The newly identified COVID-19 omicron variant has dampened investor sentiment, with global markets showing weakness. However, with initial findings suggesting the effects of the variant may be mild, experts believe it will not halt the U.S. economic recovery. According to Marc Chandler, chief market strategist at Bannockburn Global Forex, “People feel a bit more confident that while the new variant might be highly contagious, it looks like so far the conditions are mild.”
In addition, concerning the mildness of the variant’s effects, Investor Bill Ackman said, “If this turns out to be true, this is bullish, not bearish for markets.” This represents a positive outlook for the overall market at this juncture, and thereby, quality stocks trading at affordable prices could be wise bets now.
Fundamentally strong stocks Teva Pharmaceutical Industries Limited (TEVA), Himax Technologies, Inc. (HIMX), YPF Sociedad Anónima (YPF), and LexinFintech Holdings Ltd. (LX), are currently trading at less than $15 per share and could be potential outperformers.
Teva Pharmaceutical Industries Limited (TEVA)
Based in Tel Aviv-Yafo, Israel, TEVA is a pharmaceutical company. It develops, manufactures, markets, and distributes generic medicines, specialty medicines, and biopharmaceutical products in North America, Europe, and internationally.
On November 25, Quantum Genomics, a biopharmaceutical company that specializes in developing a new drug class that targets the brain to treat difficult-to-treat/resistant hypertension, announced an exclusive license agreement with TEVA subsidiary, Teva Israel Ltd., to market firibastat in Israel. This could help increase the company’s revenue.
For the third quarter, ended September 30, 2021, TEVA’s generic products revenue for its European segment came in at $895 million, up 8.6% year-over-year. Its non-GAAP net income was $651 million, up 2.2% year-over-year. And its non-GAAP EPS increased 1.7% year-over-year to $0.59.
In terms of forward EV/S, TEVA’s 1.99x is 65.8% lower than the 5.81x industry average. Its forward P/S is also 91.9% lower than the 6.85x industry average.
TEVA’s revenue is expected to come in at $16.32 billion in its fiscal year 2022. TEVA’s EPS is expected to increase 4.4% year-over-year to $2.63 in the next year. The stock has gained 1.6% in price since hitting its 52-week low of $8.03 on December 2, 2021, to close yesterday’s trading session at $8.16.
TEVA’s POWR Ratings reflect its promising outlook. It has an overall B rating, which represents a Buy in our POWR Rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
TEVA has an A grade for Value and a B grade for Growth. It is ranked #33 of 196 stocks in the Medical – Pharmaceuticals industry. Click here to see the additional POWR Ratings for TEVA (Stability, Momentum, Sentiment, and Quality).
Himax Technologies, Inc. (HIMX)
Headquartered in Tainan City, Taiwan, fabless semiconductor company HIMX provides display imaging processing technologies in China, Taiwan, the Philippines, Korea, Japan, Europe, and the USA. It has two segments: Driver IC and Non-Driver Products.
On November 4, 2021, Jordan Wu, President and Chief Executive Officer of Himax, said, “Backed by solid supply agreements, the automotive segment is on track to become our single largest revenue contributor starting 2022, and we will be able to solidify our leading position by further widening the gap with our competitors.”
For the third quarter, ended September 30, 2021, HIMX’s total revenues increased 75.4% year-over-year to $420.94 million. The company’s operating income came in at $148.24 million, up 1,469.7% year-over-year. And its gross profit was $216.72 million, up 304.3% year-over-year.
HIMX’s 1.09x forward EV/S is 73.5% lower than the 4.13x industry average Its forward P/S is 71.6% lower than the 3.97x industry average.
HIMX’s revenue is expected to grow 74% year-over-year to $1.54 billion in its fiscal 2021. Its EPS is estimated to grow 721.2% year-over-year to $2.48 in the current year. It surpassed the Street’s EPS estimates in three of the trailing four quarters. Over the past year, the stock has gained 48.8% in price to close yesterday’s trading session at $10.27.
HIMX’s POWR ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has an A grade for Value and Momentum and a B grade for Growth.
YPF Sociedad Anónima (YPF)
Based in Buenos Aires, Argentina, YPF, an energy company, operates in the oil and gas upstream and downstream business in Argentina. Its upstream operations include exploring, developing, and producing crude oil, natural gas, and liquefied petroleum gas.
YPF’s revenues increased 55.6% year-over-year to $3.62 billion for its fiscal third quarter ended September 30, 2021. The company’s adjusted EBITDA came in at $1.15 billion, up 194.4% year-over-year. Also, its net income was $237 million, compared to a $482 million loss in the year-ago period.
YPF’s 0.77x forward EV/S is 67.5% lower than the 2.37x industry average. Its forward P/S is also 79.9% lower than the 1.25x industry average.
Analysts expect YPF’s revenue to be $12.5 billion in its fiscal year 2021, representing a 33.4% year-over-year rise. In addition, the company’s EPS is expected to increase 239.3% year-over-year to $1.24 in the next year. It is trading 21.8% above its 52-week low of $3.25, which it hit on January 21, 2021, to close yesterday’s session at $3.96.
YPF’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system.
In addition, YPF has an A grade for Value and Momentum. Within the A-rated Foreign Oil & Gas industry, it is ranked #22 of 49 stocks. Also, click here to see the additional POWR Ratings for Stability, Growth, and Sentiment for YPF.
LexinFintech Holdings Ltd. (LX)
Shenzhen-based LX, through its subsidiaries, operates as an online consumption and consumer finance platform for young professionals in the People’s Republic of China. The company operates Fenqile.com, a consumption and consumer finance platform.
On November 11, 2021, Sunny Rui Sun, Lexin’s chief financial officer, said, “Quality growth is a key focus. At the same time, we will continue to support the overall profitability by strengthening cost management and operational efficiency.”
LX’s platform-based services income increased 26.3% year-over-year to $120.33 million for its fiscal third quarter, ended September 30, 2021. The company’s gross profit increased 54% from the same period last year to $233.81 million. And its net income came in at $90.09 million, up 68.4% year-over-year.
LX’s 0.82x forward EV/S is 72.7% lower than the 3.01x industry average. Its forward P/S is also 88.4% lower than the 3.29x industry average.
Analysts expect LX’s revenue to come in at $2.05 billion in its fiscal year 2022, representing a 7.6% year-over-year rise. The company’s EPS is expected to increase 225% year-over-year to $2.21 in the current year. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters. It has gained 3.9% in price since hitting its 52-week low of $3.82 on December 2, 2021, to close yesterday’s trading session at $3.97.
LX has an A grade for Value and a B grade for Momentum. Within the China industry, it is ranked #5 of 52 stocks. Also, click here to see the additional POWR Ratings for Growth, Stability, Sentiment, and Quality for LX.
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TEVA shares rose $0.02 (+0.25%) in premarket trading Friday. Year-to-date, TEVA has declined -15.44%, versus a 23.54% 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. More...
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