3 Bargain Stocks to Beat the Market
The Value Line Investment Survey sees a strong year ahead for these picks.
With the help of the Value Line Investment Survey, we’ve identified three bargains with timeliness ratings of 1, meaning that Value Line believes they are primed to outpace the market over the next year. (Prices are as of May 1.)
Biotech giant Gilead Sciences (symbol GILD, $105) trades for just 10 times projected earnings, about 45% less than the price-earnings ratio of the overall market and 60% less than the P/E of Gilead’s biggest rivals. Wall Street is down on Gilead because it has been cutting the price of its blockbuster hepatitis C drugs, Sovaldi and Harvoni, and signing profit-sharing deals with generic-drug companies. The moves will pare Gilead’s profit margins, but they make the drugs more attractive to the insurers and government agencies that pay the tab. Gilead just began paying a dividend.
Shares of semiconductor maker Micron Technology (MU, $29) have sunk by more than 17% since December because of slumping personal computer sales. But Micron has new contracts with suppliers and partners that will pare expenses and possibly boost sales in 2016, says Value Line. The stock sells for only 9 times estimated 2015 profits. Value Line sees earnings surging this year and in 2016.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Shares of Chicago Bridge & Iron (CBI, $50), which builds infrastructure for energy companies, have tumbled 37% since April 2014, a victim of the drop in oil prices. The Netherlands-based company recently trimmed its outlook for 2015, but it has plenty of projects in its backlog and expects earnings to rise this year. CBI is flush with cash, which it plans to use to repurchase as much as 10% of its shares. The stock sells for 9 times estimated profits, giving it above-average long-term potential, says Value Line.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
Stock Market Today: S&P 500 Nears 6K in Best Week of 2024
Optimism around Donald Trump's election win, the Fed rate cut and consumer sentiment sent markets to new highs Friday.
By Karee Venema Published
-
Upstart Stock Sails Higher as Lending Boom Boosts Q3 Results
Upstart stock is scaling the charts Friday after the AI lending platform beat Q3 expectations on strong loan growth. Here's what you need to know.
By Joey Solitro Published
-
If You'd Put $1,000 Into Google Stock 20 Years Ago, Here's What You'd Have Today
Google parent Alphabet has been a market-beating machine for ages.
By Dan Burrows Published
-
Stock Market Today: Stocks Retreat Ahead of Nvidia Earnings
Markets lost ground on light volume Wednesday as traders keyed on AI bellwether Nvidia earnings after the close.
By Dan Burrows Published
-
Stock Market Today: Stocks Edge Higher With Nvidia Earnings in Focus
Nvidia stock gained ground ahead of tomorrow's after-the-close earnings event, while Super Micro Computer got hit by a short seller report.
By Karee Venema Published
-
Stock Market Today: Dow Hits New Record Closing High
The Nasdaq Composite and S&P 500 finished in the red as semiconductor stocks struggled.
By Karee Venema Published
-
Stock Market Today: Stocks Pop After Powell's Jackson Hole Speech
Fed Chair Powell's Jackson Hole speech struck a dovish tone which sent stocks soaring Friday.
By Karee Venema Published
-
Stock Market Today: Stocks Drop Ahead of Powell's Jackson Hole Speech
Sentiment turned cautious ahead of Fed Chair Powell's highly anticipated speech Friday at the Jackson Hole Economic Symposium.
By Karee Venema Published
-
Stock Market Today: Stocks Rise After Jobs Data Lifts Rate-Cut Odds
Preliminary data from the Bureau of Labor Statistics shows job growth was lower than previously estimated.
By Karee Venema Published
-
Stock Market Today: Stocks Snap Lengthy Win Streak
The recent stock market rally ran out of steam Tuesday as sentiment turns cautious ahead of Jackson Hole.
By Karee Venema Published