London, UK– Undervalue stock is a term used to describe stocks sold at a significantly lower price than what is presumed to be their intrinsic value. The intrinsic value is the current value of the free cash flow of a company predicted to be made by it. For instance, if a stock is sold for $20, but if it’s predicted worth based on future cash flows is $60, it becomes an undervalued stock.
The value of a stock can be determined by several factors like P/E (price/earnings ratio), price/cash flows, dividend yield, price/sales, and price/book. But the most common way to determine the value by traders is the price-to-earnings ratio (P/E).
P/E is the ratio between the company’s stock price and its earnings. An undervalued stock has a low PE ratio which boosts later on.
Following are the undervalued stocks that have growth potential:
- ACCO Brands Corp.
- Foot Locker Inc.
- China Petroleum & Chemical Corp.
- Honda Motor Company Ltd
- Beazer Homes USA Inc.
- Ternium S.A.
These stocks had very low P/E ratios in Q1 of 2022. However, David Frenkel, an expert from The Uptrend Center, explains that these companies with undervaluing stocks have stable earning history and currently have no financial scandals. These companies are under no debt and have potential growth. According to Frenkel, these stocks are a good investment opportunity because of their predicted growth based on companies’ presumed future profits and interest rates.
Top 5 undervalued stocks to buy in June 2022
1. ACCO Brands Corp. (AACO):
ACCO Brands Corporation is a manufacturing company that produces consumer, school, technology, and office products. ACCO Brands North America, ACCO Brands EMEA, and ACCO Brands International are the three segments the company operates through.
The primary products and services of the company include computer setup apparatus, calendars, planners, school notebooks, storage products, planners, sheet protectors, lamination, binding, writing pens, art supplies, punching, and stapling products.
ACCO Brands Corp. supplies its products under various brand names such as NOBO, PowerA, Rapid, Rexel, Derwent, Five Star, GBC, Tilibra, Spirax, and many more. The company markets its products via mass retailers, e-tailers, warehouse clubs, independent office product dealers, contract stationers, and an e-commerce platform.
ACCO Brand Corporation was established in 1893 and headquartered in Lake Zurich, Illinois. The shares of this company are listed on New York Stock Exchange (NYSE) under the ticker ACCO. Its current revenue is 2.06 Billion, with a market capitalization of $702.67 Million. The price-to-earnings ratio (P/E) is 5.81, and the Earning Per Share (EPS) is 1.23.
2. Foot Locker Inc. (FL):
Foot Locker, Inc. is an athletic footwear retailer. The company operates through its subsidiaries to market athletic sneakers, apparel, equipment, accessories, and team merchandise. Foot Locker, Inc. sells its products under brand names such as Kid Foot Locker, Lady Foot Locker, Sidestep Foot Locker, Champs Sports, Eastbay, and more.
It has retail stores in 28 countries in the world. The company sells products through e-commerce sites and mobile apps.
Foot Locker, Inc., established in 1879, has its headquarters in New York, New York. The company’s current market capitalization is $3.15 billion, with 8.98 billion in revenues. The shares of this company are listed on New York Stock Exchange (NYSE) under the ticker FL. The Earning Per Share (EPS) of the company is 7.98. The current price-to-earnings ratio (P/E) is 4.08, and the dividend yield is 1.60 (4.91%).
3. China Petroleum & Chemical Corp. (SNP):
China Petroleum & Chemical Corp. is a subsidiary company of China Petrochemical Corporation. It is an energy and chemical company focusing on oil, gas, and chemical production and marketing in China and worldwide. The company’s main objective is the exploration and development of oil fields. It also operates for the exploration, production, and marketing of natural gas, chemical fertilizers, and petroleum. It also stores and transports crude oil and natural gas through pipelines.
China Petroleum & Chemical Corp. also produces biofuels from used vegetable oil.
China Petrol & Chemical Corp ADR was established in 2000 with headquarters in Beijing, China. The company’s shares are listed on NYSE under the ticker symbol SNP. The company has a market capitalization of $80.34 Billion with revenues of $524.33 Billion. The Earning Per Share (EPS) of the company is 9.45. The current price-to-earnings ratio (P/E) is 5.65, and the dividend yield is 6.5758 (12.30%).
4. Honda Motor Company Ltd (HMC):
Honda Motor Company Ltd, commonly known as Honda, manufactures automobiles, bikes, and power equipment based in Japan. The company has four segments it operates through.
The Motorcycle segment deals with motorcycles’ production, development, and sale along with their spare parts. The Automobile segment focuses on the production and sale of automobiles and their parts. The Financial segment operates in sales financing and leasing of the company’s products. The fourth segment, Life Creation and Other Product, concern the development, production, and marketing of power products and their spare parts.
Honda Motor Co Ltd ADR was founded in 1946, with headquarters in Minato, Tokyo, Japan. The shares of this company are listed on New York Stock Exchange (NYSE) under the ticker HMC. Its current revenue is 11.45 Trillion, with a market capitalization of $43.94 Billion. The price-to-earnings ratio (P/E) is 8.06, and the dividend yield is 1.6053 (6.31%). Earnings per Share (EPS) is 3.16. Honda is on a recovery track and is an excellent option to invest in.
5. Beazer Homes USA Inc. (BZH):
Beazer Homes USA Inc. is a construction company that builds homes. The company builds in California, Arizona, Texas, Nevada, Indiana, New Jersey, Florida, North and South Carolina, Tennessee, Virginia, and many more. Based in the United States, Beazer Homes operates in 13 states of the country.
The company’s operations include building, decorating, furnishing, and modeling homes for communities. It markets through marketing vehicles, its website, display advertising, social media, billboards, and other additional activities.
The stocks of the company are currently being sold at a discounted price, so it is an opportunity to buy stocks as it has potential for growth in it.
Beazer Homes USA Inc. was established in 1985 with headquarters in Atlanta, Georgia. The company’s current market capitalization is $501.14 million, with 2.12 billion in revenues. The shares of this company are listed on New York Stock Exchange (NYSE) under the ticker BZH. The current price-to-earnings ratio (P/E) is 3.04. The Earning Per Share (EPS) of BZH is 5.37.
Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.