As the overall market sell-off continues, the benchmark indexes have erased last week’s gains and slid into a bear market territory. However, this has caused the stocks of selected fundamentally sound companies to…
trade at heavily discounted valuations and are poised for a near-term rebound.
Furthermore, according to Vanguard Group, U.S. value stocks are projected to deliver annualized returns of 4.1% over the next 10 years. Increased investor interest in cheap value stocks is evident in the Vanguard Value ETF’s (VTV) 2.4% gains over the past month.
Given this backdrop, we think dirt-cheap yet fundamentally strong stocks Micron Technology, Inc. (MU), Perion Network Ltd. (PERI), Lenovo Group Limited (LNVGY), Telefonaktiebolaget LM Ericsson (publ)(ERIC), and Diodes Incorporated (DIOD) could prove to be wise bets now.
Micron Technology, Inc. (MU)
MU in New York City designs, manufactures, and sells memory and storage products worldwide. The company operates through four segments: Compute and Networking Business Unit; Mobile Business Unit; Storage Business Unit; and Embedded Business Unit.
On May 31, 2022, MU launched two new consumer storage products, the Crucial P3 Plus Gen4 NVMe and Crucial P3 NVMe solid-state drives. This launch of these products is expected to broaden the company’s SSD portfolio and offer its customers convenient storage up-gradation amid today’s digital world.
MU’s revenue came in at $7.79 billion for its fiscal 2022 second quarter, ended March 3, 2022, up 24.9% year-over-year. Its non-GAAP net income came in at $2.44 billion, up 116.7% year-over-year. Also, its non-GAAP EPS came in at $2.14, up 118.4% year-over-year.
In terms of forward EV/S, MU’s 2.32x is 19.4% lower than the 2.88x industry average. Its 2.44x forward P/S is 14.2% lower than the 2.84x industry average.
Analysts expect MU’s revenue to be $33.67 billion in its fiscal 2022, representing a 21.5% year-over-year rise. The company’s EPS is expected to increase 57.8% to $9.56 in 2022. It surpassed the Street’s EPS estimates in each of the trailing four quarters. And over the past month, the stock has gained 6.8% in price to close Friday’s trading session at $75.37.
MU’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
It has a B grade for Growth, Value, Momentum, Sentiment, and Quality. It is ranked #9 of 95 stocks in the B-rated Semiconductor & Wireless Chip industry. Click here to see the additional ratings for MU (Stability).
Click here to checkout our Semiconductor Industry Report for 2022
Perion Network Ltd. (PERI)
Headquartered in Holon, Israel, PERI provides digital advertising solutions to brands, agencies, and publishers in North America, Europe, and internationally. The company operates across the three faces of digital advertising, namely ad search; social media; and display/video/CTV.
On April 28, 2022, Doron Gerstel, PERI’s CEO, said, “With robust growth, increased profitability, and $342.5 million in cash and zero debt, Perion is poised to further accelerate its momentum. This positions us well for a post-cookie future, one where privacy consciousness will drive more and more advertising decisions.”
For the quarter ended March 31, 2022, PERI’s total revenue came in at $125.31 million, up 39.5% year-over-year. Its non-GAAP net income came in at $20.73 million, up 196.5% year-over-year, while its non-GAAP EPS was $0.44, up 131.6% year-over-year. Also, its adjusted EBITDA was $22.67 million, up 158.1% year-over-year.
PERI’s 0.86x forward EV/S is 60.8% lower than the 2.20x industry average. And its 5.42x forward EV/EBITDA is 36% lower than the 8.47x industry average.
PERI’s revenue is expected to come in at $629.75 million in 2022, representing a 31.6% year-over-year rise. The company’s EPS is expected to increase 37.3% year-over-year to $1.40 for the same period. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past month, the stock has declined 2.5%. However, it has gained 30.5% in price over the past year to close yesterday’s session at $20.79.
It is no surprise that PERI has an overall B rating, which equates to a Buy in our proprietary rating system. In addition…
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