As of June 28, the following stocks seem to be underestimated by the market, as their price-earnings ratios without non-recurring items (NRI) stand below 20 while their price-earnings to growth (PEG) ratios stand near or below 1.
Furthermore, Wall Street sell-side analysts have recommended positive ratings for them, which indicates that they expect higher share prices over the months ahead.
Employers Holdings Inc
The first company that matches the criteria is Employers Holdings Inc (EIG, Financial), a Reno, Nevada-based commercial property and casualty insurer.
As of June 28, the price-earnings ratio without NRI is 7, which is more compelling than the industry median of 11.72, while the PEG ratio of 0.74 is more compelling than the industry median of 1.17.
The stock had net earnings of $6.01 per diluted share for the trailing 12 months that ended in March 2021 and a five-year Ebitda growth rate of 9.50%.
On June 28, the closing price was $42.08 per share. The share price has increased by 39.57% over the past year for a market capitalization of $1.20 billion and a 52-week range of $28.66 to $43.82.
As of June, Wall Street sell-side analysts recommend a median rating of overweight and an average target price of $49.50 per share for the stock.
America's Car-Mart Inc
The second company that matches the criteria is America's Car-Mart Inc (CRMT, Financial), a Rogers, Arkansas-based seller of older model used vehicles through more than 150 dealerships in the south and central regions of the United States.
As of June 28, the price-earnings ratio without NRI is 9.44, which is more appealing than the industry median of 21.52, while the PEG ratio is 0.43, which has more appeal than the industry median of 2.35.
The stock had net earnings of $10.08 per diluted share for the trailing 12 months that ended in March 2021 and a five-year Ebitda growth rate of 22.10%.
The closing price on June 28 was $140.91 per share. The share price has increased by 60.36% over the past year, determining a market capitalization of $933.65 million and a 52-week range of $82.46 to $177.45.
As of June, Wall Street sell-side analysts recommend a median rating of overweight for the stock and have established an average target price of $174.67 per share.
BlueLinx Holdings Inc
The third company that matches the criteria is BlueLinx Holdings Inc (BXC, Financial), a Marietta, Georgia-based distributor of residential and commercial building products in the United States.
As of June 28, the price-earnings ratio without NRI is 3.20, which is more compelling than the industry median of 15.85, while the PEG ratio of 0.12 is also more compelling than the industry median of 1.46.
The stock had net earnings of $14.75 per diluted share for the trailing 12 months that ended in March 2021 and a five-year Ebitda growth rate of 27.40%.
The closing price on June 28 was $47.22 per share, increasing 451% over the past year for a market capitalization of $447.08 million and a 52-week range of $7.24 to $70.38.
As of June, Wall Street sell-side analysts recommend a median rating of buy with an average target price of $80 per share for the stock.
Disclosure: I have no positions in any securities mentioned.
