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The Zacks Analyst Blog Highlights: Korea Electric Power, Northern Tier Energy, Semiconductor Manufacturing International, Energy Recovery and NV5 Holdings

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Chicago, IL - November 18, 2015 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Korea Electric Power Corp. ( KEP ), Northern Tier Energy LP ( NTI ), Semiconductor Manufacturing International Corp. ( SMI ), Energy Recovery, Inc. ( ERII ) and NV5 Holdings, Inc. ( NVEE ).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Tuesday's Analyst Blog:

5 Must-Have Cheap Stocks with Incredible Momentum

Nothing comes easy in life, especially promising investment deals. Like all good things (well, mostly!), finding that perfect investment opportunity to enrich our portfolio needs to be worked upon.

A quick way to find good deals is to check for momentum stocks. With the currently volatile stock market - where a single piece of news can shoot a stock's price sky high or squash months of gains in a single day - value, growth or income investments might just fall short of making sustained profits for your portfolio.

However, it is useless to dive into the water when the ship has already sailed midway to the ocean. There are stocks that show great momentum but all the positives for it may already have been factored in its price, leaving little upside potential.

Also, prices of stocks that have come under the radar of important investors tend to shoot up very fast. This makes it difficult for the ordinary investor to get hold of these stocks while they are still cheap.

So, how to determine whether a stock is overvalued or undervalued? Whether the run was just a sprint or it is part of a bigger marathon? Simple, check the correct multiples.

Working with the PEG Ratio

The first thing that pops into mind when you think of determining whether a stock is overvalued or not is its price-to-earnings (P/E) multiple. The P/E ratio of the stock when compared with the overall P/E of the market or of the peer group gives a fair idea on whether the stock is relatively more expensive or not.

However, the P/E ratio gives only a snapshot of the current movement of the stocks under consideration. It does not take into account the earnings growth potential of the stock - an immensely important measure in determining the quality of investment.

This brings us to the P/E-to-Growth (PEG) ratio. While a favorable P/E ratio may make the stock look like a good buy, factoring in the company's growth rate may lead to an entirely different story. The lower the PEG ratio, the more the stock may be undervalued given its earnings performance.

Screening the Zacks Way

The investment universe, at any point of time, has a lot to offer and it can be quite overwhelming to find promising stocks. A great way to look for momentum stocks is by inspecting short-term price activity as this reflects the current interest in a stock. Also, any stock can see a spike in price but only a real winner can consistently outperform the market.

As such, long-term price changes must be considered as well. Brokerage firms that are bullish on a stock also add value to it. However, it is difficult to consolidate all these data for each stock to find a potential winner. This is where the new Zacks style score system comes into play.

A Momentum Style Score includes all the aforesaid parameters and based on the fulfillment of each, assigns an overall score. Stocks with a momentum score of 'A' are the best of the lot. Add to this a favorable Zacks Rank of #1 (Strong Buy) or 2 (Buy) and we get companies that are not only high-fliers but also boast strong fundamentals that back their price surge.

However, as discussed earlier, it is important to check whether these stocks are unnecessarily taxing your pockets. Therefore, we can complete our filter process by adding a PEG ratio of less than one. This would give us undervalued stocks with much better scope.

5 Cheap Momentum Stocks That Need Your Attention Now

Korea Electric Power Corp. ( KEP ) is an integrated electric utility engaged in the generation, transmission and distribution of electricity as well as development of electric power resources in South Korea. The company's systematic investments in power generation and infrastructure development projects will enable it to provide reliable services and meet increasing customer demand.

Zacks Rank #1

PEG Ratio: 0.11 (compared with the industry average of 2.13)

Price Change (YTD): 11%

Headquartered in Tempe, AZ, Northern Tier Energy LP ( NTI ) is an independent downstream energy firm. The partnership is engaged in refining, retail, and pipeline operations in the United States. Because of its downstream business, the firm is likely to benefit from the current commodity price environment.

Zacks Rank #1

PEG Ratio: 0.61 (compared with the industry average of 4.11)

Price Change (YTD): 19%

Semiconductor Manufacturing International Corp. ( SMI ), based in Shanghai, is an investment holding company. The firm is a manufacturer of integrated circuits and provider of other semiconductor services.

Zacks Rank #1

PEG Ratio: 0.65 (compared with the industry average of 0.88)

Price Change (YTD): 21%

San Leandro, CA-based Energy Recovery, Inc. ( ERII ) is a firm from the pollution control industry. The company manufactures devices that transform untapped energy into reusable energy from industrial fluid flows and pressure cycles.

Zacks Rank #2

PEG Ratio: 0.83 (compared with the industry average of 0.92)

Price Change (YTD): 42%

NV5 Holdings, Inc. ( NVEE ) is a professional and technical engineering, and consulting solutions provider, based in Hollywood, FL. The company provides infrastructure, engineering, and support services along with construction quality assurance services. The company also offers program management services like governmental outsourcing and consulting services as well as technical outsourcing services.

Zacks Rank #2

PEG Ratio: 0.89 (compared with the industry average of 1.37)

Price Change (YTD): 50%

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

KOREA ELEC PWR (KEP): Free Stock Analysis Report

NORTHERN TIER (NTI): Free Stock Analysis Report

SEMICON MFG-ADR (SMI): Free Stock Analysis Report

ENERGY RECOVERY (ERII): Free Stock Analysis Report

NV5 HOLDING INC (NVEE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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