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The markets may have been on a tear this past week with the elections and the vaccine announcement. But that doesn’t mean we can’t find solid value picks.
By solid value picks I mean Zacks #1 ranked stocks that are seeing upward revision in estimates, but remain relatively undervalued. It could be that they’ve simply escaped investor attention or that they’ve been oversold and now display an attractive risk/reward profile. Some also pay a dividend, which is an added bonus.
It’s also worth noting that while some stocks have become grossly overvalued as a part of the relief rally as third quarter results continued to demonstrate that companies were rebounding strongly from the pandemic, there are a host of others that look like opportunities.
There’s really no reason not to continue buying stocks that don’t reflect their earnings power and potential, especially considering that we’re very close to a vaccine. When that becomes more broadly available next year, there’s bound to be further optimism in the market that will continue to drive prices.
So here are some stocks from a variety of industries that should do well over the next few quarters-
Plantronics, Inc.
Plantronics is a leading provider of audio communications technology for businesses and consumers. Plantronics is used by every company in the Fortune 100, as well as 911 dispatch, air traffic control and the New York Stock Exchange.
Zacks Rank #1
Value Score B
Industry Communication – Components (top 21%)
The company’s fiscal year ends in March. So we have estimates for fiscal 2021 and 2022 ending in March. Accordingly, the 2021 estimate has jumped $1.23 (69.5%) from 30 days ago. The 2022 estimate has jumped 37 cents (15.5%) during the same time period.
The company isn’t currently paying a dividend.
On the basis of price to forward sales (P/S), the stock trades at a multiple of 0.53X, which is between its median value of 0.39X and annual high of 0.76X. Any number below 1 is attractive in terms of valuation. In this case, it is also well below the high point achieved this year, so there is scope for further upside.
Santander Consumer USA Holdings Inc.
Santander offers vehicle finance and unsecured consumer lending products.
Zacks Rank #1
Value Score A
Industry Financial - Consumer Loans (top 34%)
Santander’s year ends in December. The revision in its 2020 estimates is nothing but dramatic. It has gone from a mere 29 cents to $1.87, an increase of 544.8% from what it was 30 days ago. The 2021 estimate jumped 84 cents (58.7%).
Its dividend yields 4.17%.
The stock is trading at 0.85X P/S, which is closer to the median value of 0.77X than the annual high of 1.08X. So there’s scope for further upside.
Avnet is one of the world’s largest distributors of electronic components and computer products to OEMs, ODMs, EMS providers, VARs.
Zacks Rank #1
Value Score B
Industry Electronics - Parts Distribution (top 2%)
Estimate revisions for Avnet have also been encouraging. For the fiscal year ending June 2021, estimates are up 24 cents (15.2%) while for 2021, they are up 34 cents (14.7%).
Avnet’s dividend yields 3.14%.
The stock trades at 0.16X P/S, which is below the median value of 0.17X, indicating potential for further upside.
Old Republic is an insurance holding company with subsidiaries that actively market, underwrite and provide risk management services for a wide variety of coverages mostly in the general and title insurance areas.
Zacks Rank #1
Value Score A
Industry Insurance - Multi line (top 43%)
The company’s 2020 and 2021 estimates are up 20 cents (11.8%) and 10 cents (6.5%), respectively.
Its dividend yields 4.92%.
The stock trades at 0.80X P/S, which is below the median value of 0.83X, indicating potential for further upside.
Industrias Bachoco is Mexico’s undisputed leader in poultry production and one of the top ten producers in the world. It also produces and distributes eggs, swine and balanced feed.
Zacks Rank #1
Value Score A
Industry Food - Meat Products (top 48%)
The company’s 2020 and 2021 estimates are up 68 cents (24.1%) and 67 cents (26.3%), respectively.
Its dividend yields 1.82%.
The stock trades at 0.63X P/S, which is at the median value of 0.63X over the past year, indicating potential for further upside.
Mohawk is a leading global manufacturer of flooring products like carpets, rugs, ceramic tiles, laminates, as well as wood, stone and vinyl flooring that beautify residential and commercial space. It has operations in Australia, Brazil, Canada, Europe, India, Malaysia, Mexico, New Zealand, Russia and the U.S.
Zacks Rank #1
Value Score B
Industry Textile - Home Furnishing (top 21%)
The company’s 2020 and 2021 estimates are up $1.85 (29.4%) and $1.47 (17.0%), respectively.
The company doesn’t pay a dividend.
The stock trades at a multiple of 0.93X, which is between its median value of 0.80X and annual high of 1.08X, indicating upside potential.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
6 Top-Rated Value Stocks To Buy Today
The markets may have been on a tear this past week with the elections and the vaccine announcement. But that doesn’t mean we can’t find solid value picks.
By solid value picks I mean Zacks #1 ranked stocks that are seeing upward revision in estimates, but remain relatively undervalued. It could be that they’ve simply escaped investor attention or that they’ve been oversold and now display an attractive risk/reward profile. Some also pay a dividend, which is an added bonus.
It’s also worth noting that while some stocks have become grossly overvalued as a part of the relief rally as third quarter results continued to demonstrate that companies were rebounding strongly from the pandemic, there are a host of others that look like opportunities.
There’s really no reason not to continue buying stocks that don’t reflect their earnings power and potential, especially considering that we’re very close to a vaccine. When that becomes more broadly available next year, there’s bound to be further optimism in the market that will continue to drive prices.
So here are some stocks from a variety of industries that should do well over the next few quarters-
Plantronics, Inc.
Plantronics is a leading provider of audio communications technology for businesses and consumers. Plantronics is used by every company in the Fortune 100, as well as 911 dispatch, air traffic control and the New York Stock Exchange.
Zacks Rank #1
Value Score B
Industry Communication – Components (top 21%)
The company’s fiscal year ends in March. So we have estimates for fiscal 2021 and 2022 ending in March. Accordingly, the 2021 estimate has jumped $1.23 (69.5%) from 30 days ago. The 2022 estimate has jumped 37 cents (15.5%) during the same time period.
The company isn’t currently paying a dividend.
On the basis of price to forward sales (P/S), the stock trades at a multiple of 0.53X, which is between its median value of 0.39X and annual high of 0.76X. Any number below 1 is attractive in terms of valuation. In this case, it is also well below the high point achieved this year, so there is scope for further upside.
Santander Consumer USA Holdings Inc.
Santander offers vehicle finance and unsecured consumer lending products.
Zacks Rank #1
Value Score A
Industry Financial - Consumer Loans (top 34%)
Santander’s year ends in December. The revision in its 2020 estimates is nothing but dramatic. It has gone from a mere 29 cents to $1.87, an increase of 544.8% from what it was 30 days ago. The 2021 estimate jumped 84 cents (58.7%).
Its dividend yields 4.17%.
The stock is trading at 0.85X P/S, which is closer to the median value of 0.77X than the annual high of 1.08X. So there’s scope for further upside.
Avnet, Inc. (AVT - Free Report)
Avnet is one of the world’s largest distributors of electronic components and computer products to OEMs, ODMs, EMS providers, VARs.
Zacks Rank #1
Value Score B
Industry Electronics - Parts Distribution (top 2%)
Estimate revisions for Avnet have also been encouraging. For the fiscal year ending June 2021, estimates are up 24 cents (15.2%) while for 2021, they are up 34 cents (14.7%).
Avnet’s dividend yields 3.14%.
The stock trades at 0.16X P/S, which is below the median value of 0.17X, indicating potential for further upside.
Old Republic International Corp. (ORI - Free Report)
Old Republic is an insurance holding company with subsidiaries that actively market, underwrite and provide risk management services for a wide variety of coverages mostly in the general and title insurance areas.
Zacks Rank #1
Value Score A
Industry Insurance - Multi line (top 43%)
The company’s 2020 and 2021 estimates are up 20 cents (11.8%) and 10 cents (6.5%), respectively.
Its dividend yields 4.92%.
The stock trades at 0.80X P/S, which is below the median value of 0.83X, indicating potential for further upside.
Industrias Bachoco, S.A. de C.V. (IBA - Free Report)
Industrias Bachoco is Mexico’s undisputed leader in poultry production and one of the top ten producers in the world. It also produces and distributes eggs, swine and balanced feed.
Zacks Rank #1
Value Score A
Industry Food - Meat Products (top 48%)
The company’s 2020 and 2021 estimates are up 68 cents (24.1%) and 67 cents (26.3%), respectively.
Its dividend yields 1.82%.
The stock trades at 0.63X P/S, which is at the median value of 0.63X over the past year, indicating potential for further upside.
Mohawk Industries, Inc. (MHK - Free Report)
Mohawk is a leading global manufacturer of flooring products like carpets, rugs, ceramic tiles, laminates, as well as wood, stone and vinyl flooring that beautify residential and commercial space. It has operations in Australia, Brazil, Canada, Europe, India, Malaysia, Mexico, New Zealand, Russia and the U.S.
Zacks Rank #1
Value Score B
Industry Textile - Home Furnishing (top 21%)
The company’s 2020 and 2021 estimates are up $1.85 (29.4%) and $1.47 (17.0%), respectively.
The company doesn’t pay a dividend.
The stock trades at a multiple of 0.93X, which is between its median value of 0.80X and annual high of 1.08X, indicating upside potential.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>