We are often led to believe that outperforming the stock market is a superhuman trait that only those on Wall Street possess. However, such a narrative is simply untrue. In fact, there are numerous investment opportunities available that could see you outperform the market by yourself. As such, I decided to dial in on a few of them to provide my readers with a helping hand.
Methodologically, I picked out three stocks that I’m familiar with. In addition, I revised their fundamentals and ensured their key quantitative metrics were/are well aligned. Moreover, I phased in a technical analysis of each.
Here are my three picks with the aforementioned in mind.
Limbach Holdings (LMB)
Limbach Holdings (NASDAQ:LMB) has an average daily trading volume of around 180,000 shares. Thus, it is evidently an overlooked stock. However, Limbach has the agility to deliver its shareholders with perpetual returns.
LMB stock has surged by about 1.6x year-over-year, driven by sequential positive events. For example, Limbach recently acquired Industrial Air for $13 million. The acquisition is set to contribute $30 million in revenue, adding to its existing revenue base of $516.4 million. Furthermore, Limbach delivered a comprehensive fourth-quarter earnings report, beating its revenue target by $13.32 million and its earnings target by four cents per share.
Now, what about Limbach’s market-based variables?
LMB stock is grossly undervalued. By way of illustration, LMB stock has a price-to-earnings-growth ratio of 0.13x, suggesting it is a growth-at-a-reasonable price opportunity. Of course, trapped value must be considered, but I deem LMB stock a strong buy opportunity!
Sibanye Stillwater (SBSW)
SBSW (NYSE:SBSW) stock is a buy-the-dip opportunity; it’s as simple as that. To those unaware, the company mines various precious metals, with its main presence being in South African and U.S. platinum group metals (PGMs).
Sibanye suffered numerous misfortunes last year. The company’s U.S. mines flooded, leading to lengthy maintenance procedures. Moreover, waning PGM prices led to underwhelming financial results. However, the tides have turned, and Sibanye’s U.S. mines are back online. Although PGM prices remain stale, platinum’s forward curve is sloping upward, suggesting price reversion is in-store.
SBSW stock has a price-to-book ratio of 1.19x, placing it in fairly valued territory. However, an interest rate pivot and better PGM prices will lead to a higher book value, meaning SBSW’s future valuation prospects are sound. In addition, SBSW stock’s forward dividend yield of 4.92% adds a floor to its stock.
Salient variables suggest SBSW stock is a buy. However, be careful of tax implications if you’re a U.S.-based investor because Sibanye is a foreign company!
JPMorgan Chase & Co. (JPM)
JPMorgan Chase & Co. (NYSE:JPM) is an interest-rate pivot story. Short-term U.S. inflation remains resilient, but a year-over-year vantage point illustrates that long-term price levels are deflating. As such, an interest rate pivot will likely occur in the latter stages of this year.
An interest rate pivot could result in a lower yield curve with a steepened slope, providing JPMorgan with lower funding costs. Such an event would contribute to JP Morgan’s funding costs and lend it with higher credit spreads on its commercial and consumer loans. JPMorgan’s fourth-quarter earnings results showed that it earned roughly $9.7 billion in net interest income, a 15% year-over-year decline. However, this segment will likely improve in the coming year due to the aforementioned reasons.
Despite experiencing a tough 2023, JPMorgan’s common equity tier 1 ratio of 15% shows its capital adequacy remains intact. Moreover, JPM’s stock price-to-book ratio of 1.82x could improve when an interest rate pivot occurs, as its asset base will be discounted at a lower rate.
Lastly, JPM stock is trading above its 10-, 50-, 100-, and 200-day moving averages, illustrating that a momentum trend has emerged. I’m backing JPM stock to prosper throughout 2024!
On the date of publication, Steve Booyens held long, indirect positions in SBSW and JPM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
