This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Jensen: Two Cheap Stocks with Growing Prospects

Earnings season kicks off in earnest this week with reports from key S&P 500 components like Citigroup (C), General Electric (GE), Microsoft (MSFT) and others.

This quarter is set to post the first sequential decline in overall S&P 500 earnings in three years. The profit picture has deteriorated significantly over the past four to six weeks. Analysts have ratcheted down estimates for the majority of companies in the energy, materials, industrial and tech sectors on concerns over European, slowing worldwide growth and a strong U.S. dollar. Many companies in these sectors have taken major hits to their share prices as a result. One strategy I am employing is to allocate funds to cheap equities whose earnings estimates have actually gone up over the past three months when the majority of stocks were being revised down. Here are two that I like.

United Stationers (USTR) engages in the wholesale distribution of business products in North America. Four reasons USTR offers solid value at less than $28 a share:
  • Consensus earnings estimates for 2012 have moved up 1% over the last three months. Consensus projections for 2013 have moved up 3% over the same time span and now stand at $3.09 a share. The company has beat estimates each of the last three quarters.
  • USTR is selling at less than 9x forward earnings, a discount to its five-year average (11.9), and the stock provides a 1.9% dividend yield.
  • The company managed to raise earnings at better than a 5% annual clip over the last five years despite the economy and the challenges in the office supply market. USTR sports a low five-year projected price/earnings/growth ratio (0.73), and it is expected to have sales growth of 3% to 4% for 2012 and 2013.
  • The five analysts covering the stock have price targets that range between $32 and $57 a share. The stock was above $34 a share earlier in the year.
NCR Corp. (NCR - Get Report) provides products and services that enable businesses to connect, interact, and transact with their customers worldwide including ATMs. Four reasons NCR is a bargain at less than $23 a share:
  • Consensus earnings estimates for 2013 have improved some 8% over the past three months. The company also has easily beaten earnings estimates each of the last six quarters.
  • NCR is selling for less than 8.5x forward earnings, a solid discount to its five-year average (13.9).
  • The median price target for the nine analysts covering the stock is $28 a share. RBC Capital initiated the shares with an Outperform rating in May and J.P. Morgan pushed its price target up to $30.50 from $28 in the second quarter.
  • NCR has good growth prospects. Analysts expect 6% to 9% annual sales growth over the next two years and the company has a five-year projected PEG of less than 1 (.64).

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,703.69 -127.07 -0.71%
S&P 500 2,060.38 -15.43 -0.74%
NASDAQ 4,772.0860 -33.2050 -0.69%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs