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3 Value Stocks Around 52-Week Highs

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It’s pretty easy to overlook value stocks… especially when we’re preparing for an economic boom after an unprecedented pandemic that shut down the economy for more than a year. So you’re going to need something more than a good value to get the attention of investors.

That’s where the Value Stocks at 52-Week High screen comes in. Not only does this look for good value, but it also demands Zacks Rank #1s (Strong Buys) or #2s (Buys) that are within 5% of their 52-week highs AND have a Zacks Value Style Score of “A”. Now that’s a lot more exciting than just talking about entry prices and sustainability.

Below are three stocks that have recently passed the test:

HP Inc. (HPQ)

Global shipments of PCs continued to soar in the first quarter of 2021 after being in high demand throughout 2020. That’s what happens when you shut down the economy and force hundreds of millions of workers/students to do their jobs/studies from their home offices/kitchen tables. It was certainly a boon for good old HP Inc. (HPQ).

The company is a leading provider of personal computing and other access devices, imaging and printing products, and related technologies, solutions and services to individuals and businesses of all sizes. It’s Personal Systems segment accounted for 69% of fiscal 2020 revenues, while the Printing segment accounted for 31%.

As part of the computer – mini computers space, HPQ is in the top 18% of the Zacks Industry Rank. Shares are up approximately 125% over the past 12 months and more than 37% this year. It has beaten the Zacks Consensus Estimate for eight straight quarters now and will be taking centerstage again later this month on May 27.

It’s most recent report included earnings per share of 92 cents, which beat the Zacks Consensus Estimate by 41.5% and brought the four-quarter average surprise to over 22%. The result also marked a solid improvement over the previous year’s 65%.

Revenues of $15.6 billion inched past the Zacks Consensus Estimate of $15.2 billion and improved 7% year over year. Revenue for Personal Systems rose 7%, including a 34% increase for the consumer side. Revenue for the Printing was also up 7% with the consumer increasing 55%. As you’d expect, each segment saw declines for their commercial sides amid the pandemic.

It generated $0.9 billion in free cash flow during the quarter and paid a dividend of $0.1938 per share. HP repurchased about 60.2 million shares of common stock and was, therefore, able to return 179% of free cash flow to shareholders.

Looking forward, HP expects non-GAAP earnings per share between $3.15 and $3.25 for fiscal 2021. The Zacks Consensus Estimate for that year (which ends in October) is up 25% over the past three months to $3.34. Expectations for next fiscal year (ending October 2022) are up 13% in that time to $3.38.

The year-over-year improvement is only four cents at the moment, but that’s better than a lot of companies these days. There’s plenty of time for improvement, especially since many people will likely choose to continue working from home. That will keep demand robust for desktops, notebooks and workstations moving forward.



Interpublic Group of Companies (IPG)

There’s going to be so much more to advertise in the next few months! With the world’s largest economy about to re-open after an unprecedented shutdown, the marketing & advertising space will be getting a lot of business. Companies will want to harness as much of that pent-up demand as possible to make up for this year-long lull, so they’re going to need a partner that knows what they’re doing and has a track record of success.

That’s the cue for Interpublic Group of Companies (IPG), which is one of the world leaders in advertising and marketing services. The company specializes in consumer advertising, digital marketing, public relations, communications planning & media buying, and specialized communications disciplines. IPG has a broad list of global and regional customers in more than 110 countries.

Shares of IPG are up approximately 110% in the past 12 months and about 40% so far in 2021. The company has put together 11 straight quarters of positive surprises. The most recent came late last month.

Earnings per share of 45 cents beat the Zacks Consensus Estimate by more than 181%, bringing the four-quarter average to more than 61%. Net revenues of $2.03 billion beat our expectation by 2.8% and improved from the previous year by the same percentage.

IPG’s digital capabilities, diversified business model and geographic reach offer the company an advantage moving forward. Plus, it really knows how to take care of its shareholders. IPG paid $398.1 million in dividends last year and $363.1 million in 2019.

Earnings estimates have been on the rise over the past 30 days. The Zacks Consensus Estimate for this year is up 8.2% in that time to $2.12, while next year has advanced 8.5% to $2.31. Therefore, analysts currently expected year-over-year profit growth of 9%, which is likely to increase as the economy gets back to normal.



Foot Locker (FL)

Remember when a salesperson would actually put the shoe on your foot? That was back in the days when no one heard of ‘social distancing’. Like nearly everything else, buying shoes sure has changed over the years. Not only is Al Bundy not necessary, but you don’t even really need the store either.

Take Foot Locker (FL) for example. This company got both barrels from the pandemic with store closures and supply chain congestion… and yet it’s still beating earnings expectations and enjoying upward estimate revisions. Like any company that made it through this shutdown, it learned how to thrive digitally and is expecting big things once we reopen.

Foot Locker is a retailer of athletic shoes and apparel with approximately 3,000 stores across 28 countries. As part of the Retail – Apparel and Shoes space, it’s in the top 27% of the Zacks Industry Rank. Shares are up approximately 173% over the past 12 months, including around 57% year to date.

The company reports again on May 21 when it will be going for a fourth straight quarter with a positive earnings surprise.

In its fiscal fourth quarter, FL reported earnings per share of $1.55, which topped the Zacks Consensus Estimate by practically 14%. Total sales of $2.19 billion fell short of our expectations and declined year over year by 1.4%. However, its digital business saw double-digit growth with strength across the board.

With covid still around (though hopefully on its last legs), FL still doesn’t feel comfortable offering a guidance for the year. However, the digital growth, robust brand portfolio and smart inventory management are all positives moving forward. In fact, analysts are feeling optimistic for the future.

The Zacks Consensus Estimate for this year (ending January 2022) advanced 4.5% over the past three months to $4.63. Expectations for next year (ending January 2023) are up 6.1% in that time to $5.04. Therefore, analysts currently expect year over year growth of just about 9%.



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