4 Must-Own Value Stocks to Buy in June In the face of growing inflation and impending interest rate rises, fundamentally strong value stocks Computer Task Group (CTG), Genie Energy (GNE), Titan Machinery (TITN), and KT Corporation (KT) can...
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In the face of growing inflation and impending interest rate rises, fundamentally strong value stocks Computer Task Group (CTG), Genie Energy (GNE), Titan Machinery (TITN), and KT Corporation (KT) can be great picks now. Read on to learn more.
The major stock market indexes ended a choppy trading session on Friday, as Dow Jones was down 2.7%, while the S&P 500 and Nasdaq lost 2.9% and 3.5%, respectively. The decline came after the release of higher-than-expected U.S. inflation data. The Bureau of Labor Statistics reported that the U.S. consumer price index rose 8.6% last month, the fastest increase since December 1981. This has stoked worries on Wall Street that inflation has become more deep-rooted, which could potentially push Fed officials to take more aggressive actions.
The Federal Reserve is widely expected to raise interest rates by a half percentage point this week and again next month. Nevertheless, the current market volatility has led to many quality stocks trading at attractive valuations. And since value stocks typically perform well in a high-inflationary environment, it could be an opportune time to scoop up such stocks.
Computer Task Group, Incorporated (CTG), Genie Energy Ltd. (GNE), Titan Machinery Inc. (TITN), and KT Corporation to one's portfolio (KT) are currently trading at a significant discount to their peers. Also, the stocks are rated a "Strong Buy' in our proprietary POWR Ratings system. So, they could be a great addition to your portfolio now.
Computer Task Group, Incorporated (CTG)
Headquartered in Amherst, New York, CTG provides information and technology services in North America, South America, Western Europe, and India. It has three operational segments: North America IT Solutions and Services; Europe IT Solutions and Services; and Non-Strategic Technology Services.
In terms of forward non-GAAP P/E, CTG is trading at 13.36x, 25.9% lower than the 18.04x industry average. Also, in terms of its forward EV/Sales, the stock is currently trading at 0.33x, 88.1% lower than the 2.81x industry average.
In March, CTG announced the successful collaboration with VCU Health System during their Epic go-live in December 2021. Under this engagement, CTG provided solutions for legacy applications, critical go-live readiness activities, end-user training, workflow optimization, and in-person end-user application support for the VCU Health enterprise.
For the first quarter ending April 1, 2022, CTG's revenue amounted to $89.41 million. Its Non-GAAP operating income grew 26.2% year-over-year to $3.46 million, while its Non-GAAP net income amounted to $2.44 million, up 21.6% from its year-ago value. The company's EPS rose 50% from its prior-year quarter.
Analysts expect CTG's revenue to increase 0.4% year-over-year to $92.50 million for the second quarter ending June 2022. The consensus EPS estimate of $0.17 for the second quarter ending 2022, represents a 30.8% improvement year-over-year. The stock has gained 10.4% over the past nine months and 8.2% over the past month.
CTG's POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock also has an A grade for Value and a B for Sentiment and Stability. Within the Technology – Services industry, it is ranked #3 of 81 stocks. To see additional POWR Ratings for Growth, Quality, and Momentum for CTG, click here.
Genie Energy Ltd. (GNE)
Headquartered in Newark, New Jersey, along with its subsidiaries, supplies electricity and natural gas to residential and small business customers internationally. It has three operational segments: Genie Retail Energy (GRE); GRE International; and Genie Renewables.
In terms of trailing P/E, GNE is trading at 4.84x, 78.4% lower than the 22.39x industry average. Also, in terms of its trailing EV/Sales, the stock is currently trading at 0.35x, 91.9% lower than the 4.29x industry average.
GNE's total revenue increased 40.7% year-over-year to $107.50 million for the first quarter ending March 31, 2022. Its income from operations amounted to $24.40 million compared to a loss from operation of $5.50 million in the prior-year period. The company's cash and cash equivalent stood at $88.19 million for the three months ended March 31, 2022. The stock has gained 40.2% year-to-date and 49.3% over the past six months.
GNE's strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock also has an A grade for Value and a B for Sentiment and Growth. Within the Utilities – Domestic industry, it is ranked #1 of 67 stocks.
In total, we rate GNE on eight different levels. Beyond what we've stated above, we have also given GNE grades for Stability, Quality, and Momentum. Get all the GNE ratings here.
Titan Machinery Inc. (TITN)
Headquartered in West Fargo, North Dakota, TITN owns and operates a network of full-service agricultural and construction equipment stores in the United States and Europe. Agriculture; Construction; and International are the three operational segments of the company.
In terms of forward non-GAAP P/E, TITN is trading at 8.13x, 49.3% lower than the 16.02x industry average. Also, in terms of its forward EV/Sales, the stock is currently trading at 0.39x, 76% lower than the 1.61x industry average.
In the first quarter ending April 30, 2022, TITN's revenue total revenue increased 23.7% year-over-year to $461.01 million. Its income from operations grew 68.8% from its year-ago value to $24.54 million, while its net income improved 66.3% from its prior-year quarter to $17.54 million. The company's EPS rose 66% year-over-year to $0.78.
The consensus EPS estimate of $0.69 for the second quarter ending July 2022 represents a 21.1% year-over-year growth. Analysts expect revenue to increase 15.7% year-over-year to $437.03 million for the second quarter ending July 2022. Moreover, it has an impressive earnings surprise history, surpassing the consensus EPS estimates in all of the trailing four quarters. The company's shares have soared 10.1% over the past month.
It is no surprise that TITN has an overall A rating, equating to Strong Buy in our POWR Ratings system. TITN has a B grade for Growth, Value, and Momentum. In the Industrial – Equipment industry, it is ranked #5 of 93 stocks. Click here to see the additional POWR Ratings for TITN (Stability, Quality, and Sentiment).
KT Corporation (KT)
Headquartered in Seongnam, South Korea, KT provides integrated telecommunications and platform services in Korea and internationally. The company provides fixed-line telephone services, including local, domestic long-distance, international long-distance, and voice over Internet protocol telephone services, as well as interconnection services, broadband internet access services, and other internet-related services.
In terms of forward non-GAAP P/E, KT is trading at 6.39x, 61.8% lower than the 16.74x industry average. Also, in terms of its forward EV/Sales, the stock is currently trading at 0.82x, 59.7% lower than the 2.03x industry average.
During the first quarter of fiscal 2022, KT's operating revenue increased 4.1% year-over-year to KRW6029.40 billion ($4.70 billion). Its operating income grew 41.1% from its year-ago value to KRW5585.20 billion ($4.36 billion), while its net income improved 39.5% from its prior-year quarter to KRW326.50 billion ($254.67 million). The company's cash and cash equivalent amounted to KRW2753.10 billion.
The $2.30 consensus EPS estimate represents a 3.4% improvement year-over-year for fiscal 2023. Analysts expect KT's revenue to increase 2.7% year-over-year to $14.97 billion for fiscal 2023. The stock has gained 13.4% year-to-date and 10.7% over the past three months.
KT's strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock also has an A grade for Value, Stability, and Sentiment. Within the Telecom – Foreign Chip industry, it is ranked #2 of 46 stocks.
In total, we rate KT on eight different levels. Beyond what we've stated above, we have also given KT grades for Quality, Momentum, and Growth. Get all the KT ratings here.
CTG shares were unchanged in premarket trading Wednesday. Year-to-date, CTG has declined -11.13%, versus a -20.38% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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