With the market still digesting the tremors of the banking sector fallout, investors may want to consider compelling value stocks to buy, even those trading near their 52-week highs. True, investors often wax poetic about buying low and selling high. However, in some cases, you can buy high and sell even higher. After all, a strong market performance typically underlies a robust enterprise.
Indeed, buying a low-priced equity simply because of its attractive entry point doesn’t always make sense. It’s more than possible for a deflated security to fall even further. Just look at some of the publicly traded regional banks that incurred extreme volatility and tacked onto their losses. Plus, with the market looking for any semblance of stability, some comfort exists in broader public support. Specifically, the below value stocks are undervalued relative to earnings. At the same time, each of these enterprises features double-digit return potential based on analysts’ assessments.
Value Stocks to Buy: Regeneron Pharmaceuticals (REGN)
A biotechnology firm, Regeneron Pharmaceuticals (NASDAQ:REGN) invents, develops, and commercializes life-transforming medicines for people with serious diseases. Its therapeutics aim to help those with eye diseases, inflammation, cancer, and many other conditions. In the trailing year, REGN gained nearly 10%. Its 52-week high stands at $800.48, not too far off from the time-of-writing price of $759.76.
Nevertheless, REGN represents one of the discounted value stocks to buy. Primarily, the market prices shares at a forward multiple of 18.28. As a discount to projected earnings, Regeneron ranks better than 72.13% of the industry. Also, it trades at 17.16 times the operating cash flow. In contrast, the sector median value is 26.36 times.
Notably, Regeneron enjoys a robust balance sheet, backed by an Altman Z-Score of 10.22. This indicates a very low risk of bankruptcy. As well, it’s a highly profitable enterprise with a net margin of 35.64%, beating out 93.49% of its peers. According to Wall Street analysts, REGN rates as a consensus moderate buy. Their average price target stands at $843.56, implying 11% upside potential.
Value Stocks to Buy: MasterCraft Boat (MCFT)
A sport boat manufacturer, MasterCraft Boat (NASDAQ:MCFT) doesn’t immediately seem like one of the value stocks to buy. With headwinds impacting the consumer economy, acquiring boats seems like a waste of money. Then again, the wealth gap that materialized following the Covid-19 pandemic favors the ultra-wealthy. Therefore, in a counterintuitive manner, MCFT may benefit.
Strictly looking at the numbers, it’s difficult to argue against MasterCraft. For one thing, the market prices MCFT at a trailing multiple of 10.36. As a discount to earnings, the company ranks better than 68.37% of its rivals. In addition, MCFT trades at 4.85 times free cash flow (FCF). This compares favorably to the sector median value of 15.57 times. Operationally, the company fires on all cylinders. Its three-year revenue growth rate pings at 15.2%. Further, its operating margin comes in at 17.16%. Finally, Wall Street analysts peg MCFT as a consensus strong buy. Their average price target stands at $37.60, implying 17% upside potential.
Value Stocks to Buy: Vitru (VTRU)
Based in Brazil, Vitru (NASDAQ:VTRU) is the largest private digital education institute in its home country. In the past 365 days, VTRU gained over 51% of equity value, a simply staggering figure. Its 52-week high stands at $23.99. That’s not all far removed from the current price of $23.01. Still, it could rank among the value stocks to buy.
Objectively, the company brings several attractive metrics to the table. For one thing, Vitru’s enterprise-value-to-revenue ratio sits below nearly 96% of the competition. Also, its EV-to-EBIT ratio is below almost 95% of the education industry. Of course, hearing such stats, one might wonder about the holistic picture. However, Vitru benefits from a stable balance sheet, with a debt-to-EBITDA ratio of 0.03, better than 98.18% of its rivals. Also, Vitru delivers a strong three-year revenue growth rate of 21.3% and an operating margin of 26.41%.
Turning to Wall Street, analysts peg VTRU as a consensus moderate buy. Moreover, their average price target stands at $27, implying over 17% upside potential.
Value Stocks to Buy: Atkore (ATKR)
An industrial player, Atkore (NYSE:ATKR) supplies cable management, conduit, PVC tubing, and metal tubing, among many other products. While it’s not the most exciting enterprise, its everyday relevance treated shares well. Since the start of the year, ATKR gained nearly 23%. In the past 365 days, it’s up 32%. Further, its 52-week high comes in at $154.86, not far removed from the current price of $140.89.
Still, Atkore makes an intriguing case for value stocks to buy and add to your portfolio. Objectively, the market prices ATKR at a forward multiple of 8.44. As a discount to projected earnings, the company ranks better than 93.16% of the industrial products sector. Further, it trades at 8.15 times FCF. In contrast, the sector median value is 22.82 times. Operationally, Atkore simply delivers the goods to its stakeholders. Its three-year revenue growth rate comes in at 30.1%. On the profitability end, the company’s net margin pings at 22.58%.
Lastly, covering analysts peg ATKR as a consensus strong buy. Further, their average price target stands at $166, implying nearly 18% upside potential.
Value Stocks to Buy: Diodes (DIOD)
A technology firm, Diodes (NASDAQ:DIOD) is a global manufacturer and supplier of application-specific standard products within the discrete, logic, analog, and mixed-signal semiconductor markets. In the trailing year, DIOD sits just a bit under breakeven. Its 52-week high stands at $97.45. At the time of writing, shares trade hands at $91.04.
Nevertheless, daring investors may want to consider Diodes as one of the value stocks to buy. First up, the market prices DIOD at a trailing multiple of 12.63. As a discount to earnings, the tech firm ranks better than 66.06% of its rivals. Also, DIOD trades at 10.67 times the operating cash flow. In contrast, the sector median value is 15.73 times. Operationally, Diodes isn’t as robust as other value stocks. Still, it more than holds its own with a three-year revenue growth rate of 21.7% and a net margin of 16.56%. Looking to the Street, covering analysts peg DIOD as a consensus strong buy. As well, their average price target stands at $107.60, implying over 18% upside potential.
Based in Geneva, Switzerland, STMicroelectronics (NYSE:STM) designs semiconductors for various applications including mobility and power infrastructures. Given its relevance, STM performed very well recently, gaining nearly 41% since the Jan. opener. In the trailing year, it gained almost 16%, a very healthy outcome given the present backdrop.
Despite its tremendous outperformance, STMicroelectronics offers more room to run as one of the value stocks to buy. Primarily, the market prices STM at a forward multiple of 11.75. As a discount to projected earnings, the company ranks better than 87.41% of the semiconductor industry. Also, STM trades at 8.76 times the operating cash flow. In contrast, the sector median value is 15.73 times. Additionally, STM delivers on the operational front. Its three-year sales growth rate pings at 19.1%. More impressively, its net margin comes in at 24.6%.
In closing, Wall Street analysts peg STM as a consensus moderate buy. Plus, their average price target stands at $61.20, implying over 23% upside potential.
Immersion Corp (IMMR)
A developer and licensor of touch-feedback technology (which also carries the title haptic tech), Immersion Corp (NASDAQ:IMMR) appeals because of its myriad potential applications. At the same time, investors should be aware of its underlying controversy. Many critics accuse Immersion of being a patent troll. However, troll or not, IMMR performed exceptionally well, gaining almost 47% of equity value in the trailing year.
Regardless of the dramatic spike up, IMMR could rank among the value stocks to buy. First, the market prices IMMR at a forward multiple of 11.21. As a discount to projected earnings, Immersion ranks better than 86.56% of the underlying software industry. Also, IMMR trades at 6.76 times FCF. In contrast, the sector median value is 23.21 times.
Now, unlike other value stocks, Immersion features a split personality regarding its operational profile. On the not-so-great side, its three-year revenue growth rate sits at only 0.2%. However, on the other hand, its net margin comes in at nearly 80%. Last month, BWS Financial’s Hamed Khorsand pegged IMMR as a buy. The expert anticipates shares hitting $11, implying upside potential of 36%.
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.