Prime Day is
‘s annual shopping extravaganza. Alas, it is already over for 2021. Of course, it has nothing to do with stocks. Instead, people are looking for a good deal on their next tablet or TV. Still, Prime Day’s annual occurrence can serve as a reminder to investors that there are many stocks that represent great bargains.
Baird automotive analyst Luke Junk gets credit for the Prime-stock-screen idea. Wednesday, he listed several stocks he covers that are “good buys.”
Junk’s top pick is
(ticker: APTV). He rates shares Buy and has a $170 price target for shares. He sees growth in the company’s safety and high-power electronics business. Aptiv products enable things like lane-keeping assist that are part of autonomous driving solutions. It also makes wire harnesses for the most advanced electric vehicles, including products for
(TSLA) and Lucid Motors.
Other auto-electrification names are “on sale,” including
(BWA). They have underperformed the
in June, providing an attractive entry point, according to Junk. He rates all three Buy. His price targets are $150, $295, and $59, respectively.
Junk’s thinking—looking for stocks that are underperforming in June that have strong analyst support and reasonable valuations—can be expanded beyond automotive stocks to any sector.
Barron’s found eight additional stocks in different sectors to add to Junk’s four. All eight stocks have underperformed the market in June, trade more cheaply than peers, and have analyst Buy-rating ratios—the number of Buy ratings divided by the number of analysts covering a stock—above 80%. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.
Within basic materials, stock in agricultural chemical provider
(FMC) looks attractive. It is down month to date, trades for about 14 times estimated 2022 earnings, and 84% of analysts covering the company rate shares Buy.
Cars are officially in the consumer discretionary industry classification. In the consumer nondiscretionary sector, healthcare stocks
(CI) screen well. Both trade for roughly 10 times estimated 2021 earnings, a discount to other nondiscretionary stocks, and analysts like the pair.
In the financial sector,
Capital One Financial
(MET) screen like the healthcare stocks. Both trade for less than 10 times estimated 2021 earnings and both have Buy-rating ratios above 80%.
A couple of industrial and energy stocks also came up in the screen.
(JEC) trades for about 19 times estimated 2022 earnings. That’s not cheap, but it’s a little less expensive than the 20 times multiple of the S&P 500. And 88% of analysts covering the company rate shares Buy. Oil refiner
(MPC) trades a little more cheaply, at 18 times estimated 2022 earnings, and 81% of analysts rate its shares Buy.
Finally, in technology,
(MU) stands out. It trade for about seven times estimated 2022 earnings, 86% of analysts rate its shares Buy, and it has underperformed the S&P 500 by about seven percentage points so far in June.
As always, this screen should be treated as just a starting point for stock shopping. This dozen, however, look attractive enough to be featured in an Amazon Prime Day deal.
Write to Al Root at [email protected]