Tech stocks are flying sky-high and many believe that we’re in a bubble, similar to the one experienced in 1999. As such, tech stocks have been receiving most of the attention lately from investors, as the sector has skyrocketed since March 23rd.
However, there are a number of undervalued stocks that are being ignored and that could see a significant rebound in the second half of 2020…
To find the best undervalued stocks, I focused on three metrics:
- I only looked at stocks that have a year-over-year quarterly EPS growth rate of over 25%.
- I narrowed down that list by considering stocks with a trailing 12-month price/earnings ratio of 15 or under and a Price/Earnings to Growth ratio of under one. This resulted in a list of 150 stocks.
- I then selected three stocks that had a Buy rating or higher in the exclusive StockNews POWR Ratings system.
Here are my favorite three undervalued stocks with high growth potential for the remainder of 2020:
BHP Group (BHP)
BHP is a leading global diversified miner supplying iron ore, copper, oil, gas, and metallurgic coal. The company, which has a market cap of $80.99 billion, operates as a Dual Listed Company with two parent companies, BHP Group Limited and BHP Group Plc. BHP operates as a single entity with the same management team and board.
The stock, which has a current trailing P/E of 13.64, saw quarterly year over year earnings growth of 29.3%. The company has affirmed its production and cost guidance for its fiscal year 2020, even with the ongoing pandemic. BHP has been focusing on lowering its debt and improving its cash flow, which should bode well during these turbulent times. The company is also investing in technology for its operations to make it more efficient. Also, BHP has benefited from rising iron and copper prices.
BHP is one of the top-rated stocks in our momentum-based POWR Ratings system. It has a Strong Buy rating and is the #1 ranked stock in the Industrial-Metals industry
Meritage Homes (MTH)
MTH is an American residential construction company that builds single-family and active adult housing communities throughout the western, southern, and southeastern parts of the United States. It has a presence in over 25 metro markets and is considered one of the industry’s leading energy-efficient homebuilders. The company operates as a holding company and has no independent assets or operations.
The stock has a trailing P/E of 11.02 and saw a whopping quarterly year over year earnings growth of…
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