With the market continuing to generally rise above a wall of worries, the concept of bargain stocks to buy might seem sadly irrelevant. However, with so many opportunities available, it’s not possible to provide equal coverage to every company. In other words, some ideas will slip through the cracks.
For those who have procrastinated on this bull run, that’s good news. While Wall Street has certainly ogled heavily hyped names, there are ideas that haven’t quite grabbed the spotlight. Nevertheless, they deserve a closer look.
Sometimes, the item you buy at the local garage sale could be a huge hit. On that note, below are bargain stocks to buy that the Street overlooked.
New Fortress Energy (NFE)
Operating in the utilities (regulated gas) sector, New Fortress Energy (NASDAQ:NFE) conducts business as an integrated gas-to-power energy infrastructure enterprise. It provides energy and development services to end-users worldwide. The company is dividend into two main units, one focused on terminals and infrastructure development and the other on shipping. Priced at $28.86 on Tuesday, NFE is close to its 52-week low.
Ordinarily, that might not be a great signal to acquire security. However, NFE makes an intriguing case for bargain stocks to buy. For one thing, the underlying business is exceptionally relevant. Number two, while its price-to-sales (P/S) ratio of 2.35X isn’t exactly undervalued, in the fourth quarter of last year, this metric stood at 3.56X. So, on a relative basis, it appears to be a deal.
Best of all, covering experts project robust growth for the next two years. By the end of fiscal 2024, they anticipate sales of $3.07 billion, up 27.3% from last year’s haul of $2.41 billion. By 2025, the top line could rise to $4.09 billion, up 33% from projected 2024 sales.
Mosaic (MOS)
Falling under the basic materials segment, Mosaic (NYSE:MOS) is involved in agricultural inputs. Per its public profile, the company produces and markets concentrated phosphate and potash crop nutrients in North America and other international markets. As a major player in the global food supply chain, MOS commands significant relevance. Notably, experts rate shares a consensus moderate buy with a $36.64 price target.
Despite its relevance, though, MOS is down almost 18% since the start of the year. In the past 52 weeks, a similar magnitude of red ink materialized. Further, at $30.08, it’s very close to the trough of the trailing one-year period. However, despite these concerns, Mosaic could rank among the bargain stocks to buy.
Part of the issue is the low consensus target for the top line. In fiscal 2024, analysts anticipate revenue to land at $11.97 billion. That’s down 12.6% from last year’s print of $13.7 billion. However, the blue-sky target calls for a revenue haul of $13.69 billion. If so, that would make its modest P/S ratio of 0.76X seem reasonable. Plus, the company offers a forward dividend yield of 2.79%.
Dine Brands (DIN)
Working in the broad consumer cyclical industry, Dine Brands (NYSE:DIN) – as you might imagine from the name – focuses on restaurants. It’s a tricky narrative because of the challenges facing the consumer economy. However, what makes Dine attractive as one of the potential bargain stocks to buy is its ownership of compelling brands like Applebee’s and International House of Pancakes (IHOP).
Fundamentally, people need entertainment and it’s unreasonable to assume that they’ll eat at home indefinitely. Further, the revenge travel phenomenon has transitioned to a prioritization of travel. That should benefit Dine because of the relatively low-cost leadership in the industry. DIN is down almost 30% over the past 52 weeks. However, this could be a hidden gem to pick up.
For one thing, stock price volatility has largely stabilized since November 2023. Also, analysts anticipate as a consensus view modest growth at projected fiscal 2024 sales of $838.3 million. However, the blue-sky target calls for $847.73 million. That makes DIN’s P/S ratio of 0.83X more palatable. While you’re waiting, you can fill your plate with a forward dividend yield of 4.53%.
Polaris (PII)
Falling under the consumer cyclical ecosystem, Polaris (NYSE:PII) operates as a manufacturer of recreational vehicles. Per its public profile, the company conducts business through three segments: Off-Road, On-Road and Marine. Of course, Polaris will be a tricky idea among bargain stocks to buy. With so many challenges in the consumer economy, it may be difficult to justify acquiring PII.
That said, it’s not an impossibly silly idea. Yes, shares are down more than 15% over the past 52 weeks. At $88.08, it’s very close to its low point in the trailing year. Still, the technical argument may be that the worst of the volatility had subsided by the fall of 2023. Fundamentally, the wealth gap has expanded, meaning that Polaris may have a large addressable market.
For full disclosure, sales projections for fiscal 2024 calls for a 6.1% reduction in the top line compared to 2023. What’s more, the blue-sky revenue target for fiscal 2025 is $8.88 billion, which is still below 2023’s tally of $8.93 billion. However, analysts still rate PII a moderate buy with a $98.38 average price target.
Ulta Beauty (ULTA)
Another name in the consumer cyclical space, Ulta Beauty (NASDAQ:ULTA) is a retailer specializing in branded and private label beauty products. These include cosmetics, fragrance, haircare, skincare, bath and body products and myriad other categories. Further, the company offers beauty services, including hair, makeup, brown and skin services at its stores.
Over the long run, one of the big catalysts for ULTA should be social normalization. With people no longer worried about the SARS-CoV-2 virus, they’re free to engage with each other. That naturally incentives the beauty care industry. Moreover, the slowing April jobs report indicates that the labor market could become much more competitive (for white-collar positions). This too should indirectly bolster cosmetic sales.
For the current fiscal year, analysts anticipate revenue to hit $11.74 billion. If so, that would imply a 4.8% lift from last year’s haul of $11.98 billion. The following year should see sales of $12.47 billion, up 6.2%. Therefore, while the P/S ratio of 1.79X is somewhat elevated, it’s a relative discount to the 2.31X metric seen just a few months earlier.
SmartRent (SMRT)
Working in the technology field, SmartRent (NYSE:SMRT) falls under the software application category. Per its corporate profile, SmartRent is an enterprise real-estate tech firm, providing management software and applications to rental property owners and operators. As well, the company serves property managers, home builders, developers and residents. With the boom in real estate sales, SMRT could be a relevant idea for bargain stocks to buy.
It’s not the easiest case to make, admittedly. Since the January opener, SMRT fell almost 8%. Over the past 52 weeks, it’s down more than 20%. However, on Tuesday, it popped up 18%, possibly signaling a recovery play. Of course, SmartRent is dependent on the health of the broader economy. However, should interest rates decline, it could be an interesting idea.
Analysts believe that fiscal 2024 revenue will land at $273.38 million. That’s up 15.4% from last year’s result of $236.84 million. In the following year, they’re forecasting consensus sales to hit $325.99 million. If so, that would be a gain of 19.2% from projected 2024 revenue. It’s worth keeping on the radar.
Sturm Ruger (RGR)
A controversial enterprise, Sturm Ruger (NYSE:RGR) is a firearms manufacturer. Obviously, the industry has a poor reputation and it’s not getting any better. With shooting-related crimes soaring, this sector carries a product evangelism dilemma. That said, it would be grossly unfair to overlook the economics of the industry. With so many legally registered firearms in the U.S., Ruger simply enjoys a large addressable market.
But does that alone make it one of the bargain stocks to buy? Not really – not unless you consider the politics behind it. Should the Democrats win big in the upcoming election or if there is a rising consensus that they will win big, that could spark a panic. Cynically stated, people may rush to acquire firearms before Democrats attempt to implement draconian gun control measures.
Now, the one analyst that covers RGR believes fiscal 2024 sales could land at $561.23 million. That would be up a modest 3.2% from last year’s result of $543.77 million. Further, fiscal 2025 sales could improve to $583.17 million, up 3.9%.
However, these numbers could get a lot bigger if the political winds move in the right (or is that left?) direction.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.