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3 Value Stocks that Could Be Making a Comeback

Saturday, October 24, 2020 | Sean Sechler
3 Value Stocks that Could Be Making a Comeback

Everyone likes to get a good deal when they make a purchase, especially when it comes to investing. However, identifying stocks that are significantly undervalued can be a tough task in today’s market. With fundamentals seemingly becoming an afterthought for many of the hottest companies, now is a good time to start exploring sectors that might not feature the most exciting stocks but do offer good value.

Value stocks have underperformed growth stocks for quite some time now, but some of the most beaten up or stagnant areas of the market are starting to show signs of life. 3 particular value stocks look like they could be making a comeback in the next few months. While these companies don’t necessarily offer massive upside, they can still pay off over the long run for patient long-term investors. Let’s take a look at 3 value stocks that could be making a comeback below.

Ford Motors (NYSE:F)

It’s hard to believe that one of the largest automobile companies in the world is trading for under $10 a share, but that happens to be the case with Ford Motors. It’s a company that has performed poorly throughout 2020 as the automotive industry’s sales took a hit from the pandemic. With that said, there are reasons for optimism here that might mean this iconic blue-chip stock has a few more miles left in the tank. Ford recently made a CEO change that could be just what the company needs to turn things around.

New CEO Jim Farley is making sensible changes to the company’s strategy with plans to “turn around automotive operations; allocate capital to Ford’s strongest franchises and high-growth opportunities; produce compelling, uniquely Ford electric vehicles at scale; and stand up new AV-enabled businesses”. Ford has already invested over $10 billion in its electric vehicles business and is also working with AI self-driving technology, which is certainly a positive development given the current market trends. There’s also the fact that Ford recently released its Q3 sales results in China and saw growth of 25.4% which was the largest year-over-year sales increase since 2016. It’s a value stock that’s worth a look even though there might be some bumps in the road.

NCR Corporation (NYSE:NCR)

Another value stock worth looking at right now is NCR Corporation, a company that is a global leader in point-of-sale software and multi-vendor ATM software. NCR has been hit hard by the pandemic as foot traffic in retail stores and in restaurants plunged. The stock is down over 30% year-to-date and trades at an attractive P/E ratio of 6.62, which means investors that are interested in quality companies at bargain prices should be interested.

Although there have been quite a few retail bankruptcies and revenue is expected to decline for the company in 2020, the NCR has made a lot of positive strides in growing its software business and restructuring the company to make way for future acquisitions. NCR is also innovating the way that people pay for goods and services, which could be a big growth catalyst going forward. Since people are in favor of contactless payments and self-service checkouts now more than ever, NCR will likely benefit in the long-term as it already offers the hardware and software that businesses need to provide those payment options.

Morgan Stanley (NYSE:MS)

Morgan Stanley is one of the largest financial services companies in the U.S. that operates in investment banking, securities, and wealth management. While the financial sector has struggled this year in a low-interest-rate environment, this company recently reported strong earnings and is one of the better bank stocks for investors to look into. It is currently trading at an attractive valuation with a P/E ratio of 8.73 when compared to the other big banks.

The company beat analyst expectations on Q3 revenue by $1 billion largely driven by strong performance in the trading business. Q3 Revenues grew by 16% year-over-year and Q3 net income was up by 25% year-over-year. These numbers tell investors that Morgan Stanley is well-equipped to manage risk and put up strong growth even during challenging periods. You also have a dividend yield of 2.71% and a very solid balance sheet that makes this a high-quality value stock. With the strong recovery in equity markets since March, lots of liquidity in fixed income markets, and a hot IPO market, Morgan Stanley is an often-overlooked value stock that could be in for a strong comeback sooner rather than later.

 

 

 

 

 

Companies Mentioned in This Article

CompanyBeat the Market™ RankCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Ford Motor (F)1.3$9.09flatN/A-227.25Hold$8.92
NCR (NCR)1.9$28.63flatN/A8.97Buy$28.88
Morgan Stanley (MS)2.3$63.84flat2.19%10.77Buy$55.86
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7 Transportation Stocks You Can’t Ignore

There is a situation developing in the U.S. that will drive revenue and profits for the transportation industry for many years to come. It started to develop with the pandemic, began to grow when the recession was less than expected, and was later compounded by an economic rebound that is much stronger than expected.

When the pandemic struck and lock-downs took effect manufacturers shuttered their plants and supply chains dried up. When Congress sent out the stimulus checks it sparked a round of consumer spending that has wiped products off of shelves. Now, with inventories across industries reportedly down high-single to low-double digits from the previous year, there is a need for 1) manufacturing to meet demand and rebuild inventory and 2) transportation/shipping that is growing by the day.

We have compiled a list of 7 transportation stocks that can't be ignored,

View the "7 Transportation Stocks You Can’t Ignore".

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