The October CPI data, issued earlier last month, indicated a slowdown in inflation. Moreover, Fed Chair Jerome Powell recently suggested an eventual slowdown in rate hikes, which might commence in December 2022.

Broader markets have responded positively to Powell’s assurance as stocks witnessed a substantial rally. On the other hand, value stocks have historically outperformed growth stocks when interest rates are high.

Investors’ interest in value stocks is evident from the Vanguard Value ETF’s (VTV) 5.6% gains over the past month. Given the backdrop, quality, cheap stocks Overseas Shipholding Group, Inc. (OSG) and Good Times Restaurants Inc. (GTIM) might be ideal buys under $10 this week.

Overseas Shipholding Group, Inc. (OSG)

OSG is the owner and operator of a fleet of oceangoing vessels engaged in transporting crude oil and petroleum products in the U.S. flag trade. The company serves independent oil traders, refinery operators, and government entities.

On October 4, 2022, Sam Norton, President, and CEO, said, “Financial results achieved during the past quarter provide a welcome affirmation of our long-held belief in the viability of OSG’s business strategy, exceeding our expectations and signaling continued strength through the balance of the year and into 2023.”

OSG’s trailing-12- month EV/ Sales is currently trading at 1.62x, 19.2% lower than the industry average of 2.01x. Its trailing-12-month Price/Sales multiple of 0.58 is 57.6% lower than the industry average of 1.37.

OSG’s trailing-12-month levered FCF margin of 15.41% is 132.8% higher than the 6.62% industry average.

OSG’s shipping revenues came in at $123.06 million for the third quarter that ended September 30, 2022, up 31% year-over-year. Moreover, its net profit came in at $13.25 million, compared to a net loss of $16.01 million in the year-ago period. Moreover, its EPS came in at $0.15, compared to a loss per share of $0.18 in the prior-year period.

Over the past year, the stock has gained 71% to close the last trading session at $2.89.

OSG’s strong fundamentals are reflected in its POWR Ratings. The stock’s overall A rating indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

OSG has an A grade for Momentum and Quality and a B for Growth, Value, and Sentiment. In the A-rated Shipping industry, it is ranked first among 47 stocks. Click here for the additional POWR Ratings for Stability for OSG.

Good Times Restaurants Inc. (GTIM)

GTIM engages in the restaurant business in the United States. The company operates and franchises Good Times Burgers & Frozen Custard and Bad Daddy’s Burger Bar.

GTIM’s trailing-12- month EV/ Sales are trading at 0.55x, 50.8% lower than the industry average of 1.13x. Its trailing-12-month Price/Sales multiple of 0.23 is 73.3% lower than the industry average of 0.86.

GTIM’s trailing-12-month levered FCF margin of 4.23% is 210.1% higher than the 1.37% industry average.

GTIM’s total net revenues came in at $36.50 billion for the third quarter that ended June 28, 2022, up 7.5% year-over-year. Its restaurant sales increased 7.6% year-over-year to $36.27 billion. Also, its Bad Daddy’s Burger Bar restaurant sales increased 11.3% year-over-year to $27.17 million.

Street expects GTIM’s EPS to grow 30% per annum for the next five years. GTIM’s shares have gained intraday to close the last trading session at $2.50

GTIM has an overall rating of A, which equates to a Strong Buy in our POWR Ratings system.

It has an A grade for Value and a B for Growth, Momentum, Sentiment, and Quality. GTIM is ranked first among 47 stocks in the A-rated Restaurants industry. Click here for the additional POWR Ratings for GTIM (Stability).

OSG shares were trading at $2.91 per share on Friday afternoon, up $0.02 (+0.69%). Year-to-date, OSG has gained 54.79%, versus a -13.30% rise in the benchmark S&P 500 index during the same period.

About the Author: Rashmi Kumari

Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions. More...

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