The strong bull market seen since the stock market’s deep correction last March may not reverse soon. That’s because the Fed has no plans to change its accommodative monetary policy soon because it views the economy as far from where it needs to be. Also, a $1.9 trillion stimulus package is expected to be passed next month.
The widespread availability of relatively cheap capital should be a boon for businesses of all sizes and expected $1,400 stimulus checks should boost consumer spending. Because the market’s rally since its slump last March has driven more of the well-known stocks up to their growth ceilings, we believe it could be a good idea now to bet on stocks that are trading at affordable prices but possess sound business models and financials. These stocks may have greater potential to deliver high returns in the coming months.
Cemex, S.A.B. de C.V.(CX), Companhia Siderúrgica Nacional S.A. (SID), and Israel Chemicals Limited (ICL), are all priced below $7 per share and should be good additions to your portfolio now. These companies have established business models and are well-positioned for expansion.
Cemex, S.A.B. de C.V.(CX)
CX is involved in the manufacture and marketing of construction material such as cement, concrete, and aggregates. The company has operations in the United States, Mexico, Europe, South America, and Asia. CX’s stock has gained 67% over the past year and closed Friday’s trading session at $6.33.
The company’s cement plant in Colombia recently received government approval to expand its production capacity. CX is acquiring ready-mix company Beck Readymix Concrete to expand its network and capacity in Texas.
For the quarter ended December 31, 2020, CX saw an increase in net sales of 9% compared to the same period last year. The company’s gross profit grew 7% during the same period.
CX is expected to see a revenue growth of 3.2% for the quarter ended March 31, 2021, and 6.1% in 2021. The company’s EPS is estimated to grow 136.7% in 2021 and at a rate of 33.2% per annum over the next five years.
CX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
CX has a B grade for Growth. In the A-rated, 52-stock Industrial – Building Materials industry, it is ranked #15.
In total, we rate CX on eight different levels. Beyond what we stated above we also have given CX grades for Stability, Quality, Sentiment, Value, and Momentum. Get all the CX ratings here.
Companhia Siderúrgica Nacional S.A. (SID)
SID is involved in the production of steel. The company manufactures carbon steel and steel products for application in the packaging, automotive, home appliance, and construction industries. SID’s stock has returned 120.4% over the past year; its last closing price was $6.48.
SID’s mining unit, CSN Mineração SA, plans to administer an initial public offering priced at 8.5 reais. It is estimated that the PO will raise $968 million.
For the quarter ended September 30, 2020, SID’s adjusted EBITDA grew 82% quarter-over-quarter. The company’s domestic sales grew 50% during the same period.
SID’s revenue is estimated to increase 16.6% for the quarter ended December 31, 2020, and 13.1% in 2021. The company’s EPS is expected to rise 166.7% for the quarter ended March 31, 2020 and 152.9% in 2021.
It’s no surprise that SID has an overall rating of B, which equates to Buy in our POWR Ratings system. SID has a grade of B for Growth, Quality, and Sentiment. In the A-rated, 35-stock Steel industry, it is ranked #8.
Click here to see the additional POWR Ratings for SID (Value, Stability, and Momentum).
Israel Chemicals Limited (ICL)
ICL is a specialty minerals company. The company has worldwide operations. The company operates primarily in the fertilizers, industrial products, and performance products segments. ICL’s stock price has increased 53.5% over the past year to close Friday’s trading session at $5.88.
The company recently completed the acquisition of Fertiláqua, one of the leading plant nutrition companies in Brazil, for $122 million. This acquisition is expected to help ICL build its distribution network to increase the sale of organic fertilizers.
For the quarter ended September 30, 2020, the company saw an increase in cash flow of 14.7% versus the previous quarter. The company’s income from phosphate specialties grew 13% compared to the same period last year.
ICL’s revenue is expected to grow 7.9% for the quarter ended December 31, 2020 and 7% in 2021. Its EPS is expected to grow at a rate of 3.9% per annum over the next five years.
ICL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary ratings system. ICL has a B grade for Stability and Value. In the A-rated, 97-stock Chemicals industry, it is ranked #12.
Beyond what we stated above we also have given ICL a grade for Growth, Quality, Value, and Momentum. Get all the ICL ratings here.
The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
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CX shares were trading at $6.25 per share on Monday morning, down $0.08 (-1.26%). Year-to-date, CX has gained 20.89%, versus a 3.72% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More...
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|ICL||Get Rating||Get Rating||Get Rating|