Blowing away earnings estimates these four stocks can add some much-needed growth to your portfolio. With years of growth still ahead, these stocks are great buys right now while they’re still undervalued.
After a couple of months of rallying after the deep and early losses to begin 2016, the recent rise in the market has begun to stall. Investors have begun to factor in first quarter earnings which were nothing to write home about this year. Year-over-year profits fell within the S&P 500 at their fastest pace since 2009. First quarter GDP growth was barely above zero this year at .5% and the ADP April Jobs Report provided its punkest reading in a year.
However, some companies, particularly in the small cap part of the market, have managed to produce more than solid results despite a horrid global demand picture and anemic domestic economic growth to begin the year. Today, we are going to look at some of the names that have been positively profiled on these pages before that have delivered the goods this quarter and still look undervalued.
Let’s start with a couple of construction plays which are in the Small Cap Gems portfolio,Tutor Perini (NYSE: TPC) and LGI Homes (NASDAQ: LGIH).
Both are bets that the housing market will continue to recover from its post-crisis lows. 2015 produced the highest level of housing starts since 2007, and this sector of the economy continues to move ahead in a two steps forward, one step back fashion.
Last week, Tutor Perini, which consistently disappointed with some key project cost overruns in 2015, posted up some of the best quarterly results this construction giant has provided shareholders in several years. Earnings came in at 31 cents a share, triple last year’s net and 12 cents a share above the consensus estimate. Earnings from its construction operations doubled from the same period a year ago. The company posted is strongest first quarter cash flow figures in eight years and its backlog, which already was impressive for a company with less than a $1 billion market capitalization, grew to $8.2 billion from $7.5 billion a year ago. Even with the big rally on Thursday after its earnings results, the stock is a good value at $19 a share given it should make $1.90 to $2.20 a share in earnings this year and its operations are obviously improving.
