4 Value Stocks with 40%+ Upside

There are some claiming that this market is too high and there is no value left to be found. And to them I say…RUBBISH!

Yes, the journey to find value, and exceptional upside, is made harder as we pound out record high after record high. But if you do a bit more homework, and dig a little bit deeper, there is value to be found like the 4 stocks highlighted in this article…

Melco Resorts (MLCO), Ingles Markets (IMKTA), Replimune Group (REPL) and Karyopharm Therapeutics (KPTI).

At the bottom of the article I will share the secret sauce of this research project narrowing down from about 8,000 stocks to just these 4. The shorthand version is that we don’t just want stocks with low PE’s or declining earnings prospects (aka value traps). Instead we want healthy growth stocks that just so happen to be 40% to 71% under fair value.

Here are more insights on each of these 4 stellar value stocks:

Melco Resorts (MLCO – Get Rating): Melco was impressing the investment world as one of the most attractive growth plays back in 2017 and 2018. That’s when they started to show their mettle as a leader in the Asian gaming world. Unfortunately, MLCO took it pretty hard over the past year as the US-China trade war flared up which brought with it concerns over the health of the Chinese economy.

Even with those dark clouds overhead, MLCO just kept proving that there was still plenty of growth on tap. Looking forward analysts expect them to keep growing earnings at 20% or more per year. Shares are finally showing life from that trade war induced weakness. Yet still a far cry from the average MLCO target of $31.33. And certainly way off the pace of the street high $37 target affixed to shares. Every stock is a little bit of a gamble, yet this gaming company shows good reason to believe it’s a pretty decent decent bet.

Replimune Group (REPL): Now we take a journey into the more speculative world of biotech stocks. In this case with REPL who has a lot riding on oncolytic immune-gene therapies to treat cancer. As you might imagine this is a play on the future potential. But for as small as the company is there are some big Wall Street analysts taking notice. 7 analysts in all are watching their every move and yet still all labeling REPL a Buy.

On the value front the average target shows 56.88% upside from current levels. Yet still some, like 5 Star analyst, Anthony Butler from Roth Capital believes that $30 is a more rightful destination for Replimune shares. This is the kind of stock that deserves a lot more research on your part than these short paragraphs. However, these 7 analysts who have done ample homework believe that REPL deserves your attention. So check it out.

Ingles Markets (IMKTA): This stock is wildly different than the other two. That’s because with IMKTA we are talking about a small regional supermarket chain in the Southeast with aspirations to grow beyond their current borders.

Yes groceries are a low margin business, but IMKTA has enjoyed success for about 50 years and ready to grow beyond the existing 200 locations. Analysts watching this story closely believe that $74 is fair value for shares, which makes Ingles Markets the most attractive value on our board today with 71% upside.

 

Leave a Reply

Your email address will not be published. Required fields are marked *