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Mr. Market has been moody of late, going up one day, down a few days and sideways in between. So overall, the climate remains uncertain despite a strong earnings season (by any measure), vaccinations remaining in full swing and prospects for very strong growth through the rest of the year.
So what can we possibly do when there’s really little to complain about -- except the bitcoin thing, the chip shortage, the chances of interest rates picking up sooner rather than later and elevated valuations that are partly attributable to all the money that has been pumped into the economy.
Some folks might be put off altogether. After all, waiting is always an option, and might be a better one than making mistakes. But rest assured that almost any market is a good one to invest in. It rather depends on your personal goals and risk appetite. Or, if you’ve dug around enough, you could still find cheap stocks with attractive prospects.
The list I’ve put together today comprises relatively safe bets. These stocks have a low valuation, meaning that their sales and earnings potential exceeds the price you must pay for them.
Plus, they belong to an elite group that have Zacks #1 (Strong Buy) ranks, attractive value-growth-momentum (VGM) profiles and a positive estimate revision trend. The fact that they also belong to attractive industries is a bonus because this means that industry-specific factors are also supportive.
Santa Monica, California-based A-Mark is a full-service precious metals trading company offering gold, silver, platinum and palladium in the form of coins, bars, wafers and grain. Its services include financing, leasing, consignment, hedging and customized financial programs. Its clients include coin and metal dealers, investors, collectors, mines, manufacturers, refiners, jewelers, investment advisors, merchants, commodity brokerage houses and central banks.
The shares carry a Zacks Rank #1 and VGM Score B. They belong to the Precious Metals and Jewels industry, which is in the top 1% of Zacks-classified industries. A buy-ranked stock in the top 50% of such industries usually outperforms a similar stock in a bottom-50% industry.
The company has reported strong results of late. After topping March quarter estimates by 199.7%, analysts raised their estimates for fiscal 2021 and 2022 (ending June) by a respective 159.1% and 101.7%, all in the last four weeks.
The shares also look cheap going by their P/E of 3.49X (16X is about average in the Zacks universe) and P/S 0.05X (a fair valuation is 1).
Buford, Georgia-based OneWater Marine is a premium recreational boat retailer, operating principally in the U.S. It offers new and pre-owned boats, parts and accessories, finance and insurance products, maintenance and repair services and ancillary services.
ONEW shares carry a Zacks Rank #1 and VGM Score A. They belong to the Leisure and Recreation Products industry, which is in the top 15% of Zacks-classified industries.
In the last quarter it topped estimates by a whopping 157.8%, after which analysts raised their estimates for fiscal 2021 and 2022 by 31.0% and 25.6%, respectively.
Valuation is also cheap at just 8.89X earnings and 0.61X sales.
Greenwood Village, Colorado-based Century Communities is a home building and construction company engaged in land acquisition, development, and entitlements; and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects. It targets major metropolitan markets in Colorado, Texas and Nevada.
With a Zacks Rank #1, VGM Score B and belonging to the Building Products - Home Builders industry (top 16%), Century Communities is doing extremely well of late.
The company reported an EPS surprise of 97.4% in the last quarter and its 2021 and 2022 estimates have moved up a respective 40.9% and 37.8% in the last four weeks.
At 6.32X earnings and 0.70X sales, the valuation is also attractive.
Columbus, Ohio-based M/I Homes designs, constructs and sells single-family homes and attached townhomes to first-time, moveup, empty-nester and luxury buyers in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Tampa, Orlando and Palm Beach County, Florida; Charlotte and Raleigh, North Carolina; Virginia and Maryland.
Another member of the Building Products - Home Builders industry, MHO shares carry a Zacks Rank #1 and VGM Score C.
The company exceeded March quarter estimates by 119.2% and the strong results had analysts raising their 2021 and 2022 estimates by a respective 42.4% and 42.9% in the last four weeks.
The valuation of 6.44X earnings and 0.60X sales is attractive.
Veritiv Corp.
Atlanta, Georgia-based Veritiv offers North American business-to-business distribution products and services spanning packaging, print and print management, publishing, supply chain, facility and logistics covering the entire lifecycle of core business operations. Its customers are in the manufacturing, healthcare, retail and other industries.
This Zacks Rank #1 stock has a VGM Score A and belongs in the Paper and Related Products industry (top 29%).
Its reported earnings of $1.28 was 6,300.0% above the estimated 2 cents. The strong showing had analysts raising their 2021 estimates by 66.7% and 2022 estimates by 27.7%.
At P/E of 10.50X and P/S of 0.12X, valuation remains cheap.
London-based CNH Industrial was formed through the merging of Fiat Industrial S.p.A. (“Fiat Industrial”) and CNH Global N.V. (“CNH Global”). The company offers a range of agricultural, construction and industrial vehicles, as well as equipment under 12 brands.
This Zacks Rank #1 stock has a VGM Score A. It belongs in the Automotive – Foreign industry, which is in the top 42% of Zacks-classified industries.
Its last-reported EPS surprised the Zacks Consensus Estimate by 113.3%, driving analysts to raise their estimates for 2021 and 2022 by 33.6% and 28.2%, respectively.
Valuation is also reasonable at 15.35X earnings and 0.82X sales.
Berwyn, Pennsylvania-based Trinseo is a global manufacturer of plastics, latex and rubber used in home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires.
TSE shares carry a Zacks Rank #1 and VGM Score A. They belong to the Chemical - Plastic industry, which is currently in the top 50% of Zacks-classified industries.
The company’s March quarter earnings topped estimates by 35.1%, after which full year estimates were raised by 49.5%. 2022 estimates also rose 25.9% in the last four weeks.
At a P/E of 7.65X and P/S 0.79X, the shares are cheap.
Year-to-Date Price Movement
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Image: Bigstock
7 Cheap Stocks with Positive Outlooks
Mr. Market has been moody of late, going up one day, down a few days and sideways in between. So overall, the climate remains uncertain despite a strong earnings season (by any measure), vaccinations remaining in full swing and prospects for very strong growth through the rest of the year.
So what can we possibly do when there’s really little to complain about -- except the bitcoin thing, the chip shortage, the chances of interest rates picking up sooner rather than later and elevated valuations that are partly attributable to all the money that has been pumped into the economy.
Some folks might be put off altogether. After all, waiting is always an option, and might be a better one than making mistakes. But rest assured that almost any market is a good one to invest in. It rather depends on your personal goals and risk appetite. Or, if you’ve dug around enough, you could still find cheap stocks with attractive prospects.
The list I’ve put together today comprises relatively safe bets. These stocks have a low valuation, meaning that their sales and earnings potential exceeds the price you must pay for them.
Plus, they belong to an elite group that have Zacks #1 (Strong Buy) ranks, attractive value-growth-momentum (VGM) profiles and a positive estimate revision trend. The fact that they also belong to attractive industries is a bonus because this means that industry-specific factors are also supportive.
So let’s take a look-
AMark Precious Metals, Inc. (AMRK - Free Report)
Santa Monica, California-based A-Mark is a full-service precious metals trading company offering gold, silver, platinum and palladium in the form of coins, bars, wafers and grain. Its services include financing, leasing, consignment, hedging and customized financial programs. Its clients include coin and metal dealers, investors, collectors, mines, manufacturers, refiners, jewelers, investment advisors, merchants, commodity brokerage houses and central banks.
The shares carry a Zacks Rank #1 and VGM Score B. They belong to the Precious Metals and Jewels industry, which is in the top 1% of Zacks-classified industries. A buy-ranked stock in the top 50% of such industries usually outperforms a similar stock in a bottom-50% industry.
The company has reported strong results of late. After topping March quarter estimates by 199.7%, analysts raised their estimates for fiscal 2021 and 2022 (ending June) by a respective 159.1% and 101.7%, all in the last four weeks.
The shares also look cheap going by their P/E of 3.49X (16X is about average in the Zacks universe) and P/S 0.05X (a fair valuation is 1).
OneWater Marine Inc. (ONEW - Free Report)
Buford, Georgia-based OneWater Marine is a premium recreational boat retailer, operating principally in the U.S. It offers new and pre-owned boats, parts and accessories, finance and insurance products, maintenance and repair services and ancillary services.
ONEW shares carry a Zacks Rank #1 and VGM Score A. They belong to the Leisure and Recreation Products industry, which is in the top 15% of Zacks-classified industries.
In the last quarter it topped estimates by a whopping 157.8%, after which analysts raised their estimates for fiscal 2021 and 2022 by 31.0% and 25.6%, respectively.
Valuation is also cheap at just 8.89X earnings and 0.61X sales.
Century Communities, Inc. (CCS - Free Report)
Greenwood Village, Colorado-based Century Communities is a home building and construction company engaged in land acquisition, development, and entitlements; and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects. It targets major metropolitan markets in Colorado, Texas and Nevada.
With a Zacks Rank #1, VGM Score B and belonging to the Building Products - Home Builders industry (top 16%), Century Communities is doing extremely well of late.
The company reported an EPS surprise of 97.4% in the last quarter and its 2021 and 2022 estimates have moved up a respective 40.9% and 37.8% in the last four weeks.
At 6.32X earnings and 0.70X sales, the valuation is also attractive.
M/I Homes, Inc. (MHO - Free Report)
Columbus, Ohio-based M/I Homes designs, constructs and sells single-family homes and attached townhomes to first-time, moveup, empty-nester and luxury buyers in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Tampa, Orlando and Palm Beach County, Florida; Charlotte and Raleigh, North Carolina; Virginia and Maryland.
Another member of the Building Products - Home Builders industry, MHO shares carry a Zacks Rank #1 and VGM Score C.
The company exceeded March quarter estimates by 119.2% and the strong results had analysts raising their 2021 and 2022 estimates by a respective 42.4% and 42.9% in the last four weeks.
The valuation of 6.44X earnings and 0.60X sales is attractive.
Veritiv Corp.
Atlanta, Georgia-based Veritiv offers North American business-to-business distribution products and services spanning packaging, print and print management, publishing, supply chain, facility and logistics covering the entire lifecycle of core business operations. Its customers are in the manufacturing, healthcare, retail and other industries.
This Zacks Rank #1 stock has a VGM Score A and belongs in the Paper and Related Products industry (top 29%).
Its reported earnings of $1.28 was 6,300.0% above the estimated 2 cents. The strong showing had analysts raising their 2021 estimates by 66.7% and 2022 estimates by 27.7%.
At P/E of 10.50X and P/S of 0.12X, valuation remains cheap.
CNH Industrial N.V. (CNHI - Free Report)
London-based CNH Industrial was formed through the merging of Fiat Industrial S.p.A. (“Fiat Industrial”) and CNH Global N.V. (“CNH Global”). The company offers a range of agricultural, construction and industrial vehicles, as well as equipment under 12 brands.
This Zacks Rank #1 stock has a VGM Score A. It belongs in the Automotive – Foreign industry, which is in the top 42% of Zacks-classified industries.
Its last-reported EPS surprised the Zacks Consensus Estimate by 113.3%, driving analysts to raise their estimates for 2021 and 2022 by 33.6% and 28.2%, respectively.
Valuation is also reasonable at 15.35X earnings and 0.82X sales.
Trinseo S.A. (TSE - Free Report)
Berwyn, Pennsylvania-based Trinseo is a global manufacturer of plastics, latex and rubber used in home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires.
TSE shares carry a Zacks Rank #1 and VGM Score A. They belong to the Chemical - Plastic industry, which is currently in the top 50% of Zacks-classified industries.
The company’s March quarter earnings topped estimates by 35.1%, after which full year estimates were raised by 49.5%. 2022 estimates also rose 25.9% in the last four weeks.
At a P/E of 7.65X and P/S 0.79X, the shares are cheap.
Year-to-Date Price Movement
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>