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Here's Why You Can't Resist These 3 Absurdly Cheap Stocks
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The ongoing inflationary situation, marking the United States’ largest increase in consumer prices in 40 years and the highest-ever Euro inflation in history, was initially termed as a short-lived one by many market watchers. However, the Russia-Ukraine war update so far is indicative of a further rise in commodity prices worldwide with an enduring impact. Meanwhile, with the Fed’s aggressive rate hikes in the cards, the prevailing bearish trend of equity market investment might face another downturn.
Equity Market Scenario Thus Far
Post-COVID, despite the reopening of the economy, the vicious cycle of deteriorating inflationary situation along with aggressive rate hikes has put the global equity investment scenario in a tighter spot again. Going by the industry-wide trend so far, logistical challenges and increasing unit costs are heavily weighing on the corporate profitability of the stocks across the board. On the other hand, the tightened monetary policy is starkly altering consumer preferences and once again, demand for the non-essential category line of businesses is on the back foot.
There has been a widely-divergent impact across sectors in terms of stock movement. Going by Silicon Valley Bank data, technology stocks that rely heavily on funding are among the hardest hit due to their exposure to interest rate fluctuation. On the other hand, the Utilities Select Sector index that consists of U.S.-based communication services, electrical power providers and natural gas distributor stocks, which are less reliant on funding, have returned nearly 4% over the past 12 months.
Investment Strategy As We Enter 2023
Against the current backdrop of market meltdowns, all the major market indices are in bear territory. Stocks, once with high valuation multiples. are either at their lowest or still in free-fall mode. These beaten-down stocks are currently available at absurdly-cheap prices.
It has been observed that growth stocks outshine value stocks during economic downturns. However, when the economy picks up pace, value stocks are expected to outperform the market.
To narrow down the list, we have selected stocks with a Value Style Score of A or B. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best upside potential. You can see the complete list of today’s Zacks #1 Rank stocks here.
Listed below are three companies that investors can consider during these trying times.
Perion Network Ltd. (PERI - Free Report) : Perion is a global advertising technology company with synergistic solutions that are delivered across the three primary channels of digital advertising — ad search, social media and display/video/CTV advertising. These channels are brought together by Perion’s intelligent Hub, which integrates the company’s business assets from both sides of the open web, providing significant benefits to its brands and publisher customers.
PERI stock is currently trading at $26.21. With its discounted valuation metrics compared to its peer group and the broader industry, the stock is an extremely good value investment pick at present. Perion currently carries a Zacks Rank #1 with a Value Score of B. In 2023, the company’s earnings and sales are expected to grow 5.5% and 15.3%, respectively.
Arhaus, Inc. (ARHS - Free Report) : Arhaus is a rapidly growing lifestyle brand and omni-channel retailer of premium home furnishings. Through a differentiated proprietary model that directly designs and sources products from leading manufacturers and artisans around the world, Arhaus offers an exclusive assortment of heirloom quality products.
The ARHS stock, which is currently trading at $9.61, has plunged 27.5% year to date. Arhaus currently carries a Zacks Rank #2 with a Value Score of A. In 2023, Arhaus’ earnings and sales are expected to grow 2.3% and 13.4%, respectively.
Pampa Energia S.A. (PAM - Free Report) : Pampa Energia is an integrated power company, engaged in the generation and transmission of electricity in Argentina. It operates through Electricity Generation, Oil and Gas, Petrochemicals, and Holding and Other Business segments. Pampa Energia generates electricity through combined thermal generation plants, open-cycle gas turbines, and hydroelectric power generation systems, as well as through a wind farm.
The PAM stock is currently trading at $27.04. Pampa Energia currently carries a Zacks Rank #2 and has a Value Score of A. In 2023, Pampa Energia’s earnings are expected to grow 8.1% year over year.
Image: Bigstock
Here's Why You Can't Resist These 3 Absurdly Cheap Stocks
The ongoing inflationary situation, marking the United States’ largest increase in consumer prices in 40 years and the highest-ever Euro inflation in history, was initially termed as a short-lived one by many market watchers. However, the Russia-Ukraine war update so far is indicative of a further rise in commodity prices worldwide with an enduring impact. Meanwhile, with the Fed’s aggressive rate hikes in the cards, the prevailing bearish trend of equity market investment might face another downturn.
Equity Market Scenario Thus Far
Post-COVID, despite the reopening of the economy, the vicious cycle of deteriorating inflationary situation along with aggressive rate hikes has put the global equity investment scenario in a tighter spot again. Going by the industry-wide trend so far, logistical challenges and increasing unit costs are heavily weighing on the corporate profitability of the stocks across the board. On the other hand, the tightened monetary policy is starkly altering consumer preferences and once again, demand for the non-essential category line of businesses is on the back foot.
There has been a widely-divergent impact across sectors in terms of stock movement. Going by Silicon Valley Bank data, technology stocks that rely heavily on funding are among the hardest hit due to their exposure to interest rate fluctuation. On the other hand, the Utilities Select Sector index that consists of U.S.-based communication services, electrical power providers and natural gas distributor stocks, which are less reliant on funding, have returned nearly 4% over the past 12 months.
Investment Strategy As We Enter 2023
Against the current backdrop of market meltdowns, all the major market indices are in bear territory. Stocks, once with high valuation multiples. are either at their lowest or still in free-fall mode. These beaten-down stocks are currently available at absurdly-cheap prices.
It has been observed that growth stocks outshine value stocks during economic downturns. However, when the economy picks up pace, value stocks are expected to outperform the market.
To narrow down the list, we have selected stocks with a Value Style Score of A or B. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best upside potential. You can see the complete list of today’s Zacks #1 Rank stocks here.
Listed below are three companies that investors can consider during these trying times.
Perion Network Ltd. (PERI - Free Report) : Perion is a global advertising technology company with synergistic solutions that are delivered across the three primary channels of digital advertising — ad search, social media and display/video/CTV advertising. These channels are brought together by Perion’s intelligent Hub, which integrates the company’s business assets from both sides of the open web, providing significant benefits to its brands and publisher customers.
PERI stock is currently trading at $26.21. With its discounted valuation metrics compared to its peer group and the broader industry, the stock is an extremely good value investment pick at present. Perion currently carries a Zacks Rank #1 with a Value Score of B. In 2023, the company’s earnings and sales are expected to grow 5.5% and 15.3%, respectively.
Perion Network Ltd PE Ratio (TTM)
Perion Network Ltd pe-ratio-ttm | Perion Network Ltd Quote
Arhaus, Inc. (ARHS - Free Report) : Arhaus is a rapidly growing lifestyle brand and omni-channel retailer of premium home furnishings. Through a differentiated proprietary model that directly designs and sources products from leading manufacturers and artisans around the world, Arhaus offers an exclusive assortment of heirloom quality products.
The ARHS stock, which is currently trading at $9.61, has plunged 27.5% year to date. Arhaus currently carries a Zacks Rank #2 with a Value Score of A. In 2023, Arhaus’ earnings and sales are expected to grow 2.3% and 13.4%, respectively.
Arhaus, Inc. PE Ratio (TTM)
Arhaus, Inc. pe-ratio-ttm | Arhaus, Inc. Quote
Pampa Energia S.A. (PAM - Free Report) : Pampa Energia is an integrated power company, engaged in the generation and transmission of electricity in Argentina. It operates through Electricity Generation, Oil and Gas, Petrochemicals, and Holding and Other Business segments. Pampa Energia generates electricity through combined thermal generation plants, open-cycle gas turbines, and hydroelectric power generation systems, as well as through a wind farm.
The PAM stock is currently trading at $27.04. Pampa Energia currently carries a Zacks Rank #2 and has a Value Score of A. In 2023, Pampa Energia’s earnings are expected to grow 8.1% year over year.
Pampa Energia S.A. PE Ratio (TTM)
Pampa Energia S.A. pe-ratio-ttm | Pampa Energia S.A. Quote