U.S. equities are taking a well-deserved breather on Tuesday, with traders returning from the long holiday weekend in search of value stocks. Meanwhile, we are deep in the heart of the fourth-quarter earnings season, much of the government remains closed and the Federal Reserve continues to worry over the pace of rate hikes this year.
But with some positive upward momentum seen out of the December low, beaten-up valuations in a number of large-cap stocks are beginning to look very attractive.
After a long period of extended price-earnings (P/E) multiples, a number of familiar names are trading at a discount. Here are five S&P 500 components that are looking good for bargain hunters:
Click to Enlarge Big-Tech heavyweight Apple (NASDAQ:AAPL) makes this list, despite its long run as a momentum sweetheart, thanks to bombed out sentiment surrounding the iPhone and an attractive 12.9x P/E multiple — which is not only below the S&P 500’s long-term average but well below what AAPL normally trades at.
Watch for some excitement to return on reports of a three-camera iPhone debut later this year that could enable to neat photo tricks and encourage another big upgrade cycle. The company will next report results on Jan. 29 after the close.
Analysts are looking for earnings of $4.19 per share on revenues of $84.1 billion. When the company last reported on Nov. 1, earnings of $2.91 per share beat estimates by 13 cents on a 19.6% rise in revenues.
Watch for an upside breakout above its 50-day moving average as the downtrend that started in September looks ready to end. The company is in the middle of a restructuring plan, with management exploring the sale of its cookie and fruit snacks business.
The company will next report results on Feb. 7 before the bell. Analysts are looking for earnings of 89 cents per share on revenues of $3.3 billion. When the company last reported on Oct. 31, earnings of $1.06 missed estimates by a penny on a 6.9% rise in revenues.
Click to Enlarge Hard drive and digital storage maker Seagate Technology (NASDAQ:STX) is trading at a deeply discounted multiple of just 5.9x, as semiconductor-related stocks suffer from worries over the health of the global economy and thus all the modern things that require processing power.
From refrigerators to smart speakers. The stock looks ready to push up and over resistance at its 50-day moving average, which has been in place since July. Such a move sets the stage for a run at the 200-day moving average.
The company will next report results on Feb. 4 after the close. Analysts are looking for earnings of $1.28 per share on revenues of $2.7 billion. When the company last reported on Nov. 2, earnings of $1.70 per share beat estimates by 16 cents on a 13.7% rise in revenues.
Exxon Mobil (XOM)
Click to Enlarge Shares of energy giant Exxon Mobil (NYSE:XOM) are recovering alongside a rebound in crude oil prices, enjoying a move above its 20-day moving average returning to the trading lows seen in early 2018.
XOM stock is trading at a discounted price-earnings multiple of 18x with prices stuck in a sideways pattern going back to 2012.
The company will next report results on Feb. 1 before the bell. Analysts are looking for earnings of $1.13 per share on revenues of $80.3 billion. When the company last reported on Nov. 2, earnings of $1.46 per share beat estimates by 24 cents on a 25.4% rise in revenues.
Constellation Brands (STZ)
Click to Enlarge Shares of wine and spirits maker Constellation Brands (NYSE:STZ) are suffering the first significant pullback since shares took off in 2012, trading below their 200-week moving average.
But a base of support is being formed now with valuations falling to a 13.1x price-earning multiple. Analysts at Atlantic Equities recently initiated coverage with an “overweight” rating.
The company will next report results on March 28 before the bell. Analysts are looking for earnings of $1.76 per share on revenues of $1.7 billion. When the company last reported on Jan. 9, earnings of $2.37 beat estimates by 29 cents on a 9.5% rise in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.