in August: Five to Consider

Value Stocks Showed Some Life in August: Five to Consider

By John Dorfman

September 1, 2025 (Maple Hill Syndicate) Maybe, just maybe, the moment that value investors have been waiting for has arrived. In August, value stocks were up more than 3%, while growth stocks returned a little over 1%.

The value revival, if it's real, has been a long time coming. Growth has outperformed value in eight of the past 10 years, often by a large margin. Value traditionally had been the leader. It beat growth in 18 of the 27 years from 1980 through 2006.

Value stocks are cheap based on the ratio of the stock price to a company's earnings or net worth. Growth stocks have rapidly growing earnings, or at least are expected to have them soon.

My gauges for the figures above are the Russell 3000 Growth Total Return Index and the Russell 3000 Value Total Return Index. You can choose other yardsticks if you wish, but they lead to similar results.

Sea Change

Clearly, there's been a sea change since the Great Recession (October 2007 through March 2009). The most common explanation is that growth has become a scarcer commodity, hence more valuable.

My own theory is that the rising popularity of index investing is the key. Index investors buy all the stocks in an index (usually the Standard & Poor's 500). Since a few large growth stocks dominate the S&P 500, index investing is growth investing in disguise.

It's too early to tell whether the value comeback will endure. But assuming the value revival has legs, here are five stocks worth looking at. Each of them, in my judgment, displays both value and momentum.

Newmont [NEM]

Newmont Corp., based in Denver, Colorado, is the world's largest gold miner, with 17 mines in the Americas, Africa, Australia and elsewhere. Gold often does well at times of international tension, inflation, or big government deficits.

I believe that right now we have all three. No wonder that Newmont shares are up 93% this year. Even after that rise, the stock price seems reasonable to me at 13 times earnings.

Axos [AX]

Axos Financial Inc., based in Las Vegas, Nevada, is an online-only bank. Look ma, no branches.

The company has grown its revenue about 19% a year over the past five years, and earnings a little faster than that. The stock is up 32% year-to-date but still sells for about 12 times earnings. It doesn't have a lot of Wall Street coverage, but of the seven analysts who do cover it, six recommend it.

Cal-Maine [CALM]

Unusually cheap, weighing in at about five times earnings, is Cal-Maine Foods Inc., based in Ridgeland, Mississippi. It's the largest U.S. egg producer, and I've recommended it several times in this column.

Last year Cal-Maine was up 79%, and this year through August it's up an additional 12%. In addition to being cheap, it's debt-free, a quality that to me is as tasty as a fresh omelet.

Rigel [RIGL]

A small-cap stock ($697 million market value) that looks interesting is Rigel Pharmaceuticals Inc., based in San Francisco. It soared above $1,000 in the biotech-stock frenzy of 2001. Since then, the shares have fallen to about $39.

Lately Rigel has seen big sales increases for a few of its drugs, notably Tavelisse, which combats a condition in which the body's immune system attacks its own blood platelets. The shares have more than doubled this year, but still trade at about seven times earnings.

Oshkosh [OSK]

Oshkosh Corp., based in Oshkosh, Wisconsin, is an industrial conglomerate. Two of its business lines that seem promising to me now are military transport vehicles and aerial lift platforms.

Less promising are units that depend on municipal and state governments as customers: fire engines and garbage trucks, for example. The stock, up 48% this year, sells for 14 times earnings.

Performance

The column you're reading is the 47th one I've written on stocks with both value and momentum. The average one-year return (on 45 columns) has been 12.3%, beating the S&P 500 Total Return Index at 10.8%.

Bear in mind that my column results are hypothetical and shouldn't be confused with results I obtain for clients. Also, past performance doesn't predict the future.

My picks in this series have been profitable 30 times out of 45, and have beaten the index 23 times.

My selections from a year ago were unsuccessful. I recommended four stocks. Two rose and two fell. Overall, my return was a loss of 5.7%, while the S&P returned 14.0%. The worst loser was Miller Industries Inc. [MLR], which declined 33%.

John Dorfman is chairman of Dorfman Value Investments in Boston, Massachusetts. His firm or clients may own or trade the stocks discussed here. He can be reached at jdorfman@dorfmanvalue.com.