While the stock market is still under pressure, a potential rebound is expected in 2023. Pia Haak, chief investment officer at Swedbank Robur, Sweden's biggest fund manager, said, "We will have better visibility coming into 2023, and this will hopefully help markets." Moreover, according to Refinitiv IBES, consensus estimates project S&P 500 earnings to rise 4.4% in 2023.
On the other hand, value stocks have significantly outperformed growth stocks in 2022, and the momentum is slated to persist in 2023. Investors' interest in value stocks is evident from the Vanguard Russell 1000 Value ETF's (VONV) 10.1% returns over the past three months.
Given the backdrop, it could be wise to buy and hold fundamentally strong stocks Stellantis N.V. (STLA), Celestica Inc. (CLS), LSI Industries Inc. (LYTS), and Bassett Furniture Industries, Incorporated (BSET), which seem to be trading at a discount, ahead of 2023. These stocks are trading under $20.
Stellantis N.V. (STLA)
STLA designs, engineers, manufactures, distributes, and sells automobiles and light commercial vehicles, engines, transmission systems, metallurgical products, and production systems worldwide.
On December 23, 2022, STLA announced its plans to acquire a stake in Symbio, a Faurecia Michelin hydrogen company and leader in fuel cell technologies for the mobility industry.
Also, on December 22, 2022, STLA acquired aiMotive, a leading developer of advanced artificial intelligence and autonomous driving software. Such lucrative acquisitions are expected to bolster the company's future productivity.
STLA's consolidated shipments came in at 1,281,000 units for the 2022 third quarter, up 13.3% year-over-year. Its net revenues came in at €42.10 billion ($44.70 billion), up 29.1% year-over-year, while its North American net revenues came in at €21.07 billion ($22.37 billion), up 35.7% year-over-year.
STLA's forward EV/Sales of 0.13x is 88% lower than the industry average of 1.11x. Its forward Price/Sales of 0.24x is 71.2% lower than the industry average of 0.83x.
For fiscal 2022, STLA's revenue and EPS are expected to rise 9.3% and 2.5% year-over-year to $187.95 billion and $5.77, respectively. The stock has gained 13.7% over the past three months to close the last trading session at $14.00.
STLA's POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Also, the stock has an A grade for Value and a B for Stability and Sentiment. Within the Auto & Vehicle Manufacturers industry, it is ranked #8 out of 62 stocks. Click here for the additional POWR Ratings for Growth, Momentum, and Quality for STLA.
Celestica Inc. (CLS)
Headquartered in Toronto, Canada, CLS provides hardware platform and supply chain solutions in North America, Europe, and Asia. It operates through two segments, Advanced Technology Solutions; and Connectivity & Cloud Solutions.
On October 24, 2022, Rob Mionis, CLS' President and CEO, said, "The strong performance in recent quarters continues to be driven by new project ramps in our ATS segment and strong demand with market share gains in our Hardware Platform Solutions business."
CLS' revenue came in at $1.92 billion for the third quarter that ended September 30, 2022, up 31.1% year-over-year. Its net earnings came in at $45.70 million, up 29.8% year-over-year, while its EPS came in at $0.37, up 32.1% year-over-year.
CLS' forward EV/Sales of 0.25x is 89.7% lower than the industry average of 2.39x. Its forward Price/Sales of 0.19x is 92.2% lower than the industry average of 2.37x.
Analysts expect CLS' revenue to be $7.17 billion in 2022, representing a 27.2% year-over-year rise. The company's EPS is expected to increase 44.6% year-over-year to $1.88 in 2022. It surpassed EPS estimates in all four trailing quarters. The stock has gained 29.7% over the past three months to close the last trading session at $10.84.
CLS’ strong fundamentals are reflected in its POWR Ratings. It has an overall A rating, which indicates a Strong Buy in our proprietary rating system. It also has an A grade for Growth and a B for Value, Momentum, and Sentiment.
CLS is ranked first among 79 stocks in the Technology – Services industry. Click here for the additional POWR Ratings for Stability and Quality for CLS.
LSI Industries Inc. (LYTS)
LYTS produces and sells non-residential lighting and retail display solutions in the United States, Canada, Mexico, Australia, and Latin America. It operates in two segments, Lighting and Display Solutions.
On October 18, 2022, LYTS announced the official launch of REDiMount, a new lighting solution with a revolutionary mounting and installation system for refueling station canopies. This marks a solid addition to the company's portfolio.
For its fiscal 2023 first quarter that ended September 30, 2022, LYTS' net sales came in at $127.07 million, up 19.4% year-over-year. Its adjusted net income came in at $7.08 million, up 99.9% year-over-year, while its adjusted EPS came in at $0.25, up 92.3% year-over-year.
LYTS' forward EV/Sales of 0.82x is 48.4% lower than the industry average of 1.60x. Its forward Price/Sales of 0.66x is 46.1% lower than the industry average of 1.23x.
Street expects LYTS' revenue to increase 7.5% year-over-year to $489.05 million in 2023. Its EPS is expected to increase 28.1% year-over-year to $0.82 in 2023. It surpassed EPS estimates in all four trailing quarters. The stock has gained 74.7% over the past year to close the last trading session at $12.07.
It's no surprise that LYTS has an overall A (Strong Buy) rating in our POWR Ratings system. It has an A grade for Sentiment and a B for Growth, Value, and Quality.
It is ranked first among 90 stocks in the B-rated Industrial – Equipment industry. Click here for the additional POWR Ratings for Momentum and Stability for LYTS.
Bassett Furniture Industries, Incorporated (BSET)
BSET engages in manufacturing, marketing, and retail home furnishings in the United States and internationally. It operates through three segments: Wholesale; Retail company-owned Stores; and Logistical Services.
On September 29, 2022, Robert H. Spilman, Jr., BSET's Chairman, and CEO, said, "Bassett has the financial strength to weather a downturn and an integrated strategy designed to provide multiple paths for growth in the future."
For the quarter that ended August 27, 2022, BSET's net sales of furniture and accessories came in at $118.01 million, up 12.5% year-over-year. Its net income came in at $7.63 million, up 152.9% year-over-year. Also, its EPS came in at $0.82, up 164.5% year-over-year.
BSET's forward EV/Sales of 0.37x is 66.6% lower than the industry average of 1.11x, while its forward Price/Sales of 0.33x is 60.5% lower than the industry average of 0.83x.
BSET's revenue is expected to be $476.18 million in 2022. In addition, the company's EPS is expected to increase by 263.4% year-over-year to $6.65 in 2022. It surpassed EPS estimates in all four trailing quarters. Over the past year, the stock has gained 11% to close the last trading session at $17.07.
BSET's overall A rating equates to a Strong Buy in our proprietary POWR Ratings system. It has an A grade for Sentiment and Quality and a B grade for Value.
BSET is ranked #2 out of 59 stocks in the Home Improvement & Goods industry. Click here for BSET's ratings for Growth, Momentum, and Stability.
STLA shares rose $0.08 (+0.57%) in premarket trading Wednesday. Year-to-date, STLA has declined -25.37%, versus a -18.40% 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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