This doesn’t seem like a time for value because... well, it’s not a time for value. Stocks are right around their highs and likely to move further after the stimulus money takes hold and vaccine rollout continues.Enter your text here...
However, if you don’t mind a little growth getting mixed in with the value, then Zacks’ proven metrics can help you find stocks that are going to really capitalize on this rebound. And you can get them at a great price too.
Our Highly-Ranked Undervalued Stocks screen will pick out some of those names. This tool seeks Zacks Rank #1 or Zacks Rank #2 stocks with Zacks Value Scores of A or B. It also wants stocks in the top 50% of the Zacks Industry Rank.
Below are three names that recently passed the test. Make sure to click above to see all the stocks that made the list today.
When you’re working at home in your pajamas because this pandemic closed everything down, then you probably don’t need a pile of steel at the moment. But thankfully we’re at the tail end of this unprecedented disruption and looking forward to get back to normal soon, which explains why Steel Dynamics is enjoying pent-up demand for the commodity that shares its name.
STLD is a leading steel producer and metal recycler. It’s one of the most diversified steel companies around, which it enhances through acquisitions (e.g. Heartland & United Steel Supply) and investments (e.g. new plant in Sinton, Texas). It’s three segments are Steel Operations (74% of 2020 revenues); Metals Recycling Operations (11%); and Steel Fabrication Operations (9%).
The steel producers space is in the Top 2% of the Zacks Industry Rank, as demand is expected to increase with the economy getting back to work. Shares of STLD are up more than 13% so far this year and about 170% over the past 12 months.
The company reported fourth-quarter earnings per share of 97 cents, which eclipsed the Zacks Consensus Estimate by nearly 13%. The beat marked its fifth straight, amassing an average surprise of more than 9.5% over the last four quarters.
Net sales of $2.6 billion improved 10% year over year and topped the Zacks Consensus Estimate by 4%. Domestic steel production continued to rise through the quarter with the automotive sector seeing the strongest recovery, while the construction sector is also hanging in there.
Looking forward, STLD expects sustained customer demand and pricing strength in 2021. So it’s not a surprise that the Zacks Consensus Estimate for this year has soared more than 57% over the past month to $6.25. Expectations for 2022 are currently only $3.08, but that has gained more than 17% in the same amount of time and should continue to improve in a more cooperative environment.
This pandemic has really reinforced the importance of the home, which explains why the building products – home builders space is in the top 13% of the Zacks Industry Rank.
If you’re finally ready to buy a house... and you can afford it... then you might want to check out the country’s leading luxury homebuilder Toll Brothers. Because an open floor
plan and a bedroom for each of the kids is so much better when it also comes with a waterfall out by the pool, a screening room with a lavish sports bar and closets with enough space to park a car or two.
Shares of TOL have surged more than 250% over the past 12 months, as people take advantage of historically low interest rates to either upgrade their current residence or buy their first one. A whole new generation of people are coming of age and starting families.
According to TOL, the strong housing market is being driven by a tight supply of homes for sale, favorable demographic trends, low mortgage rates and more appreciation for home ownership.
Such factors led to a strong fiscal first quarter performance, which included earnings per share of 76 cents crushing the Zacks Consensus Estimate by more than 55%. TOL has beaten expectations in each of the last four quarters with an average surprise of 33.6%. Revenues of $1.56 billion surpassed our estimate by 18%.
Both the top and bottom lines also improved year over year by 17.4% and 85.4%, respectively.
Looking forward, TOL now expects deliveries of between 10,000 and 10,400 in fiscal 2021, which is up from earlier expectations of 9,600 to 10,200. The company also raised its quarterly dividend payout by 54% recently.
Earnings estimates have really taken off in the past month. The Zacks Consensus Estimate for this fiscal year (ending October 2021) is up 8.3% in that time to $4.96. Expectations for next fiscal year (ending October 2022) surged 18.2% to $6.49. Therefore, analysts currently expect year-over-year profit growth of more than 30%.
Since the homebuilders are doing so well right about now, we might as well look at the construction materials space. Guess what... they’re doing pretty good too! The building materials – misc space is in the top 39% of the Zacks Industry Rank.
One of the big players in this space is Owens Corning, a world leader in building materials systems and compositive solutions. More specifically, it’s a market-leading innovator in glass fiber technology, which is used to support composite materials in all types of applications. It’s three reportable segments are roofing (38.2% of total 2020 sales); insulation (37%) and composites (27.8%).
Shares are up nearly 21% so far in 2021 and have soared almost 165% over the past year
OC enjoyed improved customer demand in most of its end markets during the fourth quarter, which explains why the company has been able to beat the Zacks Consensus Estimate for seven straight reports now.
Earnings per share of $1.90 topped our expectation by more than 36%, while also improving year over year by more than 68%. Over the past four quarters, the company has an impressive average earnings surprise of about 77%.
Net sales of $1.93 billion improved upon the Zacks Consensus Estimate by 6.6% and rose 14% from last year. Results were helped by higher demand for its products, along with a strong manufacturing performance and improved operating efficiencies.
Looking forward, OC expects strength in the U.S. housing market, as well as recovery of commercial and industrial markets. Analysts seem to agree as earnings estimates have moved solidly higher over the past 30 days.
The Zacks Consensus Estimate for this year is up 16.5% in that time to $6.55, while next year has advanced 11.7% to $7.16. Therefore, expectations currently call for year-over-year profit growth of 9.3%.