Earn Large Profits By Buying These 3 Undervalued Stocks

Finding companies with the criteria you want isn’t always easy. You could spend hours searching ticker after ticker, only to find companies which aren’t worthy of your hard earned cash. An easier way to navigate through this is by using high quality stock screeners. Screening helps investors narrow down companies to invest in based on their ability to meet every criteria selected. Any company who misses even one of the criteria requirements will be filtered out.

This lets one easily choose ideal metrics. Screens are effective because they sift out bad stocks and only keep the cream of the crop in. It isn’t always easy to create an effective screen. Our Zacks Premium Screens have helped with this, bringing profits to many investors over time. Our predefined criteria are chosen carefully to capture special kinds of companies.

Today, we’ve dug up three growth stocksusing one of our premium screens known as “Undervalued Zacks #1 Rank Stocks”. Some of the metrics of this screen requires a stock to have trading volume above 100,000 shares per day, a forward PE under 20, and a Zacks Rank #1 (Strong Buy). One other screening criterion I’ve added is a PEG under one. When a company’s PEG is below this threshold, there is a chance that it is undervalued.

ARRIS International Plc- (NASDAQ:ARRS)

Arris International is an IP, video, and broadband technology company. It offers video infrastructure, delivery networks, home and business connectivity, devices, and other related products. Arris is a Zacks Rank #1 (Strong Buy) and it has a market cap of $5.3 billion. Earnings are forecasted to grow by 36.7% this year, and the company has a trailing ROE of 19.93%. ARRS shows strong growth potential, and it is promising to see that sales are projected to grow by 41.5% this year.

Arris stock looks cheap across quite a few valuation metrics. Shares trade at a forward PE of 10.81, and its price-to-book ratio is relatively tame at 1.84. Arris’ price to sales is just 0.78, and this exceeds the industry’s average price-to-sales of 1.53 by a notable margin. The corporation is not too leveraged, as it has debt-to-equity of just 0.77. ARRS has a PEG of just 0.62, so it may be undervalued relative to its long term growth rate.

Vishay Intertechnology Inc- (NYSE:VSH)

Vishay Intertechnology is a manufacturer of discrete passive electronic components and discrete active electronic components, such as resistors, capacitors, inductors, diodes, and transistors. Vishay stock is a Zacks Rank #1 (Strong Buy) and it gets a score of “A” for value in our Style Scores. The company’s earnings are projected to grow by 23.61%, and it has current cash flows growth of 8.43%. VSH has a good looking capital structure, and proof of this is its debt-to-capital of 16.62%.

Vishay has many valuation traits which make it appear to be undervalued. The company has an EV/EBITDA of 3.73, and this is way ahead of the industry’s EV/EBITDA of 14.21. Vishay’s price-to-book of 1.23 illustrates that the market cap is pretty close to the book value of the corporation’s assets, and this may suggest that the stock has room to move higher. Two other metrics which illustrate the stock’s value are the PEG and price-to-sales ratios, which come in at 0.86 and 0.84 respectively.

Berry Plastics Group Inc- (NYSE:BERY)

Berry Plastics manufactures and markets plastic packaging products and engineered materials. The company’s segments include Rigid Packaging, Engineered Materials, and Flexible Packaging. BERY stock is a Zacks Rank #1 (Strong Buy) and it has a “B” for both value and growth in our Style Scores. The company has a PEG of 0.98 and a price-to-sales of 0.81, so it does not look to expensive by any means. In fact, at these valuation levels, the stock looks like it may be selling at a bargain.

Berry looks like a solid investment candidate from a growth perspective. Its sales growth did taper off last year, but the company is looking to find growth once again as revenues are forecasted to grow by 33.79% this year. EPS is projected to grow by 29% in 2016, and this blows the industry’s expected earnings growth of 5.75% out of the water. The company is leveraged, but it has done well in improving its balance sheet in recent history. BERY beat our EPS consensus estimate by 36.67% last quarter, posting earnings of $0.82 per share.

Bottom Line

One magical screening ingredient which can’t be overlooked is a Zacks Rank #2 (Buy) or better. The rank helps to find companies which look like dependable earnings candidates. In addition to this great metric, the Zacks Premium Screens help you to add other criteria to find the most superior investment choices. While this article outlined potential candidates from one screen, the Zacks Premium service gives you access to the “Undervalued Zacks #1 Rank Stocks” and 45 other premium screens designed to give you superior investment returns.

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