The widespread bearish sentiment due to the skyrocketing inflation and the Fed’s interest rate hikes is causing the benchmark indices to plunge. However, financial experts believe investors with long time horizons should continue to invest in the market.
Fundamentally strong stocks with healthy financials and attractive valuations could be suitable investments for the future. Given the volatile backdrop, value stocks are gaining traction.
“We expect value stocks to outperform by as much as the historical equity risk premium over the next decade, mostly because of a decay in the overvaluation of growth stocks,” according to Vanguard’s 2022 market outlook.
So, we think bargain stocks Meta Platforms, Inc. (META), Micron Technology, Inc. (MU), and Incyte Corporation (INCY), which are currently trading near their 52-week lows, could be solid buy and hold options now.
Meta Platforms, Inc. (META)
META develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, wearables, and in-home devices worldwide. It operates in two segments- Family of Apps and Reality Labs.
On May 10, 2022, Liberty, a part of Algonquin Power & Utilities Corp. (AQN), announced its collaboration with META on the new 112 MW Deerfield II wind project in Michigan. The project is set to achieve commercial status by 2023 and is a step forward toward optimal utilization of renewable energy and sustainability.
META’s total revenue came in at $27.91 billion, up 6.6% year-over-year for the first quarter ended March 31, 2022. The company’s advertising revenue came in at $27 billion, up 6.1% year-over-year. Also, its net cash provided by operating activities came in at $14.08 billion, up 15% year-over-year.
The stock’s forward P/E of 13.81x is 23.9% lower than the industry average of 18.15x. Its forward EV/EBITDA of 7.23x is 12.8% lower than the industry average of 8.29x.
Analysts expect META’s revenue to increase 16.2% year-over-year to $146.70 billion in 2023. Its EPS is estimated to grow 18% year-over-year to $13.85 in 2023. It surpassed the EPS estimates in three of the trailing four quarters.
The stock has lost 54.8% over the past year and 52.2% year-to-date to close the last trading session at $160.68. It is currently trading 4.2% above its 52-week low of $154.25, which it hit on June 23, 2022.
META’s strong fundamentals are reflected in its POWR Ratings. The stock has an A grade for Quality and a B grade for Value. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
Within the Internet industry, it is ranked #7 out of 68 stocks. Click here for the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for META.
Micron Technology, Inc. (MU)
MU designs, manufactures, and sells memory and storage products worldwide. The company operates through four segments: Compute and Networking Business Unit; Mobile Business Unit; Storage Business Unit; and Embedded Business Unit.
On June 28, 2022, MU announced shipping the world’s first 176-layer NAND SATA SSD curated for data center workloads. This SSD is way more advanced than traditional hard disks and is a game-changing innovation in the computer storage industry.
In addition, on June 21, 2022, MU launched the world’s highest-capacity microSD card, the i400, at an incredible density of 1.5 terabytes.
Kris Baxter, corporate vice president and general manager of MU’s Embedded Business Unit, said, “Micron’s newest high-performance, ruggedized solutions — our i400 microSD card for video security and automotive ASIL-D-qualified LPDDR5 — will unlock new value for businesses and drive the rapid innovation needed at the intelligent edge.”
MU’s revenue came in at $7.79 billion for the fiscal 2022 second quarter ended March 3, 2022, up 24.9% year-over-year. Its non-GAAP net income came in at $2.44 billion, up 116.7% year-over-year. Also, its non-GAAP EPS came in at $2.14, up 118.4% year-over-year.
MU’s forward EV/S of 1.84x is 33.5% lower than the industry average of 2.77x. Its forward EV/EBITDA of 3.28x is 72.7% lower than the industry average of 12.03x.
Analysts expect MU’s revenue to be $33.28 billion in fiscal 2022, representing a 20.1% year-over-year rise. The company’s EPS is expected to increase 54.6% year-over-year to $9.37 in 2022. It surpassed Street EPS estimates in each of the trailing four quarters.
The stock has lost 30.6% over the past year and 37.9% year-to-date to close the last trading session at $57.86. It is currently trading 7.9% above its 52-week low of $53.60, which it hit on June 17, 2022.
MU's overall B rating equates to a Buy in our POWR Ratings system. Also, the stock has an A grade for Value and a B grade for Growth and Quality.
Within the B-rated Semiconductor & Wireless Chip industry, it is ranked #18 out of 97 stocks. Click here for the additional POWR Ratings for Momentum, Stability, and Sentiment for MU.
Incyte Corporation (INCY)
Biopharmaceutical company INCY focuses on discovering, developing, and commercializing proprietary therapeutics in the United States and internationally. Its product portfolio includes JAKAFI; PEMAZYRE; and ICLUSIG.
On June 13, 2022, The U.S. Food and Drug Administration approved INCY and Eli Lilly and Company’s (LLY) OLUMIANT (baricitinib) pill, a first-in-disease systemic treatment for adults with severe alopecia areata. This breakthrough pill has shown tremendous promise in clinical trials and is a landmark achievement for medical science.
For the first quarter ended March 31, 2022, INCY’s revenues came in at $733.24 million, representing a 21.3% year-over-year rise. Also, the company’s net product revenues came in at $605.82 million, up 20% year-over-year. Its income from operations came in at $116.54 million, up 18% year-over-year.
INCY’s trailing-twelve-month P/E of 18.03x is 30.8% lower than the industry average of 26.04x.
Analysts expect INCY’s revenue to increase 15.4% year-over-year to $3.89 billion in 2023. Its EPS is expected to increase 41.7% from the year-ago value to $4.55 in 2023.
The stock has lost 11.7% over the past year and gained 3% year-to-date to close the last trading session at $75.63. It is currently trading 22.2% above its 52-week low of $61.91, which it hit on November 2, 2021.
It’s no surprise that INCY has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has a B grade for Value and Quality.
INCY is ranked #15 out of 398 stocks in the Biotech industry. Click here for the additional POWR Ratings for INCY (Growth, Momentum, Stability, and Sentiment).
META shares were trading at $162.93 per share on Wednesday afternoon, up $2.25 (+1.40%). Year-to-date, META has declined -51.56%, versus a -19.55% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
The post 3 Bargain Stocks Near 52-Week Lows to Buy and Forget appeared first on StockNews.com