Top 10 Undervalued Stocks To Watch For 2019

tags:IPHI,FRPT,GPC,SOXX,ATU,GHDX,PME,MNR,TKC,HAWK,

The big news over the weekend has been Facebook Inc.'s (NSDQ:FB) announcement to buy back�stock worth $6B, starting in Q1 2017. This was a first in the history of the company. While it can come across as a surprise for a growing company to announce a share repurchase offering, the recent drop in FB stock price could have forced the management into action. The FB stock price is down by over 12% from its October 24th close price of $133.28, all in a matter of 19 trading sessions. The recent downtrend has been in stark contrast to the 27% gain in the stock price through the year up to the October high. Does the management believe that the stock is undervalued at the current levels? What does it mean for investors? (See also: Is Facebook Inc. (FB) Stock A Big Short?)

Facebook's $6B Buyback And�What Does It Mean For Investors?

In an 8-K�filing with the SEC, dated November 18, Facebook disclosed that the BOD (Board of Directors) had authorized the company to repurchase nearly $6B worth of stock. Quoting from the SEC filing:

Top 10 Undervalued Stocks To Watch For 2019: Inphi Corporation(IPHI)

Advisors' Opinion:

• [By Paul Ausick]

  Inphi Corp. (NYSE: IPHI) fell about 8.6% Friday to post a new 52-week low of $32.36 after closing at $35.40 on Thursday. The 52-week high is $51.78. Volume of about 3 million was roughly five times the daily average of around 680,000 shares traded. The company had no specific news.

• [By Stephan Byrd]

  Inphi (NYSE:IPHI) issued its quarterly earnings results on Tuesday. The semiconductor company reported ($0.05) earnings per share for the quarter, hitting the Thomson Reuters’ consensus estimate of ($0.05), Bloomberg Earnings reports. The company had revenue of $60.10 million for the quarter, compared to analysts’ expectations of $59.82 million. Inphi had a positive return on equity of 5.39% and a negative net margin of 21.51%. The firm’s revenue for the quarter was down 35.8% on a year-over-year basis. During the same period in the prior year, the firm earned $0.44 earnings per share. Inphi updated its Q2 guidance to $0.12-$0.14 EPS.

• [By Ezra Schwarzbaum]

  Several other optics stocks stand to gain. In a Monday note, Bank of America Merrill Lynch analyst Vivek Arya also highlighlited the semiconductor space as one that could benefit from the news. Other stocks to watch include:

  Lumentum Holdings Inc (NASDAQ: LITE) Ciena Corporation (NYSE: CIEN) Coherent, Inc. (NASDAQ: COHR) II-VI, Inc. (NASDAQ: IIVI) Inphi Corporation (NYSE: IPHI) Skyworks Solutions Inc (NASDAQ: SWKS) Integrated Device Technology Inc (NASDAQ: IDTI) Qorvo Inc (NASDAQ: QRVO) Xilinx, Inc. (NASDAQ: XLNX) Broadcom Inc (NASDAQ: AVGO)

  Related Links:

• [By Timothy Green]

  Shares of Inphi Corp. (NYSE:IPHI) dropped on Wednesday following a mixed first-quarter report and a subsequent analyst downgrade. The company's revenue declined sharply and came in just short of analyst expectations. The stock was down about 9.5% at 2:45 p.m. EDT.

• [By ]

  There are some companies that have weak fundamentals and are regularly incurring losses but that are valued strongly by the market purely based on one metric: revenue growth. Inphi Corporation (NYSE:IPHI) is the perfect example of such a company that has enjoyed a very high valuation despite being a loss-making unit for a large period within the past five years. The company��s revenue growth was phenomenal and the profits were expected soon. In fact, the company did end up with a good profit in 2016 when the EV/Sales multiple shot up above 7.

Top 10 Undervalued Stocks To Watch For 2019: Freshpet, Inc.(FRPT)

Advisors' Opinion:

• [By Logan Wallace]

  Freshpet (NASDAQ:FRPT) – Research analysts at William Blair reduced their Q2 2018 earnings estimates for shares of Freshpet in a research note issued to investors on Monday, May 7th. William Blair analyst J. Andersen now expects that the company will post earnings per share of ($0.09) for the quarter, down from their prior forecast of ($0.04). William Blair also issued estimates for Freshpet’s Q4 2018 earnings at $0.10 EPS and FY2018 earnings at ($0.07) EPS.

• [By Lisa Levin]

  On Friday, the consumer staples shares surged 0.62 percent. Meanwhile, top gainers in the sector included Universal Corporation (NYSE: UVV), up 5 percent, and Freshpet, Inc. (NASDAQ: FRPT) up 4 percent.

• [By Peter Graham]

  A long term performance chart shows shares of Petmed Express and pet stock peer�Central Garden & Pet Co (NASDAQ: CENT) being outstanding performers over the last year or two while pet food stocks Blue Buffalo Pet Products Inc (NASDAQ: BUFF) and Freshpet Inc (NASDAQ: FRPT) have not yet lived up to investor expectations:

Top 10 Undervalued Stocks To Watch For 2019: Genuine Parts Company(GPC)

Advisors' Opinion:

• [By ]

  Genuine Parts Co. (NYSE: GPC)
  Ok, now I know I've definitely locked in the broken record award. GPC is better known to consumers as NAPA auto parts. And aftermarket auto parts is probably one of the most lucrative businesses in the United States for too many reasons to cover now.

• [By Shane Hupp]

  Bruderman Asset Management LLC lessened its stake in shares of Genuine Parts (NYSE:GPC) by 37.9% in the 1st quarter, Holdings Channel reports. The firm owned 4,091 shares of the specialty retailer’s stock after selling 2,495 shares during the quarter. Bruderman Asset Management LLC’s holdings in Genuine Parts were worth $368,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

• [By Joseph Griffin]

  Get a free copy of the Zacks research report on Genuine Parts (GPC)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By ]

  2. Price To Sales�
  Another useful metric is the price-to-sales ratio (P/S). P/S measures a company's market cap versus its annual revenue number. The idea is that the lower the number, the greater the implied value. For example, Snap, Inc. (Nasdaq: SNAP) trades at 26.9 times sales, an incredibly expensive number. However, aftermarket auto parts giant Genuine Parts (NYSE: GPC) trades at just 0.88 times sales -- 88 cents to every dollar of sales the company brings in. Often, the lower the number, the more inefficiently the market has mispriced the stock.

• [By Ethan Ryder]

  DekaBank Deutsche Girozentrale lessened its position in shares of Genuine Parts (NYSE:GPC) by 64.0% during the 1st quarter, according to the company in its most recent 13F filing with the SEC. The firm owned 11,092 shares of the specialty retailer’s stock after selling 19,733 shares during the quarter. DekaBank Deutsche Girozentrale’s holdings in Genuine Parts were worth $1,065,000 at the end of the most recent reporting period.

Top 10 Undervalued Stocks To Watch For 2019: iShares PHLX SOX Semiconductor Sector Index Fund(SOXX)

Advisors' Opinion:

• [By Joseph Griffin]

  Eaton Vance Management bought a new position in shares of iShares PHLX Semiconductor ETF (NASDAQ:SOXX) during the first quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The fund bought 1,125 shares of the exchange traded fund’s stock, valued at approximately $203,000.

• [By Jim Crumly]

  Semiconductor stocks rose on news of a deal with China to grant a reprieve to ZTE, with the�iShares PHLX Semiconductor ETF (NASDAQ:SOXX) moving up 1.2%.�Energy shares gained, too; the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT:XOP) closed up 1.3%.

• [By Joseph Griffin]

  Essex Financial Services Inc. bought a new position in iShares PHLX Semiconductor ETF (NASDAQ:SOXX) in the 1st quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The institutional investor bought 1,765 shares of the exchange traded fund’s stock, valued at approximately $318,000.

Top 10 Undervalued Stocks To Watch For 2019: Actuant Corporation(ATU)

Advisors' Opinion:

• [By Joseph Griffin]

  Get a free copy of the Zacks research report on Actuant (ATU)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Ethan Ryder]

  Eaton (NYSE: ETN) and Actuant (NYSE:ATU) are both industrial products companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Top 10 Undervalued Stocks To Watch For 2019: Genomic Health, Inc.(GHDX)

Advisors' Opinion:

• [By Shane Hupp]

  Genomic Health (NASDAQ: GHDX) and CareDx (NASDAQ:CDNA) are both small-cap medical companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

• [By Logan Wallace]

  Genomic Health (NASDAQ:GHDX) – Equities researchers at Piper Jaffray issued their Q2 2018 earnings per share (EPS) estimates for shares of Genomic Health in a research report issued on Wednesday, May 2nd. Piper Jaffray analyst W. Quirk expects that the medical research company will post earnings of $0.06 per share for the quarter. Piper Jaffray has a “Hold” rating and a $33.00 price target on the stock. Piper Jaffray also issued estimates for Genomic Health’s Q3 2018 earnings at $0.11 EPS, Q4 2018 earnings at $0.14 EPS, FY2018 earnings at $0.44 EPS, Q1 2019 earnings at $0.16 EPS, Q2 2019 earnings at $0.18 EPS, Q3 2019 earnings at $0.12 EPS, Q4 2019 earnings at $0.15 EPS and FY2019 earnings at $0.62 EPS.

• [By Brian Orelli]

  Cancer-test maker Genomic Health (NASDAQ:GHDX) started the year on a high note, posting double-digit revenue growth, and would have turned a profit if not for an $8.5 million�one-time charge for stopping development of the Oncotype SEQ Liquid Select test, which was announced on the last quarterly call.

Top 10 Undervalued Stocks To Watch For 2019: Pingtan Marine Enterprise Ltd.(PME)

Advisors' Opinion:

• [By Stephan Byrd]

  Pingtan Marine Enterprise (NASDAQ:PME) CEO Xinrong Zhuo purchased 50,000 shares of Pingtan Marine Enterprise stock in a transaction on Thursday, May 17th. The shares were acquired at an average price of $3.66 per share, with a total value of $183,000.00. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink.

Top 10 Undervalued Stocks To Watch For 2019: Monmouth Real Estate Investment Corporation(MNR)

Advisors' Opinion:

• [By Stephan Byrd]

  Get a free copy of the Zacks research report on Monmouth Real Estate Investment (MNR)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top 10 Undervalued Stocks To Watch For 2019: Turkcell Iletisim Hizmetleri AS(TKC)

Advisors' Opinion:

• [By Lisa Levin]

  Check out these big penny stock gainers and losers

  Losers Fluor Corporation (NYSE: FLR) fell 13.4 percent to $51.10 in pre-market trading after the company reported downbeat earnings for its first quarter and lowered its profit outlook for the year. Integrated Media Technology Limited (NASDAQ: IMTE) fell 9.8 percent to $28.97 in pre-market trading after surging 46.29 percent on Thursday. Gogo Inc. (NASDAQ: GOGO) shares fell 8.2 percent to $8.81 in pre-market trading after the company reported Q1 results and disclosed that it is withdrawing its FY18 outlook for adjusted EBITDA, airborne cash capex, airborne equipment inventory purchases and free cash flow. Sharing Economy International Inc. (NASDAQ: SEII) shares fell 7.5 percent to $3.98 in pre-market trading after climbing 22.16 percent on Thursday. Arista Networks, Inc. (NYSE: ANET) fell 7.4 percent to $248.00 in pre-market trading following first-quarter earnings. Web.com Group, Inc. (NASDAQ: WEB) fell 6.7 percent to $18.00 in pre-market trading after reporting Q1 results. Varex Imaging Corporation (NASDAQ: VREX) fell 5.2 percent to $34 in pre-market trading after reporting Q2 results. Turkcell Iletisim Hizmetleri A.S. (NYSE: TKC) shares fell 5.2 percent to $7.60 in pre-market trading after dropping 3.02 percent on Thursday. AMN Healthcare Services, Inc (NYSE: AMN) shares fell 4.7 percent to $61.70 in pre-market trading following Q1 earnings. HSBC Holdings plc (NYSE: HSEA) fell 4.6 percent to $25.15 in pre-market trading after reporting Q1 results. Stratasys Ltd. (NASDAQ: SSYS) shares fell 4 percent to $16.66 in pre-market trading after dropping 2.86 percent on Thursday. Melco Resorts & Entertainment Limited (NASDAQ: MLCO) fell 4 percent to $30.65 in pre-market trading. Century Aluminum Co (NASDAQ: CENX) fell 4 percent to $15.76 in pre-market trading following Q1 results. HSBC Holdings plc (NYSE: HSBC) shares fell 3.5 percent to $48.10 in pre-market tr
• [By Ethan Ryder]

  Turkcell (NYSE:TKC) shares reached a new 52-week high and low during trading on Friday . The stock traded as low as $7.59 and last traded at $7.74, with a volume of 559325 shares traded. The stock had previously closed at $8.02.

• [By Lisa Levin]

  Check out these big penny stock gainers and losers

  Losers Forward Pharma A/S (NASDAQ: FWP) fell 15.2 percent to $3.51 in pre-market trading after surging 88.18 percent on Tuesday. Pfenex Inc. (NASDAQ: PFNX) shares fell 15 percent to $5.85 in pre-market trading after the company announced an offering of common stock. Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) fell 17.6 percent to $47.75 in pre-market trading after the company reported downbeat results for its first quarter and issued a weak earnings forecast for the second quarter. Container Store Group, Inc. (NYSE: TCS) fell 13 percent to $7.15 in pre-market trading after reporting weaker-than-expected earnings for its fourth quarter. Ardelyx, Inc. (NASDAQ: ARDX) shares fell 12.1 percent to $4.00 in pre-market trading after reporting pricing of public offering of common stock. Boston Scientific Corporation (NYSE: BSX) shares fell 9.8 percent to $27.31 in pre-market trading. Turkcell Iletisim Hizmetleri A.S. (NYSE: TKC) fell 6.5 percent to $6.60 in pre-market trading. Target Corporation (NYSE: TGT) shares fell 5.8 percent to $71.02 in pre-market trading. Target reported weaker-than-expected earnings for its first quarter, while sales exceeded estimates. PBF Energy Inc. (NYSE: PBF) shares fell 5.7 percent to $42.42 in pre-market trading

Top 10 Undervalued Stocks To Watch For 2019: Blackhawk Network Holdings, Inc.(HAWK)

Advisors' Opinion:

• [By Max Byerly]

  Shares of Blackhawk Network Holdings (NASDAQ:HAWK) have been given a consensus rating of “Hold” by the eighteen ratings firms that are presently covering the firm, MarketBeat.com reports. One research analyst has rated the stock with a sell recommendation, fourteen have assigned a hold recommendation and two have given a buy recommendation to the company. The average twelve-month target price among brokers that have covered the stock in the last year is $44.75.

In Brazil, Pressure Mounts For Petrobras To Cap Fuel Prices Again

&l;p&g;&l;img class=&q;dam-image bloomberg size-large wp-image-42455143&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/42455143/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; A driver protests at a Petrobras gas station on Wednesday, May 23, 2018. Brazilian politicians, businesses and consumers are feeling the pinch on day five of a nationwide truckers&s; strike that has prompted fuel shortages and bottlenecks at ports in one of the world&s;s biggest commodity exporters. Photographer: Andre Coelho/Bloomberg

Fuel prices have doubled in Brazil. The capital city airport has no fuel left apparently to fill airplane tanks. And in the middle of all this, once again, is Petrobras. The company&s;s shares fell over 15% yesterday and are unlikely to recover today as strikes by delivery service providers continue on Friday.

Brazil is no stranger to striking truckers. The latest strike impacts everything from soybean to diesel fuel delivery to gas stations.&a;nbsp; The reason for it all: Brasilia raised the cost of diesel fuel by 10%. Truckers got ticked off. In their view, it&s;s more money to government, zero in return, lower margins on freight.

&q;If Petrobras returns (to subsidizing fuel) and if the government fails to approve tax cuts (PIS/Cofins tax) on fuel before the end of this year, then you will have a situation of general chaos in the country,&q; says Tiago Schietti, managing director of Horus Asset Management in Sao Paulo. The government agreed to put the price hike on hold for 15 days in hopes the truckers would return to the roads. They have not.

The strike is now into its fifth day.

&q;The driver&s;s don&s;t want any price increase,&q; says Daniela Casabona, an advisor with FB Wealth in Sao Paulo. &q;I think the strike will continue,&q; she says, adding that if it does, she suspects the currency to weaken to around R$3.8 to the dollar. It is currently at R$3.647.

&l;img class=&q;dam-image ap size-large wp-image-5eb7fa530a1e4a2da8db8d299735c123&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/5eb7fa530a1e4a2da8db8d299735c123/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; If Pedro Parente leaves Petrobras, stock tanks under $10. (AP Photo/Eraldo Peres)

&l;p class=&q;tweet_line&q;&g;If Pedro Parente leaves Petrobras, stock tanks under $10.&l;/p&g;

Brazil&s;s freight delivery service providers have grown accustomed to caps on diesel, the primary fuel for the nation&s;s trucking fleet. Subsidies have existed for years at Petrobras, keeping gasoline and diesel fuels relatively low. Brazil does not have the refining capacity of the United States, so despite having all of these oil fields offshore, Petrobras often has to import gasoline and diesel. Brazilians pay more for automotive fuel than American drivers.

&l;!--donotpaginate--&g;

Diesel fuel in Brazil today is now at its second&a;nbsp; highest rate in the nation&s;s history. Many filling stations have no fuel on hand due to delivery shutdowns and blockades.&l;/p&g;

A cut in the PIS/Confins social welfare and value added taxes on gasoline and diesel fuels would certainly help alleviate the 10% price increase. But this is an election year. If this keeps up, a new government may easily be forced into the old ways of Brasilia -- using Petrobras as a means to control inflation, and keep freight operators happy.

Speaking at a conference in her home state of Minas Gerais where she is expected to run for Senator, ex-president Dilma Rousseff said yesterday that &q;no country in the world can tolerate such outrageous price action&q; on fuel.

There are rumors in the market that Petrobras CEO Pedro Parente will jump ship if pressure mounts for the company to cap fuel prices. Since his tenure, Petrobras has moved to a market rate approach for fuel, helping the company&s;s stock go from $3 in the winter of 2015 to over $12.73 as of Thursday&s;s close.

&l;img class=&q;dam-image getty size-large wp-image-962104832&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/962104832/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; Drivers queue to pump fuel at a gas station in Brasilia, on May 24, 2018. Fearing fuel shortage caused by the truckers&s; national strike, Brasilia&s;s population rushed to the gas stations to fuel their cars and face long queues across town. (Photo by EVARISTO SA / AFP)

Brazil has been in this situation before. The locals tend to immediate assume the sky is falling. If the government manages to cut those taxes on fuel, it will be a positive and likely lead to the end of the stand-off. If that process takes too long, freight service providers are unlikely to be patient, hurting Petrobras and the Brazilian economy in the short term.

&q;I think there was an overreaction,&q; says Rachel Ziemba, a former emerging markets research chief at Roubini Global Economics in New York and now a senior fellow with the Center for New American Security. &q;I&s;d be concerned that they cannot come to agreement on price.&q;

A stronger dollar has has a negative impact on fuel prices in Brazil. Both independent drivers and corporate freight operators have stopped deliveries. Federal Police said they may prosecute companies that are not making scheduled deliveries to clients. Lockouts are considered crimes in Brazil.

&l;!--donotpaginate--&g;

The Brazilian Truckers Association, Abcam, said they will stop their protest once the tax cuts are made official and enacted into law.&l;/p&g;

About to Buy Bitcoin? Look at These 3 Companies First

Bitcoin was a joyride for early investors, as the cryptocurrency surged from less than $100 earlier in the decade to more than $19,000 last December. However, the digital coin has fallen to around $7,500 since then as the hype and speculation around it seem to have peaked. At the same time, Google searches for "bitcoin" have also dropped sharply since December.

While crypto fans may be unfazed, the majority of the market seems to have moved on. If you're considering buying bitcoin for the high upside potential it exhibited last year, you may be better off with this group of stocks, which all have the potential to deliver big returns. Keep reading to see why our panel of Motley Fool investors recommend�PayPal�(NASDAQ:PYPL),�Yelp�(NYSE:YELP), and Trivago�(NASDAQ:TRVG).��

Image source: Getty Images.

The pioneer in online payments

Leo Sun (PayPal): PayPal, which was spun off of eBay (NASDAQ:EBAY) in 2015, popularized digital payments long before bitcoin became relevant. Unlike its industry peer Square (NYSE:SQ), PayPal refuses to add bitcoin transactions to its platform, saying that volatile prices make bitcoin unsuitable for payments.

PayPal's core business is rapidly growing. It's posted double-digit sales growth every quarter since its spinoff, and analysts expect revenue to rise 17% this year (despite eBay's decision to gradually part ways with PayPal by 2023). Its earnings are expected to rise 23% this year.

Last quarter, PayPal's revenue rose 24% annually, while its total payments volume (TPV) rose 27% to $132 billion on a constant currency basis -- supported by 30% growth in merchant services TPV, 50% growth in peer-to-peer payments (thanks to its subsidiary Venmo), and 52% growth in mobile payment volumes.

Its total number of transactions climbed 25% to 2.2 billion, as its total number of transactions per active account rose 8% to 34.7 over the past 12 months. Its new active accounts rose 35% annually. Those robust growth figures indicate that PayPal continues to gain steam as an international digital payments platform -- which is now available in 202 countries and 25 currencies. PayPal also recently acquired Square's rival iZettle for $2.2 billion to expand its reach into mobile point-of-sale systems.

PayPal's stock isn't cheap at 35 times this year's earnings. But it's arguably a smarter play on a cashless and cardless future than bitcoin.

Take advantage of Yelp's pullback

Steve Symington (Yelp): Bitcoin investors are all too familiar with unexpected pullbacks. So if you're considering buying some of the popular cryptocurrency, you might appreciate taking a look at Yelp instead. When Yelp announced strong quarterly results�earlier this month -- posting higher-than-expected revenue and narrowing its per-share losses -- it seemed strange at first to see shares of the local business-review website fall almost 8% in response.

But more important to Wall Street was the underlying source of that quarterly beat. While Yelp's impressive results were driven by accelerating advertising revenue growth -- ad sales climbed 20% year over year to $214 million, comprising the vast majority of its total revenue -- that acceleration came as a result of the company's adoption of non-term advertising contracts. Put simply, Wall Street wants to see whether newer advertisers will stick around, especially those that are trying Yelp for the first time precisely because of those more flexible contracts.

To be fair, Yelp's co-founder and CEO Jeremy Stoppelman admitted during this quarter's call that the company is going "through this change with a bit of caution about what we may see in the coming months." But Yelp management also insisted the move is a concerted effort, preceded by nearly two years of testing, followed by a broader ramp up in the new contracts that began in the third quarter of 2017.

To that end, Yelp was comfortable enough with the sustainability of this shift to modestly increase its full-year guidance ranges for both revenue and adjusted EBITDA. Alas, the market would have none of it.

But if Yelp can prove to investors that its accelerated ad growth is good for more than just a single quarter's outperformance, I think the stock will soar.

A promising turnaround candidate

Jeremy Bowman (Trivago):�Like bitcoin, Trivago shares have also tumbled in recent months. After the stock surged following its IPO in December 2016 as it was spun off from�Expedia, it's now given up more than 80% since last July.�

That decline has come largely due to Booking Holdings' decision to scale back on advertising on the platform, focusing on profitability rather than market share, which had the effect of making Trivago's revenue decline 3% year over year in the first quarter as comps were unfavorable, with Booking still on the platform a year ago.�

The hotel-booking specialist is now projecting flat revenue for the year. However, the company should return to growth as it laps the issues with Booking Holdings, and it expects revenue to increase in the second half of the year.�

The online travel industry is still growing steadily, and Allied Market Research projects it will grow at a compound annual rate of 11.1% from 2016 to 2022. Trivago's exclusive focus on hotels should give it an advantage over more-diversified platforms, and as consumer awareness of the platform improves, it should outgrow the overall industry.

At this point, the stock looks oversold, as the current weakness is temporary. The stock could easily double from here once revenue growth accelerates again.

Vista Outdoor Is A Bargain Investment, Shareholders Act Now

Investment Thesis

Shareholders have had a horrid time with Vista Outdoor (VSTO), and understandably no longer have the enthusiasm, patience or willingness to look at Vista with a fresh pair of eyes. However, I am taking the bold view that Vista offers investors a great bargain at today's price.

Recent Developments

I don't wish to regurgitate all the history that got this company here trading near all-time lows. That is dull for you to read, and arguably duller for me to regurgitate it. I'm highly confident that you can read it right here on SA much better described than I can put it down for you.

In investing, we all look at totally different things to derive an understanding of whether a business is indeed trading at a discount to fair value or not. Personally, I have a preference for focusing on companies that have run into non-permanent troubles, looking to right themselves by undergoing asset sales in an attempt to de-lever their positions - this, together with the correct price, nicely describes Vista today.

Overleveraged

In the business world, leverage gets a bad reputation. However, a certain amount of leverage works wonders. In Vista��s case, the question is, just how much is a certain amount of leverage? I don't know. What I do know, is that Vista is presently leveraged at 5.4X and that is way too much.

Realistically, Vista needs to get its leverage below 3.5X or better. Given that Vista finished YE 2018 with a net debt of roughly $900 million, Vista needs to get its net debt position to at least $600 million, and preferably better. Having said that, management did highlight its ambition to get Vista down to 2X-3X leverage - which I trust, most investors would be reasonably satisfied with.

Now, how does management intend to bring down its debt? Through selling some of the assets, for instance, Vista's Sports Protection brands (e.g. Bell, Giro, and Blackburn), Jimmy Styks paddle boards, and Savage and Stevens firearms. Furthermore, expected to complete within the next few quarters, is Vista's eyewear business consisting of the Boll茅, Serengeti, and C茅b茅 brands, which is expected to bring in roughly $158 million.

Further, this might sound obvious, but these asset sales will be foregone opportunities. Thus, going forward, Vista will be a smaller company, with less revenue. However, management��s ambitions are that after Vista��s fiscal 2019, going into fiscal 2020 (the next calendar year) that Vista will have better EBITDA margins, with roughly 10% EBITDA margins versus 7%, which it expects to finish fiscal 2019 with.

Business Headwinds

Vista is a cyclical business. Management said that its business is facing tough headwinds, with economic contractions, which have lasted roughly 15 months and that investors should not expect them to ease up in the next 6-9 months. Reading in between the lines, management alludes to the fact, that this contraction could actually last another further year. However, that Vista expects to come out of this period significantly leaner, in part through its efforts to bring down procurement costs and optimise its G&A structure.

Additionally, management highlights that customers had been stockpiling inventories and that it will take time for this inventory level to come down. Moreover, further compounding Vista's profit margins is the fact that commodity prices have increased and that Vista has not been able to fully offset the increase in raw materials with higher average sales prices - CEO Metz went so far as to highlight that Vista operates in a highly 'rational environment', with few options at its disposal.

Guidance

Investors look at a wide range of metrics. I like to look at free cash flow margin (FCF/Rev expressed as a %). I find that free cash flow margins above 5% often approach a return on tangible invested capital of 15% (very approximately). With higher FCF margins, describing better the business. Thus, as the table below shows, Vista has normalized FCF margins of 5%-6%, implying a reasonably high-quality business.

Source: Author's calculations, morningstar.com

Vista guides fiscal 2019 free cash flow of $55 million to $85 million. Let's assume that it ends up at roughly $60 million; this would make Vista's present market cap on a 14X multiple to free cash flow. However, this is during a trough year and as discussed above, management seeks to delever its balance sheet by my own estimate to a ballpark of $550 million. Consequently, this factor alone should bring down its interest repayments from approximately $50 million down to roughly $40 million or even slightly lower, and closer to the $30 million it previously had during fiscal 2015-2016.

Valuation

Source: Author's calculations, morningstar.com

The table above shows some of Vista's peers. Obviously, its closest publicly traded companies are Sturm Ruger (RGR) and American Outdoor (AOBC), with Dick's Sporting (DKS) a distance competitor.

As we can see in the table, Sturm Ruger's P/S ratio is close to its own historical average. On the other hand, American Outdoor is trading at a small discount. However, if we look over Sturm Ruger's financials, in particular, we can see a company which has little control over its financials. As for American Outdoor, it is a far superior company compared with Sturm Ruger, as represented by great financials and strong returns on capital. In fact, objectively speaking, American Outdoor has significantly better returns on tangible invested capital than Vista too.

However, the reason why I'm bullish Vista is that its valuation is simply cheap. Its present P/S ratio stands at 0.4X and its P/operating cash flow is roughly 3-4 times. However, looking back, its P/S ratio used to be around 1X and its P/Cash Flow around 10-13X, once again emphasizing the cheapness of its stock at the moment.

Insider Purchases

Fiscal 2018 proxy form is not out yet. However, if we compare fiscal 2016 with fiscal 2017, we can see that insiders, as a group, have increased their ownership in the company by 15%. Also, we can see that throughout fiscal 2018 many insiders have bought the company's stock in the open market. Finally, subsequent to year-end, now in May 2018, in the days after earnings were released and several insiders have bought into the stock.

Insiders such as CEO Metz, CFO Lopez and a couple of directors bought the stock. In fact, looking in more detail at these insiders, we can see that some of these insiders have only sold stock in the companies they worked at; thus buying at Vista marks a strong reversal from their usual stance.

Takeaway

Vista appears to be making the correct announcements and attempting to move in the correct direction. Given that management is willing to put its money where their mouth is, I argue that shareholders might benefit also.

Disclaimer: Please do your own due diligence to reach your own conclusions.

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Eagle Materials Inc (EXP) Files 10-K for the Fiscal Year Ended on March 31, 2018

Eagle Materials Inc (NYSE:EXP) files its latest 10-K with SEC for the fiscal year ended on March 31, 2018. Eagle Materials Inc supplies building products which are used in residential, industrial, commercial, and infrastructure construction. Its segments include Cement, Concrete and Aggregates, Gypsum Wallboard, Recycled Paperboard, and Oil and Gas Proppants. Eagle Materials Inc has a market cap of $5.26 billion; its shares were traded at around $108.93 with a P/E ratio of 20.65 and P/S ratio of 3.85. The dividend yield of Eagle Materials Inc stocks is 0.37%. Eagle Materials Inc had annual average EBITDA growth of 7.00% over the past ten years.

For the last quarter Eagle Materials Inc reported a revenue of $284.7 million, compared with the revenue of $278.7 million during the same period a year ago. For the latest fiscal year the company reported a revenue of $1.4 billion, an increase of 14.5% from last year. For the last five years Eagle Materials Inc had an average revenue growth rate of 14.7% a year.

The reported diluted earnings per share was $5.28 for the year, an increase of 28.8% from previous year. Over the last five years Eagle Materials Inc had an EPS growth rate of 28% a year. The Eagle Materials Inc had a decent operating margin of 21.46%, compared with the operating margin of 23.14% a year before. The 10-year historical median operating margin of Eagle Materials Inc is 14.68%. The profitability rank of the company is 8 (out of 10).

At the end of the fiscal year, Eagle Materials Inc has the cash and cash equivalents of $9.32 million, compared with $6.56 million in the previous year. The long term debt was $620.9 million, compared with $605.3 million in the previous year. Eagle Materials Inc has a financial strength rank of 6 (out of 10).

At the current stock price of $108.93, Eagle Materials Inc is traded at 22.5% premium to its historical median P/S valuation band of $88.92. The P/S ratio of the stock is 3.85, while the historical median P/S ratio is 3.13. The stock gained 10.08% during the past 12 months.

Directors and Officers Recent Trades:

EVP & General Counsel James H Graass sold 10,000 shares of EXP stock on 05/15/2018 at the average price of $110. The price of the stock has decreased by 0.97% since.

For the complete 20-year historical financial data of EXP, click here.

Harley-Davidson (HOG) Receives $50.47 Consensus Target Price from Analysts

Shares of Harley-Davidson (NYSE:HOG) have been assigned a consensus rating of “Hold” from the twenty-two research firms that are presently covering the firm, MarketBeat reports. Three analysts have rated the stock with a sell recommendation, eleven have assigned a hold recommendation and six have issued a buy recommendation on the company. The average 12 month target price among brokers that have issued a report on the stock in the last year is $50.47.

Several brokerages have recently commented on HOG. ValuEngine lowered shares of Harley-Davidson from a “sell” rating to a “strong sell” rating in a report on Wednesday, May 2nd. Longbow Research raised shares of Harley-Davidson from an “underperform” rating to a “neutral” rating in a research note on Thursday, March 29th. Citigroup cut their target price on shares of Harley-Davidson from $57.00 to $55.00 and set a “buy” rating on the stock in a research note on Tuesday, February 6th. Stifel Nicolaus cut their target price on shares of Harley-Davidson from $49.00 to $45.00 and set a “hold” rating on the stock in a research note on Friday, April 13th. Finally, Sanford C. Bernstein cut their target price on shares of Harley-Davidson from $52.00 to $45.00 and set a “market perform” rating on the stock in a research note on Monday, March 26th.

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Large investors have recently made changes to their positions in the business. W.G. Shaheen & Associates DBA Whitney & Co purchased a new stake in shares of Harley-Davidson in the 1st quarter valued at approximately $103,000. Banco de Sabadell S.A purchased a new stake in shares of Harley-Davidson in the 1st quarter valued at approximately $127,000. Ballew Advisors Inc purchased a new stake in shares of Harley-Davidson in the 1st quarter valued at approximately $134,000. Rampart Investment Management Company LLC increased its position in shares of Harley-Davidson by 114.0% in the 1st quarter. Rampart Investment Management Company LLC now owns 4,932 shares of the company’s stock valued at $211,000 after purchasing an additional 2,627 shares during the last quarter. Finally, IFG Advisory LLC purchased a new stake in shares of Harley-Davidson in the 4th quarter valued at approximately $239,000. 95.87% of the stock is currently owned by institutional investors.

Shares of Harley-Davidson traded down $0.04, hitting $42.53, during trading hours on Friday, MarketBeat reports. The company had a trading volume of 87,057 shares, compared to its average volume of 2,760,973. The company has a debt-to-equity ratio of 2.06, a quick ratio of 0.96 and a current ratio of 1.11. Harley-Davidson has a fifty-two week low of $41.08 and a fifty-two week high of $41.44. The firm has a market cap of $7.04 billion, a P/E ratio of 12.15, a P/E/G ratio of 1.38 and a beta of 0.89.

Harley-Davidson (NYSE:HOG) last issued its quarterly earnings data on Tuesday, April 24th. The company reported $1.24 EPS for the quarter, topping the consensus estimate of $1.08 by $0.16. Harley-Davidson had a net margin of 10.31% and a return on equity of 32.45%. The firm had revenue of $1.54 billion for the quarter, compared to analyst estimates of $1.24 billion. During the same period in the prior year, the business posted $1.05 EPS. The business’s revenue for the quarter was up 2.7% compared to the same quarter last year. research analysts predict that Harley-Davidson will post 3.85 EPS for the current fiscal year.

Harley-Davidson announced that its Board of Directors has approved a share buyback plan on Monday, February 5th that permits the company to repurchase 15,000,000 outstanding shares. This repurchase authorization permits the company to repurchase shares of its stock through open market purchases. Shares repurchase plans are generally an indication that the company’s management believes its stock is undervalued.

The company also recently disclosed a quarterly dividend, which will be paid on Friday, June 15th. Shareholders of record on Thursday, May 31st will be given a $0.37 dividend. This represents a $1.48 dividend on an annualized basis and a dividend yield of 3.48%. The ex-dividend date is Wednesday, May 30th. Harley-Davidson’s dividend payout ratio is presently 42.29%.

About Harley-Davidson

Harley-Davidson, Inc primarily manufactures and sells cruiser and touring motorcycles. The company operates in two segments, Motorcycles & Related Products, and Financial Services. The Motorcycles & Related Products segment designs, manufactures, and sells at wholesale on-road Harley-Davidson motorcycles, as well as motorcycle parts, accessories, general merchandise, and related services.

Columbus Circle Investors Has $23.16 Million Stake in Illumina (ILMN)

Columbus Circle Investors lowered its holdings in shares of Illumina (NASDAQ:ILMN) by 6.2% in the 1st quarter, according to its most recent disclosure with the SEC. The fund owned 97,963 shares of the life sciences company’s stock after selling 6,496 shares during the period. Columbus Circle Investors’ holdings in Illumina were worth $23,160,000 as of its most recent SEC filing.

Other hedge funds have also added to or reduced their stakes in the company. Financial Gravity Companies Inc. acquired a new stake in shares of Illumina during the fourth quarter worth $106,000. Harvest Fund Management Co. Ltd acquired a new stake in shares of Illumina during the first quarter worth $113,000. SeaCrest Wealth Management LLC acquired a new stake in shares of Illumina during the fourth quarter worth $154,000. Captrust Financial Advisors acquired a new stake in shares of Illumina during the fourth quarter worth $165,000. Finally, Mitsubishi UFJ Securities Holdings Co. Ltd. increased its position in shares of Illumina by 113.9% during the fourth quarter. Mitsubishi UFJ Securities Holdings Co. Ltd. now owns 770 shares of the life sciences company’s stock worth $168,000 after buying an additional 410 shares during the period. 91.59% of the stock is owned by hedge funds and other institutional investors.

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Several equities research analysts have recently weighed in on ILMN shares. Cowen increased their price objective on shares of Illumina from $250.00 to $275.00 and gave the stock an “outperform” rating in a research report on Monday, January 22nd. First Analysis upgraded shares of Illumina from an “equal weight” rating to an “overweight” rating and set a $277.00 price objective for the company in a research report on Wednesday, January 31st. Canaccord Genuity reiterated a “buy” rating and set a $265.00 price objective (up from $255.00) on shares of Illumina in a research report on Wednesday, January 31st. Leerink Swann increased their price objective on shares of Illumina from $250.00 to $276.00 and gave the stock an “outperform” rating in a research report on Wednesday, January 31st. Finally, Morgan Stanley increased their price objective on shares of Illumina from $145.00 to $157.00 and gave the stock an “underweight” rating in a research report on Wednesday, January 31st. One equities research analyst has rated the stock with a sell rating, five have issued a hold rating, sixteen have issued a buy rating and one has assigned a strong buy rating to the stock. The stock has an average rating of “Buy” and an average price target of $251.14.

In other news, CEO Francis A. Desouza sold 2,100 shares of Illumina stock in a transaction dated Monday, May 14th. The shares were sold at an average price of $268.63, for a total transaction of $564,123.00. Following the completion of the transaction, the chief executive officer now directly owns 87,371 shares in the company, valued at $23,470,471.73. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Robert S. Epstein sold 250 shares of Illumina stock in a transaction dated Wednesday, February 28th. The shares were sold at an average price of $231.25, for a total transaction of $57,812.50. Following the transaction, the director now owns 7,088 shares of the company’s stock, valued at $1,639,100. The disclosure for this sale can be found here. Insiders sold 16,614 shares of company stock valued at $4,018,424 over the last 90 days. Corporate insiders own 0.54% of the company’s stock.

NASDAQ:ILMN opened at $268.45 on Friday. The company has a quick ratio of 2.41, a current ratio of 2.71 and a debt-to-equity ratio of 0.23. The firm has a market capitalization of $38.77 billion, a price-to-earnings ratio of 67.11, a P/E/G ratio of 2.71 and a beta of 0.86. Illumina has a 12 month low of $264.12 and a 12 month high of $267.94.

Illumina (NASDAQ:ILMN) last posted its quarterly earnings results on Tuesday, April 24th. The life sciences company reported $1.45 EPS for the quarter, topping analysts’ consensus estimates of $1.02 by $0.43. The business had revenue of $782.00 million during the quarter, compared to analysts’ expectations of $744.30 million. Illumina had a net margin of 19.31% and a return on equity of 24.93%. The business’s quarterly revenue was up 30.8% on a year-over-year basis. During the same period last year, the company posted $0.64 earnings per share. research analysts anticipate that Illumina will post 4.87 EPS for the current year.

About Illumina

Illumina, Inc provides sequencing and array-based solutions for genetic analysis. The company operates in two segments, Core Illumina and Consolidated VIEs. It offers sequencing by synthesis technology that provides researchers with various applications and the ability to sequence mammalian genomes; and arrays for a range of deoxyribonucleic acid and RNA analysis applications, including single nucleotide polymorphism genotyping, copy number variations analysis, gene expression analysis, and methylation analysis, as well as allow the detection of known genetic markers on a single array.

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