The fast-paced macroeconomic recovery and solid corporate earnings have allowed stock markets to remain bullish this year. The Fed’s recent announcement that it is in no rush to…
hike the interest rates caused the benchmark indexes to close at record highs yesterday.
The S&P 500 index increased for seven straight months to hit 53 record closes so far this year, while the tech-heavy Nasdaq Composite has rallied for three consecutive months.
This trend is expected to continue, given the strong investor sentiment and favorable government policies. Thus, we think fundamentally strong stocks Genesco Inc. (GCO – Get Rating), SilverBow Resources, Inc. (SBOW – Get Rating), LSI Industries Inc. (LYTS – Get Rating), and Ultralife Corporation (ULBI – Get Rating), which look undervalued at their current price levels, could witness strong momentum in the near term.
Genesco Inc. (GCO – Get Rating)
GCO in Nashville, Tenn., is a retailer and wholesaler of footwear, apparel, and accessories. The company operates through four segments: Journeys Group; Schuh Group; Johnston & Murphy Group; and Licensed Brands.
In terms of forward Price/Sales, GCO is currently trading at 0.42x, which is 67.5% lower than the 1.29x industry average. GCO’s 0.63 forward EV/Sales multiple is 59% lower than the 1.55 industry average.
GCO’s net sales increased 92.9% year-over-year to $538.70 million in its fiscal first quarter ended May 1. Its operating income grew 110% from its year-ago value to $15.53 million, while its net earnings improved 106.6% year-over-year to $8.88 million over the period. The company’s EPS increased 106.3% year-over-year to $0.60.
A $2.31 billion consensus revenue estimate for the current year indicates a 29.5% improvement from the last year. In addition, the company’s EPS is expected to come in at $4.81 in the current year, indicating a 507.6% rise year-over-year. Furthermore, GCO surpassed the Street’s EPS estimates in each of the trailing four quarters.
GCO has gained 110.2% in price year-to-date. Over the past year, the stock has gained 231.6% to close yesterday’s trading session at $63.24. Also, GCO is currently trading above its 50-Day and 200-Day moving averages.
GCO has an overall A rating, which equates to Strong Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
GCO has an A grade for Momentum and Value, and B for Growth, Quality, and Sentiment. Of the 64 stocks in the A-rated Fashion & Luxury industry, GCO is ranked #2.
Beyond what we’ve stated above, we have also rated GCO for Stability. Click here to view all GCO ratings and additional details.
SilverBow Resources, Inc. (SBOW – Get Rating)
Houston, Tex.-based SBOW is an oil and gas company that acquires and develops assets in the Eagle Ford shale located in South Texas.
On August 13, SBOW announced definitive agreements to acquire oil and gas assets in the Eagle Ford shale. This acquisition should bolster SBOW’s position in the industry and improve its financials. As Sean Woolverton, the company’s Chief Executive Officer, commented, “Today’s announcement expands our gas portfolio in the Western Eagle Ford, while also adding oil acreage in three new counties. Each transaction is accretive to adjusted EBITDA and further reduces our pro forma leverage ratio via the assets’ incremental cash flow.”
SBOW’s 3.36 non-GAAP forward P/E multiple is 67.6% lower than the 10.36 industry average. In terms of forward Price/Cash Flow, SBOW is currently trading at 1.21x, which is 75.6% lower than the 4.97x industry average.
SBOW’s net sales increased 181.2% year-over-year to $69.86 million in its fiscal second quarter, ended June 30. Its operating income grew 112.6% from the year-ago value to $33.54 million. The company’s adjusted EBITDA improved 64.7% year-over-year to $42.79 million.
Analysts expect SBOW’s revenues to increase 70.3% year-over-year to $302 million in the current year. A $7.77 consensus EPS estimate for the current year represents a 46.9% rise from the last year. In addition, SBOW surpassed the Street’s EPS estimates in three of the trailing four quarters. The stock has gained 274.1% in price over the past year and 245.2% year-to-date.
The company’s strong fundamentals are…
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