Among the Zacks Rank #1 (Strong Buy) list there are quite a few stocks that trade at very affordable prices.
Of course, price alone is not a reason to buy a stock, but these companies’ valuations are attractive along with rising earnings estimate revisions.
Let’s take a look at three of these affordable stocks that investors may want to consider buying at the moment.
Arcos Dorados (ARCO)
Starting the list is Arcos Dorados which operates as a franchisee of McDonald’s (MCD) in Brazil and across many parts of Latin America and the Caribbean.
Arcos stock currently trades at $7 per share and 11.8X forward earnings which is nicely below the industry average of 21.2X. Even better, Arcos stock trades well below its decade high of 162.5X and at a 51% discount to the median of 24.2X.
Plus, earnings estimate revisions have started to trend higher over the last 30 days. Arcos earnings are now expected to dip -4% this year but rebound and jump 11% in FY24 at $0.73 per share.
Image Source: Zacks Investment Research
Universal Technical Institute (UTI)
Also looking like a bargain at the moment is Universal Technical Institute, a provider of technical education training in automotive, diesel, collision repair and refinishing, motorcycle, marine, and personal watercraft technologies.
Shares of UTI trade attractively relative to its past at $6 per share and 29.9X forward earnings. This is 72% below its decade-long high of 109.4X and a 30% discount to the median of 43.1X. While Universal Technical Institute’s stock trades above the industry average of 16.2X the rising earnings estimates offer further support to the company’s P/E valuation.
To that point, fiscal 2023 earnings estimates have soared 46% over the last 30 days with FY24 EPS estimates climbing 28%.
Image Source: Zacks Investment Research
Vaalco Energy (EGY)
Rounding out the list is Vaalco Energy, a Texas based independent energy company principally engaged in the acquisition, exploration, development, and production of crude oil and natural gas.
Vaalco Energy stock trades at $4 per share and just 1.9X forward earnings which is nicely beneath the industry average of 4.8X. Furthermore, Vaalco trades 97% below its decade high of 62X and at a 45% discount to the median of 3.5X.
Even better, Vaalco’s fiscal 2023 earnings estimates have climbed 19% over the last 30 days to what would be a very impressive $2.19 per share.
Image Source: Zacks Investment Research
Takeaway
The rising earnings estimate revisions reaffirm that these affordable stocks appear to be trading at discounts when considering their attractive P/E valuations. At their current levels, much of the risk looks priced in already and there could be plenty of upside ahead.
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Universal Technical Institute Inc (UTI) : Free Stock Analysis Report
Vaalco Energy Inc (EGY) : Free Stock Analysis Report
Arcos Dorados Holdings Inc. (ARCO) : Free Stock Analysis Report
McDonald’s Corporation (MCD) : Free Stock Analysis Report
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