Earnings Expected To Reach A Record High In Q4
According to a recent report by Zack’s Investment Research, 484 members of the S&P 500 have reported Q4 earnings thus far. Total earnings from these companies have grown 7.4% in Q4 compared to 3.6% in Q3 while revenues have increased 4.9% in Q4 vs 2.1% in Q3.
Although 16 companies have yet to report, it is now safe to assume that Q4 earnings growth for S&P 500 listed members will reach its highest level in nearly two years. Furthermore, the absolute earnings total for these companies is expected to reach a record high: ~$289 billion. This compares to $285 billion in Q3 and a much lower $269 billion in Q4 '15.
With stocks at record highs and now earnings expected to follow suit, value investors may be having difficulty finding stocks trading at a reasonable price. Here are five undervalued stocks that are also expected to report earnings this week.
5 Attractive Stocks Reporting Earnings This Week
According to Yahoo finance, there are 475 companies still expected to report earnings this week (3/7 - 3/10) and only a few appear fundamentally undervalued. Finbox.io's intrinsic value data shows that only five of these companies have at least 15% or more upside: Ciena Corporation (NYSE:CIEN), Signet Jewelers (NYSE:SIG), AdvancePierre Foods (NYSE:APFH), Urban Outfitters (NasdaqGS:URBN) and United Natural Foods (NasdaqGS:UNFI).
Ciena is expected to report on Wednesday and seven separate cashflow analyses imply that the stock’s over 25% undervalued.
<img src='http://res.cloudinary.com/finbox/image/upload/v1488852897/1_-_CIEN_xu98lo.jpg' alt= ‘CIEN finbox.io fair value estimate’>
Signet Jewelers is expected to report earnings on Thursday and the stock is currently trading near its 52 week low. Finbox.io fair value data implies that shares are over 20% undervalued while Wall Street's consensus price target of $104 per share implies over 50% upside!
<img src='http://res.cloudinary.com/finbox/image/upload/v1488852897/2_-_SIG_tnicls.jpg' alt= ‘SIG finbox.io fair value estimate’>
AdvancePierre Foods is also expected to report earnings on Thursday while eight valuation models conclude that shares are approximately 17% undervalued.
<img src='http://res.cloudinary.com/finbox/image/upload/v1488852897/3_-_APFH_vpu0pt.jpg' alt= ‘APFH finbox.io fair value estimate’>
Six valuation analyses imply that Urban Outfitters is approximately 18% undervalued prior to reporting earnings (expected Tuesday). This figure is right in line with Wall Street.
<img src='http://res.cloudinary.com/finbox/image/upload/v1488852897/4_-_URBN_pfihwv.jpg' alt= ‘URBN finbox.io fair value estimate’>
United Natural Foods appears to be trading at an 18% discount to its intrinsic value before earnings (expected Wednesday).
<img src='http://res.cloudinary.com/finbox/image/upload/v1488852897/5_-_UNFI_fnsolw.jpg' alt= ‘UNFI finbox.io fair value estimate’>
These stocks all have strong fundamentals and could easily trade 15% higher based on their underlying earnings. Value investors may want to take a closer look at these names prior to earnings this week.
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photo credit: bdfwealth
Note this is not a buy or sell recommendation on any company mentioned.