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5 Buy Ranked Growth Stocks at Attractive Valuations
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All the major indexes have had a good year, which is kind of weird considering the way the pandemic disrupted everything. But we have the really large cap tech stocks to thank for carrying the markets through the downturn when most people started operating from home.
Then, just as other segments started rebounding, we had a relatively non-disruptive election and the vaccine news. Now it seems that we’re also going to get another relief package before the holidays. So naturally, things couldn’t be better for sentiments and investors are buying enthusiastically.
Usually, at times like this, it is the value stocks that appear more attractive because they’re the ones seeing most of the upside. Growth stocks usually become too expensive. But that doesn’t mean we can’t find stocks with the best of both worlds if we give it a try.
So today, I’ve handpicked a few stocks that we can think of as growth stocks at attractive valuations, or value stocks with good growth prospects.
Of course, they all have a Zacks rank of #1 (Strong Buy) or #2 (Buy) because stocks with these ranks have historically outperformed the market.
They also have attractive Value, Growth and VGM Scores, meaning that they make sense for almost everyone, irrespective of their risk appetite.
They also belong in attractive industries, because it has been seen historically that the industry a stock belongs to accounts for half of its total price appreciation.
Also, analysts are positive about their long-term growth prospects, which is why they have attractive long-term growth estimates.
And of course they are attractively valued, with price to earnings growth (PEG) ratios of 1 or less, meaning that they are priced at or below their earnings growth potential.
Asbury Automotive is one of the largest automotive retailers, offering an extensive range of automotive products and services. It sells both new and used vehicles along with related financing and insurance, vehicle maintenance and repair services, replacement parts, and service contracts through franchised dealership locations and stand-alone stores. Used vehicle sales are made to individuals, retailers and dealers at auctions.
Zacks Rank #2
Value Score A, Growth Score A, Momentum Score B, VGM Score A
Industry: Automotive - Retail and Whole Sales (top 3%)
Topped the Zacks Consensus Estimate by 1.5% last quarter.
Earnings are expected to grow 31.8% this year and 14.8% in the next year on revenue growth of -1.8% and 24.6%, respectively.
Long term earnings growth estimate is 18.5%
PEG 0.61
KnightSwift Transportation Holdings Inc. (KNX - Free Report)
Knight-Swift Transportation, the result of a merger between Knight Transportation, Inc. and Swift Transportation Company, is the largest truckload carrier in North America with an active M&A policy for growth. It serves customers throughout North America, providing them with numerous efficient and low-cost truckload transportation, intermodal and logistics services.
Its three operating segments are Trucking (82% revenue share), Intermodal (9%) and Logistics (7%).
By 2035, Knight-Swift intends to reduce carbon emissions generated by its fleet by 50%.
Zacks Rank #2
Value Score A, Growth Score B, Momentum Score C, VGM Score A
Industry: Transportation - Truck (top 9%)
Topped the Zacks Consensus Estimate by 25.4% last quarter.
Earnings are expected to grow 24.9% this year and 23.1% in the next year on revenue growth of -3.6% and 8.8%, respectively.
Tempur Sealy develops, manufactures and markets bedding products primarily in North America but also internationally. It provides mattresses, adjustable bases, pillows and other sleep and relaxation products.
Zacks Rank #2
Value Score A, Growth Score A, Momentum Score A, VGM Score A
Industry: Retail - Home Furnishings (top 12%)
Topped the Zacks Consensus Estimate by 34.9% last quarter.
Earnings are expected to grow 72.0% this year and 13.4% in the next year on revenue that is expected to grow 16.1% and 8.2%, respectively.
JELD-WEN Holding designs, produces and distributes interior and exterior doors, wood, vinyl and aluminum windows and related products for new construction and repair and remodeling of residential homes and non-residential buildings.
Zacks Rank #2
Value Score A, Growth Score A, Momentum Score A, VGM Score A
Industry: Building Products - Wood (top 13%)
Topped the Zacks Consensus Estimate by 20.9% last quarter.
Earnings are expected to grow 24.2% this year and 25.0% in the next year on revenue growth of -2.4% and 5.8%, respectively.
Honda Motor Co. is a leading manufacturer of automobiles and the largest producer of motorcycles in the world. The company is recognized internationally for its wide variety of products, ranging from small general-purpose engines to specialty sports cars, which incorporate its efficient internal combustion engine technology.
Automobiles (66.7% of revenue), Motorcycles (13.7%), Financial Services (17.4%) and Life Creation and Other segment (2.2%) are its four operating segments. Most of the automobile revenue is generated in the U.S. while most of the motorcycle revenue is generated in various Asian markets.
Zacks Rank #1
Value Score A, Growth Score B, Momentum Score D, VGM Score A
Industry: Automotive – Foreign (top 15%)
Topped the Zacks Consensus Estimate by 19.8% last quarter.
Earnings are expected to grow 3.8% this year and 41.7% in the next year on revenue growth of -11.6% and 8.3%, respectively.
Long term growth estimate is 19.2%
PEG 0.61
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
5 Buy Ranked Growth Stocks at Attractive Valuations
All the major indexes have had a good year, which is kind of weird considering the way the pandemic disrupted everything. But we have the really large cap tech stocks to thank for carrying the markets through the downturn when most people started operating from home.
Then, just as other segments started rebounding, we had a relatively non-disruptive election and the vaccine news. Now it seems that we’re also going to get another relief package before the holidays. So naturally, things couldn’t be better for sentiments and investors are buying enthusiastically.
Usually, at times like this, it is the value stocks that appear more attractive because they’re the ones seeing most of the upside. Growth stocks usually become too expensive. But that doesn’t mean we can’t find stocks with the best of both worlds if we give it a try.
So today, I’ve handpicked a few stocks that we can think of as growth stocks at attractive valuations, or value stocks with good growth prospects.
Of course, they all have a Zacks rank of #1 (Strong Buy) or #2 (Buy) because stocks with these ranks have historically outperformed the market.
They also have attractive Value, Growth and VGM Scores, meaning that they make sense for almost everyone, irrespective of their risk appetite.
They also belong in attractive industries, because it has been seen historically that the industry a stock belongs to accounts for half of its total price appreciation.
Also, analysts are positive about their long-term growth prospects, which is why they have attractive long-term growth estimates.
And of course they are attractively valued, with price to earnings growth (PEG) ratios of 1 or less, meaning that they are priced at or below their earnings growth potential.
Take a look-
Asbury Automotive Group, Inc. (ABG - Free Report)
Asbury Automotive is one of the largest automotive retailers, offering an extensive range of automotive products and services. It sells both new and used vehicles along with related financing and insurance, vehicle maintenance and repair services, replacement parts, and service contracts through franchised dealership locations and stand-alone stores. Used vehicle sales are made to individuals, retailers and dealers at auctions.
Zacks Rank #2
Value Score A, Growth Score A, Momentum Score B, VGM Score A
Industry: Automotive - Retail and Whole Sales (top 3%)
Topped the Zacks Consensus Estimate by 1.5% last quarter.
Earnings are expected to grow 31.8% this year and 14.8% in the next year on revenue growth of -1.8% and 24.6%, respectively.
Long term earnings growth estimate is 18.5%
PEG 0.61
KnightSwift Transportation Holdings Inc. (KNX - Free Report)
Knight-Swift Transportation, the result of a merger between Knight Transportation, Inc. and Swift Transportation Company, is the largest truckload carrier in North America with an active M&A policy for growth. It serves customers throughout North America, providing them with numerous efficient and low-cost truckload transportation, intermodal and logistics services.
Its three operating segments are Trucking (82% revenue share), Intermodal (9%) and Logistics (7%).
By 2035, Knight-Swift intends to reduce carbon emissions generated by its fleet by 50%.
Zacks Rank #2
Value Score A, Growth Score B, Momentum Score C, VGM Score A
Industry: Transportation - Truck (top 9%)
Topped the Zacks Consensus Estimate by 25.4% last quarter.
Earnings are expected to grow 24.9% this year and 23.1% in the next year on revenue growth of -3.6% and 8.8%, respectively.
Long term growth estimate is 15.0%
PEG 1.00
Tempur Sealy International, Inc. (TPX - Free Report)
Tempur Sealy develops, manufactures and markets bedding products primarily in North America but also internationally. It provides mattresses, adjustable bases, pillows and other sleep and relaxation products.
Zacks Rank #2
Value Score A, Growth Score A, Momentum Score A, VGM Score A
Industry: Retail - Home Furnishings (top 12%)
Topped the Zacks Consensus Estimate by 34.9% last quarter.
Earnings are expected to grow 72.0% this year and 13.4% in the next year on revenue that is expected to grow 16.1% and 8.2%, respectively.
Long term growth estimate is 23.4%
PEG 0.65
JELD-WEN Holding, Inc. (JELD - Free Report)
JELD-WEN Holding designs, produces and distributes interior and exterior doors, wood, vinyl and aluminum windows and related products for new construction and repair and remodeling of residential homes and non-residential buildings.
Zacks Rank #2
Value Score A, Growth Score A, Momentum Score A, VGM Score A
Industry: Building Products - Wood (top 13%)
Topped the Zacks Consensus Estimate by 20.9% last quarter.
Earnings are expected to grow 24.2% this year and 25.0% in the next year on revenue growth of -2.4% and 5.8%, respectively.
Long term growth estimate is 20.6%
PEG 0.75
Honda Motor Co., Ltd. (HMC - Free Report)
Honda Motor Co. is a leading manufacturer of automobiles and the largest producer of motorcycles in the world. The company is recognized internationally for its wide variety of products, ranging from small general-purpose engines to specialty sports cars, which incorporate its efficient internal combustion engine technology.
Automobiles (66.7% of revenue), Motorcycles (13.7%), Financial Services (17.4%) and Life Creation and Other segment (2.2%) are its four operating segments. Most of the automobile revenue is generated in the U.S. while most of the motorcycle revenue is generated in various Asian markets.
Zacks Rank #1
Value Score A, Growth Score B, Momentum Score D, VGM Score A
Industry: Automotive – Foreign (top 15%)
Topped the Zacks Consensus Estimate by 19.8% last quarter.
Earnings are expected to grow 3.8% this year and 41.7% in the next year on revenue growth of -11.6% and 8.3%, respectively.
Long term growth estimate is 19.2%
PEG 0.61
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>