Last Friday’s U.S. jobs report showed that just 194,000 nonfarm payrolls were created in September, compared to 500,000 estimated by Dow Jones. Nevertheless, the S&P 500 managed to advance during the week as optimism about the U.S. debt ceiling increased, with Washington reaching a…
deal to raise the debt ceiling through December.
In addition, promising results from Merck & Co., Inc.’s (MRK) oral COVID-19 treatment have provided some support. Furthermore, according to a Factset report, more S&P 500 companies have issued positive EPS guidance for the third quarter. Given this backdrop, several low-priced stocks with strong growth potential could be solid bets now.
Wall Street analysts expect shares of Arcos Dorados Holdings Inc. (ARCO – Get Rating), Adecoagro S.A. (AGRO – Get Rating), and Cidara Therapeutics, Inc. (CDTX – Get Rating), which are trading at less than $10 but have solid growth potential, to rally 50% or more in price in the near term.
Based in Montevideo, Uruguay, ARCO operates 2,236 franchised McDonald’s Corporation’s (MCD) restaurants. The company has the exclusive right to own, operate, and grant franchises of MCD restaurants in 20 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, and Chile.
On August 11, 2021, Marcelo Rabach, ARCO CEO,said, “The opportunity for growth in our main markets remains robust, both organically with the emergence of new sales segments, such as our record-setting McDelivery, and inorganically through new, free-standing unit openings. We will focus on the factors we can control to capture these local growth opportunities while continuing to provide our guests with the best restaurant experience in Latin America and the Caribbean.”
ARCO’s total revenues surged 102.6% year-over-year to $592.70 million in the second quarter, ended June 30, 2021. The company’s adjusted EBITDA came in at $47.20 million compared to a$42.90 million loss in the prior-year period. Its net income was $4.90 million, compared to a $89.50 million loss in the year-ago period. Also, its EPS came in at $0.02, compared to a $0.43 loss per share in the prior year’s quarter.
ARCO’s EPS is expected to increase 350% year-over-year to $0.27 in its fiscal year 2022. In addition, the company’s revenue is expected to increase 29.7% year-over-year to $2.57 billion in fiscal 2021. The stock has soared 23.7% in price over the past year to close yesterday’s trading session at $5.17. Wall Street analysts expect the stock to hit $8 in the near term, which indicates a potential 54.7% upside.
It is no surprise that ARCO has an overall B rating, which equates to a Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock has a B grade for Growth, Sentiment, Momentum, and Value. Click here to see ARCO’s ratings for Quality and Stability as well. ARCO is ranked #21 of 46 stocks in the A-rated Restaurants industry.
Luxembourg-based agro-industrial company AGRO farms crops and other agricultural products, manages dairy operations, land transformation activities, sugar, ethanol, and energy production activities. The company owns 220,186 hectares of land, including 18 farms in Argentina, eight in Brazil, one in Uruguay, and 241 megawatts of installed cogeneration capacity.
AGRO’s net sales surged 54% year-over-year to $278.80 million in the second quarter, ended June 30, 2021. The company’s adjusted EBITDA in the Sugar, Ethanol & Energy segment grew 62.1% year-over-year to $73.6 million. Its net income came in at $15.70 million, compared to a $12.10 million loss in the year-ago period.
Analysts expect AGRO’s EPS and revenue to increase 35.1% and 31.5%, respectively, year-over-year to $1.51 and $1.08 billion in its fiscal year 2021. Over the past year…
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