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A Trio of Potentially Underestimated Stocks to Consider

GuruFocus.com
·3 mins read

As of May 27, the following stocks appear underestimated by the market, as their price-earnings ratios are below 20 and their price-earnings to growth (PEG) ratios are below 1. Furthermore, these stocks have received positive recommendation ratings from Wall Street sell-side analysts.

UFP Industries Inc

The first company to consider is UFP Industries Inc (NASDAQ:UFPI), a Grand Rapids, Michigan-based lumber and wood producer.


Shares of UFP Industries Inc were trading at $47.05 per unit at close on Wednesday for a market capitalization of $2.87 billion.

The price-earnings ratio of 15.79 is less compelling than the industry median of 11.32. The PEG ratio of 0.93 is better positioned than the industry median of 1.01.

The share price has risen 41.3% over the past year to trade at about 7.8% above the midpoint of the 52-week range of $29.17 to $58.10.

GuruFocus assigned a high rating of 8 out of 10 for both the company's financial strength and its profitability.

Wall Street sell-side analysts recommend an overweight rating for this stock.

Medifast Inc

The second company to consider is Medifast Inc (NYSE:MED), a Baltimore, Maryland-based manufacturer and distributor of consumable health and nutritional products.

Shares of Medifast were trading at a price of $99.47 per unit at close on Wednesday for a market capitalization of $1.17 billion.

The price-earnings ratio of 15.81 and PEG ratio of 0.68 are more compelling than the industry medians of 20.16 and 2.18, respectively.

The share price has fallen by 25% over the past year to trade about 4.8% above the midpoint of the 52-week range of $49.03 to $159.41.

GuruFocus assigned a very good rating of 7 out of 10 to the company's financial strength and a rating of 9 out of 10 for its profitability.

Wall Street sell-side analysts issued one strong buy recommendation rating and one hold recommendation rating for this stock.

BMC Stock Holdings Inc

The third company to consider is BMC Stock Holdings Inc (NASDAQ:BMCH), a Raleigh, North Carolina-based building products and equipment supplier.

Shares of BMC Stock Holdings were trading at a price of $27 per unit at close on Wednesday for a market capitalization of $1.81 billion.

The price-earnings ratio of 16.27 is higher than the industry median of 11.1, while the PEG ratio of 0.65 appeals more than the industry median of 0.98.

The share price has risen nearly 31% over the past year to trade about 19.8% over the midpoint of the 52-week range of $13.38 to $31.67.

GuruFocus has assigned a positive score of 6 out of 10 to the company's financial strength and its profitability.

Wall Street sell-side analysts recommend an overweight rating for this stock.

Disclosure: I have no positions in any securities mentioned.

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This article first appeared on GuruFocus.