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Long-Term Growth Rates Rising On These 5 Buy-Ranked Stocks
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The long-term growth rate is particularly useful for value investors because they’re the ones that are looking for bargain stocks to hold for several years. They’re not looking to react to every change in the market in the next couple of years or so.
Actually, most investors would benefit from some value exposure because it’s hard to research and understand all the stocks out there and then estimate correctly the right time for entry or exit. So it would be safer to get into a stock while it’s going cheap and then wait it out.
But even if we take this approach, we could go wrong because not all cheap stocks are going places. At times, there’s a very good reason for a low valuation.
So how can we tell whether to invest in a stock or not? One way is to look at the long-term growth rate, which indicates that the long-term outlook on the company is positive. We should be prepared for ups and downs however. And often, there may be more downs in the initial stages than ups. If we hang in there during tough times, there’s a good chance that we’ll eventually make some big gains.
But how long is long enough to wait out tough times? That becomes the next big question. It can be answered to an extent by tracking changes in the long-term growth rate. So for example, when the long-term growth rate on a stock is rising, it means that the stock is moving toward better prospects while a decline in this rate will mean that the stock is worth keeping an eye on. If declines persist, it may be better to offload the shares at a time that makes sense for you (so you make as small a loss or as much of a profit as possible).
So today, I’ve lined up some attractively-valued, buy-ranked stocks with rising long-term growth rates. The short-term outlook doesn’t look so bad either. Do check them out-
M.D.C. Holdings, one of the largest homebuilders in the U.S., constructs, sells and finances residential housing, and is also involved in land acquisition and development in the Denver, Phoenix, Maryland, Virginia, mid-Atlantic region, Las Vegas, Dallas and California metropolitan areas.
Zacks Rank #1 (Strong Buy)
Industry: Building Products - Home Builders (top 7%)
June quarter EPS beat by 59.8%
2020 EPS estimate up 56.9% in the last 30 days (up 26.1% from 2019)
2021 EPS estimate up 56.2% in the last 30 days (up 14.8% from 2020 estimate)
Long-term growth estimate up 329.9% in the last 30 days
Revenue growth for 2020 and 2021 estimated to be 16.4% and 16.3%, respectively
Valuation: On a price-to-forward 12 months’ earnings (P/E) basis, MDC is trading at an 8.56X multiple, which is below the median value of 10.01X over the past year. Hence the shares are undervalued.
Hologic develops, manufactures and supplies diagnostics, medical imaging systems and surgical products for women’s healthcare. Its operating segments are Diagnostics, Breast Health, GYN Surgical, Medical Aesthetics and Skeletal Health.
Zacks Rank #1
Industry: Medical – Instruments (bottom 35%) [The top 50% of 250+ Zacks-classified industries generally outperform the bottom 50% by a factor of more than 2 to 1. However, this means that there are certain common positive factors helping growth in these industries. It doesn’t mean that there are no opportunities at all in the bottom 50%. There could be companies in the bottom 50% too with strong estimated growth rates. In fact, as estimates start rising for most of the members in any industry in the bottom half, the Zacks Industry Rank of the industry would improve.]
June quarter EPS beat by 108.3%
2020 EPS estimate up 30.1% in the last 30 days (up 22.6% from 2019)
2021 EPS estimate up 31.5% in the last 30 days (up 43.0% from 2020 estimate)
Long-term growth estimate up 120.0% in the last 30 days
Revenue growth for 2020 and 2021 estimated to be 1.7% and 22.7%, respectively
Valuation: HOLX is trading at a 16.27X multiple of price to forward 12 months’ earnings, which being below the median value of 19.28X over the past year means that the shares are undervalued.
Forestar Group, formerly known as Forestar Real Estate Group, operates through the Real Estate and Natural Resources segments. The real estate segment holds real estate directly or through ventures. The natural resources segment manages oil and gas mineral interests. The company also leases land for recreational purposes and sells wood fiber, primarily from the land it holds in Georgia.
Zacks Rank #2
Industry: Real Estate – Development (bottom 20%)
June quarter EPS beat by 1,500%
2020 EPS estimate up 23.5% in the last 30 days (up 32.9% from 2019)
2021 EPS estimate up 61.6% in the last 30 days (up 11.9% from 2020 estimate)
Long-term growth estimate up 59.6% in the last 30 days
Revenue growth for 2020 and 2021 estimated to be 64.2% and 18.5%, respectively
Valuation: The current P/E of 15.70X is below the median value of 20.16X over the past year. So the shares are undervalued.
Spectrum Brands is a global consumer products company with leading brands in product categories like residential locksets, plumbing, electric shaving and grooming products, personal care products, small household appliances, specialty pet supplies, lawn and garden, and home pest control products and repellents. It has operations in around 160 countries across North America, Europe, Middle East & Africa (EMEA), Latin America and the Asia-Pacific.
2020 EPS estimate up 24.2% in the last 30 days (up 25.5% from 2019)
2021 EPS estimate up 37.7% in the last 30 days (up 16.1% from 2020 estimate)
Long-term growth estimate 22.6% in the last 30 days
Revenue growth for 2020 and 2021 estimated to be 0.4% and 2.0%, respectively
Valuation: The current P/E of 14.20X is below the median value of 15.33X over the past year. Hence the shares are undervalued.
Yamana Gold Inc.
Yamana Gold is a Canadian gold producer with significant gold production, gold and copper-gold development stage properties, exploration properties and land positions in all major mineral areas of Brazil.
Zacks Rank #2
Industry: Mining - Gold (top 26%)
June quarter EPS beat by 133.3%
2020 EPS estimate up 43.8% in the last 30 days (up 76.9% from 2019)
2021 EPS estimate up 13.3% in the last 30 days (up 47.8% from 2020 estimate)
Long-term growth estimate up 64.0% in the last 30 days
Revenue growth for 2020 and 2021 estimated to be -3.7% and 11.3%, respectively
Valuation: The current P/E multiple of 19.37X is below the median value of 24.30 over the past year. Therefore the shares are undervalued.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Long-Term Growth Rates Rising On These 5 Buy-Ranked Stocks
The long-term growth rate is particularly useful for value investors because they’re the ones that are looking for bargain stocks to hold for several years. They’re not looking to react to every change in the market in the next couple of years or so.
Actually, most investors would benefit from some value exposure because it’s hard to research and understand all the stocks out there and then estimate correctly the right time for entry or exit. So it would be safer to get into a stock while it’s going cheap and then wait it out.
But even if we take this approach, we could go wrong because not all cheap stocks are going places. At times, there’s a very good reason for a low valuation.
So how can we tell whether to invest in a stock or not? One way is to look at the long-term growth rate, which indicates that the long-term outlook on the company is positive. We should be prepared for ups and downs however. And often, there may be more downs in the initial stages than ups. If we hang in there during tough times, there’s a good chance that we’ll eventually make some big gains.
But how long is long enough to wait out tough times? That becomes the next big question. It can be answered to an extent by tracking changes in the long-term growth rate. So for example, when the long-term growth rate on a stock is rising, it means that the stock is moving toward better prospects while a decline in this rate will mean that the stock is worth keeping an eye on. If declines persist, it may be better to offload the shares at a time that makes sense for you (so you make as small a loss or as much of a profit as possible).
So today, I’ve lined up some attractively-valued, buy-ranked stocks with rising long-term growth rates. The short-term outlook doesn’t look so bad either. Do check them out-
M.D.C. Holdings, Inc. (MDC - Free Report)
M.D.C. Holdings, one of the largest homebuilders in the U.S., constructs, sells and finances residential housing, and is also involved in land acquisition and development in the Denver, Phoenix, Maryland, Virginia, mid-Atlantic region, Las Vegas, Dallas and California metropolitan areas.
Zacks Rank #1 (Strong Buy)
Industry: Building Products - Home Builders (top 7%)
June quarter EPS beat by 59.8%
2020 EPS estimate up 56.9% in the last 30 days (up 26.1% from 2019)
2021 EPS estimate up 56.2% in the last 30 days (up 14.8% from 2020 estimate)
Long-term growth estimate up 329.9% in the last 30 days
Revenue growth for 2020 and 2021 estimated to be 16.4% and 16.3%, respectively
Valuation: On a price-to-forward 12 months’ earnings (P/E) basis, MDC is trading at an 8.56X multiple, which is below the median value of 10.01X over the past year. Hence the shares are undervalued.
Hologic, Inc. (HOLX - Free Report)
Hologic develops, manufactures and supplies diagnostics, medical imaging systems and surgical products for women’s healthcare. Its operating segments are Diagnostics, Breast Health, GYN Surgical, Medical Aesthetics and Skeletal Health.
Zacks Rank #1
Industry: Medical – Instruments (bottom 35%) [The top 50% of 250+ Zacks-classified industries generally outperform the bottom 50% by a factor of more than 2 to 1. However, this means that there are certain common positive factors helping growth in these industries. It doesn’t mean that there are no opportunities at all in the bottom 50%. There could be companies in the bottom 50% too with strong estimated growth rates. In fact, as estimates start rising for most of the members in any industry in the bottom half, the Zacks Industry Rank of the industry would improve.]
June quarter EPS beat by 108.3%
2020 EPS estimate up 30.1% in the last 30 days (up 22.6% from 2019)
2021 EPS estimate up 31.5% in the last 30 days (up 43.0% from 2020 estimate)
Long-term growth estimate up 120.0% in the last 30 days
Revenue growth for 2020 and 2021 estimated to be 1.7% and 22.7%, respectively
Valuation: HOLX is trading at a 16.27X multiple of price to forward 12 months’ earnings, which being below the median value of 19.28X over the past year means that the shares are undervalued.
Forestar Group Inc. (FOR - Free Report)
Forestar Group, formerly known as Forestar Real Estate Group, operates through the Real Estate and Natural Resources segments. The real estate segment holds real estate directly or through ventures. The natural resources segment manages oil and gas mineral interests. The company also leases land for recreational purposes and sells wood fiber, primarily from the land it holds in Georgia.
Zacks Rank #2
Industry: Real Estate – Development (bottom 20%)
June quarter EPS beat by 1,500%
2020 EPS estimate up 23.5% in the last 30 days (up 32.9% from 2019)
2021 EPS estimate up 61.6% in the last 30 days (up 11.9% from 2020 estimate)
Long-term growth estimate up 59.6% in the last 30 days
Revenue growth for 2020 and 2021 estimated to be 64.2% and 18.5%, respectively
Valuation: The current P/E of 15.70X is below the median value of 20.16X over the past year. So the shares are undervalued.
Spectrum Brands Holdings Inc. (SPB - Free Report)
Spectrum Brands is a global consumer products company with leading brands in product categories like residential locksets, plumbing, electric shaving and grooming products, personal care products, small household appliances, specialty pet supplies, lawn and garden, and home pest control products and repellents. It has operations in around 160 countries across North America, Europe, Middle East & Africa (EMEA), Latin America and the Asia-Pacific.
Zacks Rank #1
Industry: Consumer Products - Discretionary (top 13%)
June quarter EPS beat by 41.7%
2020 EPS estimate up 24.2% in the last 30 days (up 25.5% from 2019)
2021 EPS estimate up 37.7% in the last 30 days (up 16.1% from 2020 estimate)
Long-term growth estimate 22.6% in the last 30 days
Revenue growth for 2020 and 2021 estimated to be 0.4% and 2.0%, respectively
Valuation: The current P/E of 14.20X is below the median value of 15.33X over the past year. Hence the shares are undervalued.
Yamana Gold Inc.
Yamana Gold is a Canadian gold producer with significant gold production, gold and copper-gold development stage properties, exploration properties and land positions in all major mineral areas of Brazil.
Zacks Rank #2
Industry: Mining - Gold (top 26%)
June quarter EPS beat by 133.3%
2020 EPS estimate up 43.8% in the last 30 days (up 76.9% from 2019)
2021 EPS estimate up 13.3% in the last 30 days (up 47.8% from 2020 estimate)
Long-term growth estimate up 64.0% in the last 30 days
Revenue growth for 2020 and 2021 estimated to be -3.7% and 11.3%, respectively
Valuation: The current P/E multiple of 19.37X is below the median value of 24.30 over the past year. Therefore the shares are undervalued.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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