The Federal Reserve’s aggressive interest rate hikes have raised fears that the economy could witness a double-dip recession this year. This, along with concerns over the continuing Russia-Ukraine war and extended COVID-19 lockdown in China, is expected to keep market sentiment bearish in the near term.
Therefore, investors seeking to bottom-fish amid the ongoing market correction could focus on low-priced and undervalued stocks from companies that possess solid fundamentals. That is because value stocks usually perform well in inflationary periods.
CEMEX, S.A.B. de C.V. (CX), Socket Mobile, Inc. (SCKT), B2Gold Corp. (BTG), H & M Hennes & Mauritz AB (HNNMY), and MiMedx Group, Inc. (MDXG) are currently trading at less than $5 and look highly undervalued. So, it could be wise to bet on these stocks now.
CEMEX, S.A.B. de C.V. (CX)
Based in Mexico, CX produces, distributes, and sells cement, ready-mix concrete, aggregates, clinker, and other construction materials worldwide. The company provides building solutions for housing projects, pavement projects, green building consultancy services, cement trade maritime services, and information technology solutions.
On May 4, 2022, CX’s corporate venture capital and open innovation unit CEMEX Ventures, invested in Chilean startup ObraLink, a developer of forecasting technology that automatically detects poured concrete, installed formwork, and steel concrete reinforcements in real-time. Its advanced thermal imaging helps builders monitor up to three times more measurement points and remove the formwork or molds. This can reduce a project’s structural costs by 15% and decrease formwork removal times by 40%. ObraLink's scalable technology is a perfect fit with CX’s service offering and should help CX improve both the efficiency of execution and completion time of its projects and grow into other markets.
CX’s net sales for its fiscal year 2022, first quarter ended March 31, 2022, increased 11.7% year-over-year to $3.77 billion. The company’s gross profit came in at $1.16 billion, representing a 6% year-over-year improvement. Its operating EBITDA was $690.76 million for the quarter, indicating a 2.5% rise from the prior-year period. The company had $592.86 million in cash and cash equivalents as of March 31, 2022.
Analysts expect CX’s EPS to grow 11.7% year-over-year to $0.58 for its fiscal year 2022, ending Dec. 31, 2022. The $15.46 billion consensus revenue estimate for the same fiscal year represents a 6.3% rise from the prior-year period. The company’s EPS is expected to grow at a 33.2% rate per annum over the next five years.
The stock’s 4.59x forward EV/EBITDA is 32.9% lower than the 6.84x industry average. In terms of forward Price/Cash Flow, CX is currently trading at 2.56x, which is 62% lower than the 6.75x industry average. Over the past week, the stock has declined 4.5% in price and closed yesterday’s trading session at $4.
CX’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
It has a B grade for Value and Sentiment. Click here to see the additional ratings for CX’s Growth, Stability, Quality, and Momentum. CX is ranked #18 of 48 stocks in the B-rated Industrial - Building Materials industry.
Click here to check out our Industrial Sector Report for 2022
Socket Mobile, Inc. (SCKT)
Newark, Calif.-based SCKT provides data capture and delivery solutions for enhanced productivity in workforce mobilization internationally. The company’s products are mobile applications used in point of sale, enterprise mobility, asset tracking, manufacturing process, quality control, transportation and logistics, event management, medical, and education.
On May 3, 2022, SCKT’s S550 cordless NFC reader/writer became the first to achieve CR12 certification from the NFC Forum Certification Program, ensuring it read all NFC Forum compliant tags that number in the billions. The combination of SCKT’s NFC hardware and CaptureSDK tools will help its application partners avoid the complexity and focus on using NFC data to enhance their applications. SCKT should witness wide recognition across the industry.
For its fiscal 2022 first quarter, ended March 31, 2022, SCKT’S revenue increased 30.8% year-over-year to $6.29 million. The company’s gross profit came in at $3.13 million, up 21.5% from the prior-year period. Its operating income was $464,000, indicating a 91.7% year-over-year improvement. SCKT’s net income came in at $342,000 for the quarter, representing a 68.5% rise from the prior-year period. Its EPS increased 33.3% year-over-year to $0.04. The company had $5.42 million in cash as of March 31, 2022.
Analysts expect the company’s EPS to hit $0.30 for its fiscal year 2022, ending Dec. 31, 2022, representing an 11.1% rise from the prior-year period. It surpassed the Street’s EPS estimates in three of the trailing four quarters. The $28.85 million consensus revenue estimate for the same fiscal year represents a 24.4% year-over-year improvement.
The stock’s 4.94x forward EV/EBITDA is 64.4% lower than the 13.86x industry average. In terms of forward Price/Cash Flow, SCKT is currently trading at 9.40x, which is 49% lower than the 18.42x industry average. Over the past week, the stock has declined 13.8% in price and closed yesterday’s trading session at $2.88.
SCKT's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
It has an A grade for Value and Sentiment and a B grade for Quality. Click here to see the additional ratings for SCKT (Momentum, Stability, and Growth). SCKT is ranked #20 of 49 stocks in the B-rated Technology - Hardware industry.
B2Gold Corp. (BTG)
Headquartered in Vancouver, Canada, BTG is a senior gold producer that operates gold mines and exploration and development projects in the Americas, Asia, Africa, and Europe. The company also has a 25% interest in the Calibre Mining Corp. (CXBMF) and approximately 19% interest in BeMetals Corp. (BMTLF).
For its fiscal 2021 full year ended March 31, 2022, BTG’s gold revenue increased marginally year-over-year to $365.58 million. The company had $648.76 million in cash and cash equivalents as of March 31, 2022.
Analysts expect the stock’s EPS to improve 8.3% year-over-year to $0.39 for its fiscal year 2022 ending Dec. 31, 2022. The 1.84 billion consensus revenue estimate for the same fiscal year represents a 4.3% rise from the prior-year period. Its EPS is expected to grow at a 20% rate per annum over the next five years.
BTG’s 3.60x forward EV/EBITDA is 48.1% lower than the 6.94x industry average. In terms of forward Price/Cash Flow, BTG is currently trading at 5.17x, which is 23.3% lower than the 6.73x industry average. Over the past week, the stock has declined 11.6% to close yesterday’s trading session at $3.81.
BTG’s POWR Ratings reflect its solid prospects. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
It has an A grade for Sentiment and a B grade for Quality. In addition to the POWR Ratings grades we have just highlighted, one can see the ratings for BTG’s Growth, Stability, Value, and Momentum here. BTG is ranked #6 of 38 stocks in the Miners - Gold industry.
Click here to check out our Gold and Silver Industry Report for 2022
H & M Hennes & Mauritz AB (HNNMY)
HNNMY is a Stockholm, Sweden-based clothing company that designs, manufactures, and markets clothing items and related accessories under brand names H&M, H&M Home, COS, Monki, Weekday, Cheap Monday, and Other Stories. The company offers its products in several branded stores and offers online and catalog sales. As of Nov. 30, 2021, the company had 54 online markets and approximately 4,801 stores in 75 markets.
On April 29, 2022, HNNMY expanded its collaboration with TextileGenesis, a pioneering traceability platform custom-built for the apparel ecosystem, to roll out TextileGenesis’ innovative traceability technology for all artificial cellulosic and recycled polyester in a phase-by-phase approach throughout 2022. Its textile traceability platform, using blockchain technology, provides HNNMY a highly valuable solution to improve supply chain traceability and transparency.
For its fiscal year 2022 first quarter, ended Feb. 28, 2022, HNNMY’s net sales increased 22.7% year-over-year to SEK49.17 billion ($4.86 billion). The company’s operating profit came in at SEK458 million ($45.25 million) for the quarter versus SEK1.13 billion ($111.46 million) in the year-ago period. Its net profit was SEK217 million ($21.44 million), compared to a SEK1.07 billion ($105.73 million) loss in the prior-year period. HNNMY’s EPS was SEK0.13 versus a SEK0.65 loss per share in the year-ago period. As of Feb. 28, 2022, the company had SEK27.40 billion ($2.71 billion) in cash and cash equivalents.
The stock’s 6.75x forward EV/EBITDA is 19.4% lower than the 8.37x industry average. In terms of trailing-12-month Price/Cash Flow, HNNMY is currently trading at 4.56x, which is 57% lower than the 10.59x industry average. The stock has declined 10.1% in price over the past month to close yesterday’s trading session at $2.41.
HNNMY’S strong fundamentals are reflected in its POWR Ratings. It has an overall B rating, which equates to Buy in our proprietary rating system.
The stock has an A grade for Quality. Click here to see the additional ratings for HNNMY (Growth, Value, Sentiment, Stability, and Momentum). The stock is ranked #7 of 68 stocks in the A-rated Fashion & Luxury industry.
MiMedx Group, Inc. (MDXG)
MDXG in Marietta, Ga., is a transformational placental biologics company that develops and distributes placental tissue allografts for various healthcare sectors. The company utilizes its patented and proprietary PURION process to produce allografts that retain the tissue's inherent biological properties and regulatory proteins. It focuses on addressing unmet clinical needs in advanced wound care, surgical recovery applications, and musculoskeletal conditions. It sells its products through a direct sales force, independent sales agents, and independent distributors.
As of March 31, 2022, the company had $75.68 million in cash and cash equivalents. Analysts expect the company’s revenue to hit $272.97 million for its fiscal year 2022, ending Dec. 31, 2023, representing a 5.6% rise from the prior-year period. It surpassed the consensus EPS estimates in three of the trailing four quarters. The company’s EPS is expected to improve at a 15% rate per annum over the next five years.
MDXG’s 1.62x forward EV/Sales is 51% lower than the 3.30x industry average. In terms of forward Price/Sales, MDXG is currently trading at 1.52x, which is 63.7% lower than the 4.17x industry average. Over the past month, the stock has declined 21.4% in price to close yesterday’s trading session at $3.68.
MDXG’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
It has a B grade for Value and Quality. Click here to see the additional ratings for MDXG (Growth, Sentiment, Momentum, and Stability). MDXG is ranked #25 of 153 stocks in the Medical - Devices & Equipment industry.
Click here to checkout our Healthcare Sector Report for 2022
What To Do Next?
If you would like to see more top stocks under $10, then you should check out our free special report:
What gives these stocks the right stuff to become big winners?
First, because they are all low-priced companies with explosive growth potential, that excel in key areas of growth, sentiment and momentum.
But even more important is that they are all top Buy rated stocks according to our coveted POWR Ratings system, Yes, that same system where top-rated stocks have averaged a +31.10% annual return.
Click below now to see these 3 exciting stocks which could double (or more!) in the year ahead:
CX shares were trading at $4.14 per share on Friday afternoon, up $0.14 (+3.50%). Year-to-date, CX has declined -38.94%, versus a -15.88% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
5 Top-Rated Stocks Under $5 to Buy This Month StockNews.com
