With so much attention paid to artificial intelligence and cryptocurrencies, the risk-on segment of the global markets has enjoyed tremendous upside, which subsequently makes the search for bargain stocks all the more important. While the heavy hitters can potentially still deliver, it may be time to consider more value-oriented ideas.
Fundamentally, that’s because the outflows of money from the technology sector clashes with the idea that the innovation bull market can continue uninterrupted. At some point, a correction in certain hyped-up names could materialize. Therefore, it just may be smarter to have some exposure to so-called bargain stocks; that is, ideas that don’t attract the spotlight but really should.
And yes, while these hidden-gem enterprises may be difficult to find, they’re certainly out there. And they also carry strong back from Wall Street’s top experts. On that note, below are bargain stocks to consider.
H&E Equipment Services (HEES)
Not the most well-known enterprise, H&E Equipment Services (NASDAQ:HEES) conducts operations in the industrial field, under the rental and leasing services subsegment. Per its public profile, H&E operates as an integrated equipment services company. It conducts business through five segments: Equipment Rentals, Sales of Rental Equipment, Sales of New Equipment, Parts Sales, and Repair and Maintenance Services.
While it might not be a household name, HEES is awfully enticing among bargain stocks. Since the start of the year, shares have moved up more than 22%. However, the security is undervalued, trading at only 11.68X forward earnings. That’s lower than the sector median multiple of 15.5X. As well, it trades at a modest 5.66X to operating cash flow.
For the current fiscal year, experts believe H&E will post earnings per share of $5.02 on sales of $1.58 billion. That’s a notable improvement over last year’s print of earnings of $4.78 per share on revenue of $1.47 billion.
Analysts rate HEES a unanimous strong buy with a $66.75 price target. The high-side estimate calls for $75.
Delta Air Lines (DAL)
With many questions about the economy – whether the Federal Reserve could engineer a soft landing or not – travel-related enterprises like Delta Air Lines (NYSE:DAL) presented many questions. However, with the odds potentially favoring a soft landing, DAL could be one of the bargain stocks to consider. It’s risky but it might pan out.
Fundamentally, one of the factors that could help Delta is that the revenge travel sentiment could carry over throughout 2024. I think it’s noteworthy that DAL stock gained almost 13% of equity value since the January opener. It’s also up 42% in the past 52 weeks. At the same time, shares trade at only 6.77X forward earnings. That’s lower than 79.37% of its peers.
Notably, after missing the bottom-line expectation in the first quarter of 2023, the subsequent three quarters saw an average positive earnings surprise of 8.7%. For 2024, experts believe EPS of $6.46 on sales of $56.91 billion is possible. That’s above last year’s print of $6.25 on revenue of $54.67 billion.
Analysts peg shares a unanimous strong buy with a $54.33 price target, projecting 19% upside.
International Money Express (IMXI)
Listed under the broad technology umbrella, International Money Express (NASDAQ:IMXI) operates as an omnichannel money remittance services company. Its services cover the U.S., Latin America, Mexico, Central and South America, the Caribbean, Africa and Asia. Since the start of the year, IMXI has only poked its head barely above parity. Over the past 52 weeks, it’s down almost 12%.
Granted, these metrics suggest that International Money ranks among the riskier ideas for bargain stocks. However, given the dynamic economic environment, it’s possible that we could see greater demand for remittance services. This might especially be the case with workers sending money to loved ones abroad. For those who want to take a shot, shares trade at a forward earnings multiple of 9.91X.
But it’s not just the low multiple that matters here. Last fiscal year, the company beat EPS targets three times out of four. Experts also believe that for the current fiscal year, EPS could land at $2.19 on sales of $691.17 million. That’s above last year’s print of $1.95 per share on sales of $658.74 million.
Analysts rate IMXI a consensus strong buy with a $26.25 target, implying over 19% growth potential.
Civitas Resources (CIVI)
An exploration and production company, Civitas Resources (NYSE:CIVI) operates in the oil and gas industry. As an upstream specialist, Civitas focuses on the acquisition, development and production of oil and natural gas in the Rocky Mountain region, primarily in the Field of the Denver-Julesburg Basin of Colorado. It also holds interest in production wells.
At first glance, hydrocarbon players might not seem a great idea for bargain stocks. If renewables take over, fossil fuels may go the way of the dinosaur. However, the physical advantage of hydrocarbons – basically high energy density – makes this proposition unlikely. So, investors should be able to trust its low forward earnings multiple of 6.72X. This is below nearly 72% of the competition.
To be fair, Civitas posted earnings figures that were all over the map against expectations last year. However, analysts believe 2024 could be a big year. They’re looking for EPS of $11.43 on sales of $5.45 billion. Last year, these metrics were $9.44 on sales of $3.48 billion.
Unsurprisingly, CIVI carries a unanimous strong buy rating with an $88.42 average price target.
International Seaways (INSW)
Another company plying its trade in the broader energy sector, International Seaways (NYSE:INSW) is tied to the oil and gas midstream subsegment. Per its public profile, the company owns and operates a fleet of oceangoing vessels for the transportation of crude oil and petroleum products in the international flag trade. It operates in two segments: Crude Tankers and Product Carriers.
Fundamentally, I believe that Wall Street is grossly discounting the importance of hydrocarbons. By logical deduction, they’re discounting the pertinence of transporting said energy commodities, especially with the crisis currently in Russia. Therefore, the forward earnings multiple of 5.04X may be unreasonably modest.
Granted, the projections for 2024 are not great. EPS may reach $9.90 on sales of $1.02 billion, below last year’s print of $10.62 on sales of $1.07 billion. However, these stats don’t jive with 2023’s average positive earnings surprise of 14.63%. I think we need to give INSW more credit.
Either way, analysts rate shares a unanimous strong buy with a $63.67 price target. It’s one of the bargain stocks to pick up for speculators.
United Therapeutics (UTHR)
Listed under the healthcare umbrella, United Therapeutics (NASDAQ:UTHR) is involved in the biotechnology segment. Per its public profile, United engages in the development and commercialization of products to address the unmet medical needs of patients with chronic and life-threatening diseases. Some of its targeted conditions include pulmonary arterial hypertension (PAH) and idiopathic pulmonary fibrosis.
Since the start of the year, UTHR gained almost 5%. In the past 52 weeks, it’s up over 10%. While these are modest stats, they could swing dramatically higher once more investors understand the positive implications. Currently, shares trade at a forward earnings multiple of 10.38X, below the sector median value of 21.72X.
Intriguingly, the company posted an average positive earnings surprise of nearly 9% in the past four quarters. For fiscal 2024, experts project that EPS will land at $23.95 on sales of $2.7 billion. That’s targeting a big year considering that in 2023, the states were $19.81 on revenue of $2.33 billion.
Analysts peg UTHR a consensus strong buy with a $299.45 average price target. It’s an intriguing idea for bargain stocks considering the implied 26% upside potential.
Copa (CPA)
Operating in the airline sector, Copa (NYSE:CPA) provides passenger and cargo services. Per its corporate profile, Copa offers approximately 327 daily scheduled flights to 78 destinations in 32 countries in North, Central, and South America. As well, it hits the Caribbean from its Panama City hub. Since the start of the year, CPA lost almost 1% of its market value.
It’s not the best start in the world. However, in the past 52 weeks, CPA moved up more than 17%. With revenge travel potentially poised to continue driving consumer sentiment this year, Copa is worth a look. Right now, shares trade at a forward earnings multiple of 6.65X. That’s lower than the sector median 12.9X.
What’s enticing about the company is that in the past four quarters, it printed a positive earnings surprise of 16.35%. For fiscal 2024, experts believe that EPS will land at $16.62 on revenue of $3.71 billion. Last year, per-share profits hit $16.79 but on sales of $3.46 billion.
Finally, analysts rate CPA a unanimous strong buy with a $160.83 price target. It’s one of the bargain stocks to consider for speculators.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
