While the stock market has been volatile amid the multi-decade high inflation and consecutive rate hikes, many experts anticipate a rebound this year. Moreover, U.S. Treasury Secretary Janet Yellen said, “I believe by the end of next year, you will see much lower inflation.”
According to St. Louis Federal Reserve leader James Bullard, the odds of the U.S. economy achieving a ‘soft landing’ has increased from the 2022 fall. He believes the economy will rebound with a strong labor market.
In addition, Goldman Sachs Strategists believe value stocks will again outperform growth stocks in 2023. Investors’ interest in value stocks is evident from the Vanguard Russell 1000 Value ETF’s (VONV) 6.1% gains over the past three months.
Therefore, quality stocks Mazda Motor Corporation (MZDAY), Good Times Restaurants Inc. (GTIM), Venus Concept Inc. (VERO), and Data Storage Corporation (DTST), which are currently trading at heavy discounts to their peers, could be solid buys now.
Mazda Motor Corporation (MZDAY)
Headquartered in Hiroshima, Japan, MZDAY manufactures and sells passenger cars and commercial vehicles in Japan, the United States, North America, Europe, and internationally.
On November 22, 2022, MZDAY declared its plans to complete the electrification of all vehicle models by 2030. For this purpose, MZDAY has signed collaborative agreements with Imasen Electric Industrial Co., Ltd., Ondo Corporation, Chuo Kaseihin Co., Inc., Hiroshima Aluminum Industry Co., Ltd., HIROTEC Corporation, Fukuta Electric & Machinery Co., Ltd. and ROHM Co., Ltd. This is an apparent boost for the company’s EV portfolio.
For the six months that ended September 30, 2022, MZDAY’s net sales came in at ¥1.64 trillion ($12.23 billion), up 9.8% year-over-year. Its gross profit came in at ¥354.85 billion ($2.64 billion), up 10.2% year-over-year. Also, its net income came in at ¥86.42 billion ($643.27 million), up 256.3% year-over-year.
In terms of forward EV/Sales, MZDAY’s 0.15x is 87.1% lower than the industry average of 1.12x. Its forward Price/Sales of 0.15x is 82.1% lower than the industry average of 0.86x.
MZDAY’s revenue is expected to increase 48.9% year-over-year to $8.55 billion for the quarter ending December 2022. The stock has gained 8.9% over the past three months to close the last trading session at $3.61.
MZDAY’s POWR Ratings reflect its promising outlook. It has an overall A rating representing a Strong Buy in our POWR Rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
MZDAY has an A grade for Growth and Value and a B for Quality. It is ranked #4 out of 62 stocks in the Auto & Vehicle Manufacturers industry. Click here to see the additional POWR Ratings for MZDAY (Momentum, Stability, and Sentiment).
Good Times Restaurants Inc. (GTIM)
GTIM and its subsidiaries engage in the restaurant business in the United States.
On December 15, 2022, Ryan M. Zink, GTIM’s CEO, said, “Building on customer loyalty, we are offering gift cards at large box retailers which drives direct sales through gift card redemption and is increasing brand awareness outside our four walls.”
GTIM’s Bad Daddy’s restaurant sales came in at $103.22 million for fiscal 2022, up 16.5% year-over-year. Its Good Times franchise revenues came in at $664,000, up 2.9% year-over-year.
GTIM’s trailing-12-month Price/Sales of 0.22x is 74.8% lower than the industry average of 0.86x. Its trailing-12-month Price/Book of 1.12x is 44.2% lower than the industry average of 2.00x.
Street expects GTIM’s EPS to rise 30% per annum for the next five years. Over the past three months, the stock has gained 12.6% to close the last trading session at $2.41.
GTIM has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Value and a B grade for Growth, Momentum, Sentiment, and Quality.
GTIM is ranked first among 47 stocks in the A-rated Restaurants industry. Click here to see GTIM’s ratings for Stability.
Venus Concept Inc. (VERO)
Headquartered in Toronto, Canada, medical technology company VERO develops, commercializes, and delivers minimally invasive and non-invasive medical aesthetic and hair restoration technologies and related services in the United States and internationally.
On November 10, 2022, Rajiv De Silva, VERO’s CEO, said, “The organization remains highly focused on our key strategic initiatives to further enhance the cash flow profile of our business and to accelerate our path to long-term, sustainable, profitability.”
VERO’s product and services revenue came in at $14.35 million for the third quarter that ended September 30, 2022, up 20.3% year-over-year. Its total current liabilities came in at $29.51 million for the period ended September 30, 2022, compared to $31.21 million for the period ended December 31, 2021.
VERO’s forward EV/Sales of 0.94x is 76.3% lower than the industry average of 3.97x. Its forward Price/Sales of 0.22x is 95% lower than the industry average of 4.45x.
VERO’s revenue is expected to increase 4.8% year-over-year to $105.15 million in 2023. Its EPS is expected to increase 45.3% year-over-year in 2023. The stock has gained 7.6% over the past month to close the last trading session at $0.30.
It’s no surprise that VERO has an overall B rating, equating to a Buy in our POWR Ratings system. It has an A grade for Sentiment and a B grade for Growth and Value.
It is ranked #58 out of 181 stocks in the Medical - Devices & Equipment industry. Click here to see the additional POWR Ratings for VERO (Momentum, Stability, and Quality).
Data Storage Corporation (DTST)
DTST provides multi-cloud information technology solutions in the U.S. The company offers data protection and disaster recovery solutions, high availability, data vaulting, DRaaS, IaaS, message logic, standby server, support, maintenance, and internet solutions.
On November 15, 2022, Chuck Piluso, DTST’s CEO, said, “We are actively penetrating billion-dollar markets, while executing on our strategy of securing high-margin, recurring, subscription-based cloud and managed services contracts.”
DTST’s sales came in at $4.42 million for the third quarter that ended September 30, 2022, up 14.5% year-over-year. Its gross profit came in at $1.85 million, up 20.1% year-over-year.
DTST’s forward EV/Sales of 0.04x is 98.5% lower than the industry average of 2.52x. Its forward Price/Sales of 0.44x is 82.4% lower than the industry average of 2.51x.
Street expects DTST’s revenue to increase 56.6% year-over-year to $23.30 million for the yet-to-be-reported fiscal 2022. Its EPS is 113.6% year-over-year to $0.03 in 2023. It surpassed EPS estimates in three of four trailing quarters. DTST has gained 2% year-to-date to close the last trading session at $1.51.
DTST's overall B rating equates to a Buy in our POWR Ratings system. It has an A grade for Sentiment and a B grade for Value and Quality.
Within the Internet industry, it is ranked #6 out of 66 stocks. Also, click here to see the additional POWR Ratings for Growth, Momentum, and Stability for DTST.
MZDAY shares were trading at $3.72 per share on Friday morning, up $0.12 (+3.19%). Year-to-date, MZDAY has declined -1.06%, versus a -0.13% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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