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As the market rallies day after day, and valuations in the leading stocks begin to look stretched, picking up companies with discount valuations can ease the nerves. Investors who buy stocks trading below historic valuations enjoy a certain confidence that growth investors often have to swallow.
Even better if you can find stocks that have secure business models, top Zacks Ranks, and strong earnings growth forecasts.
Image Source: Zacks Investment Research
Perion Networks
Perion Networks(PERI - Free Report) operates a global advertising technology (adtech) platform that connects advertisers with publishers and consumers. They specialize in helping advertisers reach targeted audiences through various channels, including display advertising, video advertising, and search advertising. PERI recently gained recognition for its growth in the connected TV (CTV) advertising space, which is a rapidly developing sector within the adtech industry.
Perion Networks landed on the Zacks Rank #1 (Strong Buy) list just this morning after analysts upgraded this year’s earnings estimates. FY24 earnings estimates were revised higher by 1.2%.
Additionally, sales for this year are forecast to grow 17% YoY and next year by 10%.
Image Source: Zacks Investment Research
PERI is currently trading at a one year forward earnings multiple of 7.5x, which is well below its 10-year median valuation of 11.2x. But that isn’t the only valuation method identifying a discount, the PEG Ratio, which includes earnings growth forecasts, also indicates a potential opportunity.
Perion Network’s EPS are forecast to grow at an incredible 22% annually over the next 3-5 years, giving it a PEG ratio of just 0.34, which would imply a deeply discounted valuation.
Image Source: Zacks Investment Research
Honda Motor Company
Since EVs have been garnering all the hype and buying over the last few years, traditional auto manufacturer stocks seem to have fallen out of favor. But for discerning investors this is creating a juicy opportunity.
Now that EV sales growth has begun to slow in the US, and hybrid car options have again gained popularity Honda Motor Company (HMC - Free Report) may be an exceptional opportunity. Just take a look at how HMC has outperformed Tesla (TSLA - Free Report) over the last nine months.
Image Source: TradingView
Furthermore, Honda Motor Company has a Zacks Rank #1 (Strong Buy) rating, indicating upward trending earnings revisions. Earnings estimates have been upgraded across timeframes, and sales are expected to expand 14% this year.
Image Source: Zacks Investment Research
Honda Motor Company is trading at a one year forward earnings multiple of 8.5x, which is below its 10-year median valuation of 9.1x. Although this isn’t a deep historical discount, HMC also has a PEG ratio that would indicate a deep value opportunity.
With EPS growth forecast of 20.8% annually over the next 3-5 years, HMC has a PEG ratio of 0.4.
Image Source: Zacks Investment Research
KKR & Co.
Over the last four months, private equity giant KKR & Co. (KKR - Free Report) has been on an absolute tear, crushing the returns of the already strong broader market. Thanks to its private credit business, which has exploded in the last year thanks to banks that are hesitant to make loans, investors have piled into the stock.
And it doesn’t look like the rally will end any time soon.
Image Source: Zacks Investment Research
KKR & Co. has a Zacks Rank #1 (Strong Buy) rating as analysts have nearly unanimously revised earnings estimates higher across timeframes. KKR is also expected to grow its top line by 18% this year and 15% next year.
Image Source: Zacks Investment Research
Admittedly, KKR & Co. is not trading at a historical discount as its one year forward earnings multiple of 21.2x is above its 10-year median valuation of 14.4x. But with business and profits expanding at an impressive rate, KKR too enjoys a favorable PEG ratio.
With EPS growth forecasts of 27.2% annually over the next 3-5 years, KKR has a PEG ratio of 0.78.
Image Source: Zacks Investment Research
Bottom Line
For investors prioritizing value over growth, these three stocks warrant consideration for inclusion in their portfolios, offering the potential for stable returns and long-term appreciation.
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3 Top Ranked Stocks with Bargain Valuations
As the market rallies day after day, and valuations in the leading stocks begin to look stretched, picking up companies with discount valuations can ease the nerves. Investors who buy stocks trading below historic valuations enjoy a certain confidence that growth investors often have to swallow.
Even better if you can find stocks that have secure business models, top Zacks Ranks, and strong earnings growth forecasts.
Image Source: Zacks Investment Research
Perion Networks
Perion Networks (PERI - Free Report) operates a global advertising technology (adtech) platform that connects advertisers with publishers and consumers. They specialize in helping advertisers reach targeted audiences through various channels, including display advertising, video advertising, and search advertising. PERI recently gained recognition for its growth in the connected TV (CTV) advertising space, which is a rapidly developing sector within the adtech industry.
Perion Networks landed on the Zacks Rank #1 (Strong Buy) list just this morning after analysts upgraded this year’s earnings estimates. FY24 earnings estimates were revised higher by 1.2%.
Additionally, sales for this year are forecast to grow 17% YoY and next year by 10%.
Image Source: Zacks Investment Research
PERI is currently trading at a one year forward earnings multiple of 7.5x, which is well below its 10-year median valuation of 11.2x. But that isn’t the only valuation method identifying a discount, the PEG Ratio, which includes earnings growth forecasts, also indicates a potential opportunity.
Perion Network’s EPS are forecast to grow at an incredible 22% annually over the next 3-5 years, giving it a PEG ratio of just 0.34, which would imply a deeply discounted valuation.
Image Source: Zacks Investment Research
Honda Motor Company
Since EVs have been garnering all the hype and buying over the last few years, traditional auto manufacturer stocks seem to have fallen out of favor. But for discerning investors this is creating a juicy opportunity.
Now that EV sales growth has begun to slow in the US, and hybrid car options have again gained popularity Honda Motor Company (HMC - Free Report) may be an exceptional opportunity. Just take a look at how HMC has outperformed Tesla (TSLA - Free Report) over the last nine months.
Image Source: TradingView
Furthermore, Honda Motor Company has a Zacks Rank #1 (Strong Buy) rating, indicating upward trending earnings revisions. Earnings estimates have been upgraded across timeframes, and sales are expected to expand 14% this year.
Image Source: Zacks Investment Research
Honda Motor Company is trading at a one year forward earnings multiple of 8.5x, which is below its 10-year median valuation of 9.1x. Although this isn’t a deep historical discount, HMC also has a PEG ratio that would indicate a deep value opportunity.
With EPS growth forecast of 20.8% annually over the next 3-5 years, HMC has a PEG ratio of 0.4.
Image Source: Zacks Investment Research
KKR & Co.
Over the last four months, private equity giant KKR & Co. (KKR - Free Report) has been on an absolute tear, crushing the returns of the already strong broader market. Thanks to its private credit business, which has exploded in the last year thanks to banks that are hesitant to make loans, investors have piled into the stock.
And it doesn’t look like the rally will end any time soon.
Image Source: Zacks Investment Research
KKR & Co. has a Zacks Rank #1 (Strong Buy) rating as analysts have nearly unanimously revised earnings estimates higher across timeframes. KKR is also expected to grow its top line by 18% this year and 15% next year.
Image Source: Zacks Investment Research
Admittedly, KKR & Co. is not trading at a historical discount as its one year forward earnings multiple of 21.2x is above its 10-year median valuation of 14.4x. But with business and profits expanding at an impressive rate, KKR too enjoys a favorable PEG ratio.
With EPS growth forecasts of 27.2% annually over the next 3-5 years, KKR has a PEG ratio of 0.78.
Image Source: Zacks Investment Research
Bottom Line
For investors prioritizing value over growth, these three stocks warrant consideration for inclusion in their portfolios, offering the potential for stable returns and long-term appreciation.