3 Attractive ‘Growth at Fair Price’ Stocks to Buy Now

Growth stocks have been piled up in a brutal bear market. However, a handful of stocks are cheap enough and continue to grow at an impressive rate. 3 such stocks that investors should consider buying are Cigna (CI), Micron (MU), and Freeport McMoran (FCX).

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2 of the most popular schools of investing are value investing And development investment. Every school has its own merits and demerits. And, each approach has generated life-changing assets for successful followers.

The major risk for value investors is that they are buying stocks that are cheap because the market is often expecting a decline in the earning power of the business due to external forces. a prime example is Intel (INTC, Which posted impressive financials, yet its stock underperformed as its chip technology lagged behind competitors, indicating future weakness in revenue growth and pricing power.

And, we are passing on a major risk to growth investors. Valuations can be so extreme that a slowdown in growth or a change in economic or monetary conditions can cause huge losses in stocks.

However, these challenging market environments can create opportunities for great companies to buy at bargain prices. Therefore, those who want to take advantage of this dislocation should consider a hike in fair value (GARP) stocks.

GARP is a strategy that blends growth and value investing and eliminates the worst aspect of each. The GARP approach can reduce the downside risk of growth investing by filtering out overvalued companies. Overvalued stocks are most vulnerable to losses when market conditions worsen or a company reports poor earnings.

Here are 3 top GARP stocks that investors should consider.

Signa Corporation (CI,

CI is a multinational managed healthcare and insurance company with various subsidiaries that provide medical, dental, disability, life and accident insurance. It also offers Medicare and Medicaid plans and products. Most of its plans are offered through employers and large organizations. It operates through three segments – EverNorth, US Medical and International Markets.

Rising health care costs have meant that health insurers have also prospered. These stocks tend to outperform during periods of increased employment because it means more people will be enrolled in Cigna’s insurance plans. Thus, the company weakened as jobs were lost last year during the coronavirus crisis. However, it staged an impressive rally as the economy begins to recover.

it is clear from past income report Which showed a 9% increase in revenue compared to last year to $41.7 billion, well above expectations. Net income rose 323% to $4.1 billion. As a result, analysts increased their outlook for its full-year results. Currently, they are forecasting EPS of $20.26 and revenue of $169 billion, both figures representing growth of 9% from 2020.

CI’s earnings reflect its above-average growth potential. However, it has a price-to-earnings ratio of 11, which means it’s much cheaper than the S&P 500’s price-to-earnings ratio of 44.

The stock has an overall A rating, which equates to a strong buy. power rating, A-rated stocks have posted an average annual performance of 30.7%. In terms of its components, CI has B for value. Even if you look at its forward price to earnings ratio of 11.4, it is still more than 50% cheaper than the S&P 500.

To view other CI component grades including Growth, Sustainability, Sentiment, Speed, Quality and Industry, please click Here,

micron (mu,

MU is a leading manufacturer of DRAM and NAND memory chips. Memory chips are integral to all kinds of consumer technology such as smartphones, PCs, cameras and consoles. However, enterprise demand is exploding as they are increasingly used in cars and data centers as well. Additionally, there is a strong demand for futuristic technology like AI and autonomous driving which bodes well for the company’s growth prospects.

This dynamic is reflected in Micron’s recent earnings report, which showed slow growth in consumer tech, but continued growth in enterprise spending. During the next year, it is forecasting that demand for DRAM will grow in the teens and demand for NAND to grow by 30%.

Last quarter, MU’s data center business saw 60% revenue growth. MU’s automotive segment also offers growth, and currently accounts for 50% of the automotive memory market. Cars are becoming increasingly electronic, and many of these require memory.

In terms of value, the MU shines with a forward P/E of 5.9. The company also has an above-average 29% profit margin, which should remain in place given the company’s falling per-unit costs coupled with increased production and strong demand, which adds to the pricing power.

Has B rating as per MU power rating Which translates into a purchase. B-rated stocks posted an average annual performance of 21.1% which is well suited to the S&P 500’s annual gain of 8.0%. MU is ranked #12 out of #12 in the B-rated semiconductor and wireless chip group. Click Here To view other top stocks in the sector and to view MU’s complete power rating, click here.

Freeport-McMoran (FCX,

FCX is the world’s largest producer of copper with operations in North America, South America, Africa and Asia. Overall, copper accounts for 75% of the total revenue. Therefore, it should come as no surprise that the stock posted spectacular gains due to a 65% increase in copper prices over the past 2 years.

However, copper prices fell by nearly 30% due to the lockdown in China and concerns that the global economy could slow, resulting in a 35% drop for the FCX between mid-April and mid-May. However, FCX remains highly profitable and valuationally attractive at these prices.

The company’s P/E is 9.4, which is much cheaper than the market average despite better growth and cash flow figures. It is also returning cash to shareholders through its share buyback which is equivalent to 10% of the market cap. And, the company has strong, long-term growth prospects due to increased electrification, EV adoption and infrastructure spending.

Therefore, investors should watch out for the decline in FCX, especially if the decline is due to the Fed’s focus on reducing inflation. The PoWR rating on FCX ​​is also bullish as it is given a B rating which translates to a buy.

In terms of component grade, FCX holds a B for quality, being one of the largest and lowest cost producers of copper. It also has a B for growth due to its very low debt level and strong cash flow. Click Here To view the complete POWR rating of FCX.

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CI shares were trading at $246.74 per share on Thursday afternoon, down $0.36 (-0.15%). Year-on-year, the CI has gained 8.43%, compared to a gain of -22.74% in the benchmark S&P 500 index during the same period.

About the author: Jaimini Desai

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Jaimini Desai has been a financial writer and reporter for almost a decade. Their goal is to help readers identify risks and opportunities in the markets. He is the Chief Growth Strategist and Editor of StockNews.com power growth And $10. power stock under Newspaper. Learn more about Jaimini’s background, with links to her latest articles.


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