5 Dirt Cheap Homebuilder Stocks In 2022
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In 2022, there are a lot of cheap stocks out there.
One group that is especially cheap are the homebuilders. Many of them trade with forward P/Es of 5 or lower.
But with rising mortgage rates, which have already spiked as high as 5% on the 30-year fixed mortgage, are the homebuilders set to see a big earnings slowdown in 2022? Or are the fears about rising rates overblown?
Interest in New Homes Not Slowing…Yet
Two large homebuilders have reported earnings in March so we have real-time insight as to what the homebuilders are seeing in their businesses.
Stocks are still on sale in 2022, but maybe it’s time to take the emotions out of investing?
A quantitative analysis stock screen could be just the ticket.
Zacks Research Wizard has guru stock screens from some of the best in the industry, including O’Shaughnessy Asset Management’s Jim O’Shaughnessy, the author of the best-selling investing book “What Works on Wall Street.”
If you like strategy investing, this podcast is for you.
This O’Shaughnessy strategy includes the P/S ratio but does not screen for the Zacks Rank.
Running this guru screen returned 50 stocks. Here are 5 to consider.
5 Value Stocks to Keep on Your Watch List
1. Hawkins (HWKN - Free Report)
Hawkins is a specialty chemical company founded in 1938. It has 49 facilities in 24 states and does business in 3 segments including Water Treatment, Health & Nutrition, and Industrial. It has 33 water treatment facilities.
In 2021, Hawkins had record annual revenue and earnings. Shares are up 17.6% this year but Hawkins is still attractively valued with a P/S ratio of 1.4.
Hawkins recently raised its dividend 8%. It now yields 1.2%.
Will Hawkins continue to see momentum in 2022?
2. AutoNation (AN - Free Report)
AutoNation is cashing in on the demand for autos during the pandemic. Full-year earnings were a record. In the fourth quarter of 2021, used vehicles continued to drive the quarter, as revenue was up 55% while new vehicle revenue fell 7%.
Analysts expect AutoNation to grow earnings another 10.6% in 2022.
AutoNation is dirt cheap, with a forward P/E of just 5.8 and a P/S ratio of 0.3.
It doesn’t pay a dividend but is doing a share buyback.
AutoNation shares are down 1.3% year-to-date.
Is AutoNation stock a deal?
3. Costco (COST - Free Report)
Costco operates 828 warehouses in the US, Puerto Rico, Canada, Mexico, Japan, the UK, Korea, Taiwan, Australia, Spain, France China, and Iceland.
This retail giant has been posting double-digit monthly sales comps in the United States in 2022, defying critics who believe consumer spending is slowing.
Where’s the value? Costco trades with a P/S ratio of just 1.18 even though shares are up 66% over the last year.
Should value investors consider Costco in 2022?
4. UFP Industries (UFPI - Free Report)
UFP Industries is a supplier of lumber to the manufactured housing industry. It operates in 3 segments: retail, industrial, and construction.
UFP Industries saw record earnings in 2021 after it acquired 9 companies in the year. On Jan 28, after seeing strong cash flow, it raised its dividend 33%.
Year-to-date, shares are down 8% but shares remain cheap with a P/S ratio of just 0.6.
Should UFP Industries be on your watch list?
5. Bunge (BG - Free Report)
Bunge’s website says it connects farmers to consumers and delivers essential food, feed, and fuel to the world. In the fourth quarter of 2021, Bunge’s refined and specialty oils posted record results.
In Feb 2022, Bunge expected favorable market conditions to continue.
Shares have been red-hot in 2022, gaining 20% but Bunge remains cheap with a P/S ratio of just 0.3.
Bunge pays a dividend, yielding 1.9%.
Should value investors be considering Bunge in 2022?
Disclaimer: Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the more