3 Undervalued Cyclical Stocks To Snatch Up In Q2 2021

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The global economy suffered a major blow from the COVID-19 pandemic, but it is now in the recovery stage. Governmental fiscal stimulus is driving consumer spending, restaurants and hotel chains are reopening, and manufacturing activities are on the rise.

Consequently, investors are rotating away from pricey pandemic winners to undervalued stocks from industries that are positioned to benefit from the economic recovery. These stocks are known as cyclical stocks and they typically perform well during economic growth. Investors’ rotation to value stocks is evidenced by the SPDR Portfolio S&P 500 Value ETF’s (SPYV) 13.3% returns year-to-date versus the SPDR Portfolio S&P 500 Growth ETF’s (SPYG) 8.9% returns.

As such, we think it’s wise now to bet on undervalued cyclical stocks Kingfisher plc (KGFHY), Lumber Liquidators Holdings, Inc. (LL), and Haverty Furniture Companies, Inc. (HVT) given their strong growth prospects.

Kingfisher plc (KGFHY)

Headquartered in London, U.K., KGFHY is a home improvement company with 1,380 stores across Europe. The company operates under the brand names B&Q, Castorama, Brico Depot, Screwfix, TradePoint, and Koctas. It offers its products and services via its stores and through its e-commerce channels.

On March 15, KGFHY’s Screwfix announced that it plans to open more than 50 stores this year. KGFHY signed a franchise agreement with the Al-Futtaim Group to expand B&Q in the Middle East. Also, in February, the company’s Castorama Poland opened its 84th, store in the city of Starogard Gdański in northern Poland. So, the company is widening its market reach.

And last November, KGFHY completed the acquisition of NeedHelp, a B2B2C online platform that connects home-improvement customers with professionals and skilled tradespeople. This shows that KGFHY is building a mobile-first and service-orientated customer experience in keeping with its ‘Powered by Kingfisher’ strategy.

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