While impressive third-quarter corporate profits, lower jobless claims and rising consumer spending pushed benchmarks to record highs last month, historically high inflation, Federal Reserve move to start reducing its bond purchases soon and continued supply chain disruptions have been fostering volatility in the markets lately.
Since high-priced stocks could suffer a pullback during an anticipated short-term market correction, value stocks have recently won the favor of investors. This is evidenced by the 3% returns of the Morningstar Value ETF iShares ETF (ILCV) over the past month.
Therefore, we think it might be rewarding to bet on the undervalued stocks of HCA Healthcare, Inc. (HCA), Laboratory Corporation of America Holdings (LH), KeyCorp (KEY) and International Paper Company (IP).
HCA Health, Inc. (HCA)
HCA is a Nashville, Tennessee-based health care services company that operates general and acute care hospitals and provides medical and surgical services, medical education, a medical resource center, and nursing programs. training. As of December 31, 2020, it operated 185 hospitals internationally.
On September 20, 2021, HCA and Steward Health Care, a private physician-owned health care network, signed a definitive agreement that transfers operations of the five Utah hospitals from Steward Health Care to HCA. Adding these facilities to HCA’s Mountain Division’s hospital network is expected to enable HCA to improve healthcare options and meet the growing demand for healthcare in the Utah region.
For its fiscal third quarter ended September 30, 2021, HCA’s revenue increased 14.8% year-over-year to $ 15.28 billion. The company’s pre-tax profit was $ 3.16 billion, up 219.5% from the same period a year earlier. Its net profit was $ 2.47 billion for the quarter, marking a 217.3% year-over-year improvement. Its EPS improved 259% year-on-year to $ 7. The company had $ 1.03 billion in cash and cash equivalents as of September 30, 2021.
Analysts expect HCA’s EPS to improve 51.7% year-on-year to $ 17.61 for the current year. A consensus revenue estimate of $ 59.01 billion for the current year represents an increase of 14.5% over the period of the previous year. It has beaten Street’s EPS estimates in each of the past four quarters. The stock’s EPS is expected to grow at a rate of 15.8% per year over the next five years.
In the past nine months, the stock has gained 39.3% of its price and closed yesterday’s trading session at $ 243.25.
In terms of EV / futures sales, HCA is currently trading at 1.88x which is 70% lower than the 6.28x industry average. In terms of forward EV / EBITDA, HCA is currently trading at 8.79x, which is 47.6% below the industry average of 16.78x.
HCA’s POWR ratings reflect this promising outlook. The stock has an overall A rating, which equates to a strong buy in our proprietary rating system. POWR scores are calculated by considering 118 separate factors, each factor being weighted to an optimal degree.
The stock has a B rating for value, stability, sentiment and quality. Click here to see additional notes for HCA (Growth and Momentum). Out of the 13 shares in the Medical – Hospitals sector, HCA is ranked n Â° 1.
Click here to view our health sector report for 2021
Corporation of America Holdings Laboratory (LH)
LH is an independent clinical laboratory company providing a range of clinical laboratory tests and procedures used by the medical profession for basic testing, patient diagnosis, and disease surveillance and treatment. It also provides drug development and a range of drug research and development (R&D) and market access services to biopharmaceutical and medical device companies around the world. LH is headquartered in Burlington, North Carolina
On November 18, 2021, LH agreed to acquire Toxikon, a contract research organization that provides the best in non-clinical testing services. This acquisition is expected to allow LH to create a strategic footprint by partnering with leading Boston-area pharmaceutical and biotech companies, bolster its strong non-clinical development portfolio, and facilitate entry into bidding. exemption from an investigative medical device (IDE).
For the third quarter, ended September 30, 2021, LH’s total revenue increased 4.3% year-over-year to $ 4.06 billion. The company had $ 2.04 billion in cash and cash equivalents as of September 30, 2021.
Analysts expect LH’s EPS to improve 13.8% year-on-year to $ 27.25 for the current year. A consensus estimate of revenue of $ 15.89 billion for the current year represents an increase of 13.7% over the period of the previous year. It has beaten consensus EPS estimates in each of the past four quarters.
LH has gained 18.4% in the past nine months and ended yesterday’s trading session at $ 287.49. LH’s EV / futures 2.02x is 67.9% lower than the industry average 6.28x. In terms of forward EV / EBITDA, LH is currently trading at 7.87x, which is 53.1% below the industry average of 16.78x.
LH’s POWR ratings reflect this promising outlook. The stock has an overall rating of B, which is equivalent to Buy in our proprietary rating system. LH has an A rating for sentiment and a B rating for value and quality. Click here to see additional notes for LH Growth, Momentum and Stability.
LH is ranked n Â° 5 out of 54 actions in the Medical – Diagnostics / Research sector.
Click here to view our health sector report for 2021
Headquartered in Cleveland, Ohio, KEY provides retail and commercial banking, leasing, investment management, and banking products and services to individuals, businesses and institutional clients. In addition, the company provides community development finance, securities underwriting and brokerage services. As of February 25, 2021, it operated through a network of approximately 1,000 branches and 1,400 ATMs internationally.
On July 16, 2021, KEY extended its brand relationship with Cardtronics, a leading provider of fully integrated ATM and financial kiosk products and services, and an operator in Kum & Go convenience stores to improve visibility of the KEY brand and double its ATM at no extra charge. access points in Colorado. KEY looks forward to scaling up immediately and offering convenient banking services.
For its fiscal third quarter, ended September 30, 2021, KEY’s total revenue increased 8% year-on-year to $ 1.82 billion. The company’s operating income was $ 643 million, indicating a 51.7% increase over the prior year period. While its net income increased 50.7% year-over-year to $ 645 million, its EPS increased 58.5% to $ 0.65.
Analysts expect the stock’s EPS to rise 100% year-on-year to $ 2.54 in the current year. A consensus revenue estimate of $ 7.14 billion for the current year represents an increase of 6.3% over the period of the previous year. It has beaten Street’s EPS estimates in each of the past four quarters. Analysts expect the stock’s EPS to grow at a rate of 11.4% per year over the next five years.
Over the past nine months, KEY has gained 21.5% and ended yesterday’s trading session at $ 23.67. In terms of a non-GAAP forward PEG, KEY is currently trading at 0.47x, which is 51.8% lower than the industry average at 0.97x. And, in terms of futures price / sales, KEY is currently trading at 3.09x, which is 11% lower than the industry average 3.47x.
KEY has a B rating for value in our proprietary rating system. Click here to see the additional notes for KEY (Quality, Momentum, Growth, Stability and Feeling). The stock is ranked # 3 out of 11 stocks in the central monetary banking industry.
International Paper Society (IP)
IP is an international paper and packaging company that produces packaging, pulp and paper products made from renewable fibers internationally. The Memphis company, Tenn., Operates in three segments: industrial packaging; Global cellulose fibers; and printing papers. It sells its products directly to end users and converters and through paper agents, resellers and distributors.
IP’s net sales for its fiscal third quarter, ended September 30, 2021, were $ 5.71 billion, an increase of 11.5% from the prior year period. Before income taxes and profits on equity, the company’s profits were $ 916 million, indicating a 224.8% increase over the prior year period. IP’s adjusted net income was $ 532 million, up 90% from the prior year period. And its adjusted EPS rose 90.1% year-on-year to $ 1.35.
A consensus EPS estimate of $ 4.25 for the current year represents a 51.8% increase over the previous year period. Its revenue is expected to improve 4.6% year-on-year to $ 21.53 billion, and its EPS is expected to grow at a rate of 25.8% per year over the next five years.
Over the past nine months, the stock has gained 1.5% of its price and closed yesterday’s trading session at $ 48.57. PI’s EV / Futures 1.19x is 35.5% lower than the industry average 1.85x. In terms of futures price / sales, IP is currently trading at 0.87x, which is 41.4% below the industry average 1.40x.
IP’s POWR ratings reflect its strong outlook. IP has an A rating for quality and a B rating for growth and value. In addition to the POWR ratings we just highlighted, here we can see the momentum, sentiment and stability of IP.
IP is ranked # 4 out of 11 stocks in the paper industry, rated A.
Click here to view our industrial sector report for 2021
HCA shares were trading at $ 238.47 per share on Friday afternoon, down $ 4.78 (-1.97%). Year-to-date, the HCA has gained 45.98%, compared to a 26.74% increase for the benchmark S&P 500 over the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a particular interest in researching market inefficiencies. She is passionate about educating investors so that they can be successful on the stock market. Following…