3 Value Stocks Near 52-Week Highs
Usually, value stocks get overlooked by investors, especially when we’re dealing with a market that has soared over 40% in just three months. They’re much more interested in picking flashy names with the potential for big rewards, rather than fretting with entry prices and sustainability.
However, we’ve got a screen that can help you satisfy both ends of the equation. The Value Stocks at 52-Week High screen looks for Zacks Rank #1s (Strong Buys) or #2s (Buys) that are within 5% of their 52-week highs AND have a Zacks Value Style Score of “A”.
Below are three stocks that have passed the test, but there are 20 more in the screen right now. So after reading this article, make sure to click here for the full list.
Lowe’s Companies (LOW)
After three consecutive quarters with small earnings beats, Lowe’s Companies (LOW) suddenly topped expectations by 37.2% in its fiscal first quarter. So what could have happened?
Well, millions of people (who were fortunate enough to keep their jobs) swarmed into this home improvement giant in hopes of keeping their sanity during this shutdown by doing some work around the house. If you’re going to be stuck in one place for months on end, then it might as well be comfortable, visually appealing and not have that annoying drip-drip-drip from your bathroom faucet.
As a result, the building products – retail space is in the top 9% of the Zacks Industry Rank. And LOW’s shares have jumped approximately 111% from the coronavirus low on March 23.
The quarter included earnings per share of $1.77 that improved 45% year over year and topped the Zacks Consensus Estimate by the aforementioned 37%. Sales of $19.7 billion advanced 10.9% from last year and beat expectations of $18.3 billion.
Furthermore, same-store sales were up 11.2% and online sales increased 80% as LOW managed to get a piece of the “stay home” economy while remaining a brick-and-mortar powerhouse.
The company took several actions to adjust operations during the coronavirus, including withdrawing its fiscal 2020 guidance. Such a move is par for the course at a time of such uncertainty, but it hasn’t swayed analysts from raising their expectations.
The Zacks Consensus Estimate for this fiscal year (ending in January 2021) is $6.67, which is up 13.7% over the past 60 days. Next fiscal year doesn’t end until January 2022, but it has already advanced 7.1% in that time to $7.22.
Therefore, analysts currently expect earnings growth of 8.4% next year over this year, and there’s plenty of time for that to improve as we move forward.
Sportsman’s Warehouse (SPWH)
No matter how perfect you’ve prepared your place for the long haul of this pandemic, there comes a time when you just have to get out. And you need more than just a walk around the block or lunch at an outdoor patio. We’re talking about getting away for a while.
With public gatherings on hold for now, one of the best places to take a vacation is the great outdoors. But first you need to take a trip to Sportsman’s Warehouse (SPWH).
The company is an outdoor sporting goods retailer, which sells all the stuff you’ll need to go fishing, camping, hiking or hunting. These activities are so popular during the coronavirus that shares of SPWH have soared approximately 193% since March 23.
In its fiscal first quarter, the company earned a penny per share. That may not seem like a lot, but it’s a huge improvement over the six-cent loss that was expected and the 12-cent loss from the previous year. The earnings surprise came to more than 116%!
Revenue of $246.8 million jumped nearly 42% from last year and also topped the Zacks Consensus Estimate by almost 7%. Same-store sales were up 28.6% in the quarter year over year.
Unsurprisingly, SPWH doesn’t feel comfortable giving a forward guidance amid all the uncertainty right now, but analysts were still raising their estimates.
The Zacks Consensus Estimate for this fiscal year (ending January 2021) surged 28.6% over the past 60 days to 81 cents. Likewise, expectations for next fiscal year (ending January 2022) improved 21.4% in that time to 85 cents.
At the moment, analysts are only expecting a 5% improvement for next year over this one. However, this pandemic has opened new opportunities for a company like this one.
If you never went camping before because there was so much to do in town before the craziness started, then the experience can’t help but make new customers that will head back into the wilderness even when things return to normal.
Patterson Companies (PDCO)
What do your teeth and your pets have in common (other than yourself of course)? There’s a good chance they’re both served in some way by Patterson Companies (PDCO), which is split into two segments: Patterson Dental and Patterson Animal.
The dental side provides things like consumables, equipment, software and even stationary to dentists, while the animal part provides veterinary supplies to clinics and shelters. Shares of the company have improved more than 55% since March 23.
PDCO was impacted by the coronavirus like most other businesses, but it still managed a solid fiscal fourth quarter report. It earned 43 cents per share, which improved by 16.2% from the previous year and beat the Zacks Consensus Estimate by more than 150%. The company has outperformed expectations in six of the previous seven quarters, including the last four straight.
Net sales of $1.29 billion were down year over year, but still beat the Zacks Consensus Estimate by 1.9%.
To combat the virus, PDCO took several additional actions, such as aggressive cost savings measures, the suspension of all non-essential capital expenditures and other liquidity preservation measures.
Everything was moving along just fine for fiscal 2020 before the coronavirus hit, but PDCO still managed solid results. Adjusted EPS of $1.55 improved 10.7% from last year, while revenues of $5.49 billion were only down 1.5%. Both the top and bottom lines beat expectations, though earnings did so by 10.7% while revenue only surpassed by 0.4%.
Speaking of annual results, analysts are expecting good numbers this fiscal year and next. Expectations for the year ending April 2021 are up 21.6% in the past 30 days to $1.35, while the year ending April 2022 has advanced 5% in that time to $1.68.
Therefore, even though they’re dealing with results far into the future, analysts expect profit growth of more than 24% for next fiscal year over this one.
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Sportsmans Warehouse Holdings, Inc. (SPWH): Free Stock Analysis Report
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Lowes Companies, Inc. (LOW): Free Stock Analysis Report
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