As inflation hit a new 40-year high last month, a likely 75 bps interest rate hike in July is raising concerns over the economy slipping into a recession over the next few months. Therefore, despite a healing job market, resilient consumer spending, and better-than-expected corporate profits, the market is expected to remain highly volatile.
Given this backdrop, low-priced stocks with sound fundamentals could be ideal picks to benefit from their solid upside in the long run.
Blueknight Energy Partners, L.P. (BKEP), Extreme Networks, Inc. (EXTR), and Viemed Healthcare, Inc. (VMD) are currently trading under $15 but have sound fundamentals and solid growth prospects. These stocks are rated Strong Buy in our proprietary POWR Ratings system.
Blueknight Energy Partners, L.P. (BKEP)
BKEP owns, operates, and develops a diversified portfolio of complementary midstream energy assets. It provides integrated terminaling, storage, processing, gathering, and transportation services for companies engaged in producing, distributing, and marketing crude oil and asphalt products.
For its fiscal 2022 first quarter ended March 31, 2022, BKEP’s total revenue increased 5.1% year-over-year to $28.46 million. The company’s operating income came in at $7.49 million, representing a rise of 3.8% from the year-ago period. It had cash and cash equivalents of $1.05 million as of March 31, 2022.
Its 45.3% trailing-12-month gross profit margin is 15.5% higher than the 39.2% industry average. The company’s trailing-12-month ROTC of 19.5% is 284.1% higher than the industry average of 5.1%. Over the past month, the stock has gained 1.8% to close the last trading session at $4.59.
BKEP’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
It has a B grade for Growth, Quality, and Sentiment. Click here to see the additional ratings for BKEP’s Value, Momentum, and Stability. BKEP is ranked #1 of 12 stocks in the A-rated MLPs - Other industry.
Extreme Networks, Inc. (EXTR)
EXTR provides wired and wireless network infrastructure equipment, software, and services for enterprises, data centers, and service providers.
It markets its products to business, governmental, healthcare, service provider, and educational customers, focusing on corporate enterprises and metropolitan service providers worldwide.
On June 7, 2022, EXTR extended its ExtremeCloud portfolio by introducing new SD-WAN and AIOps with digital twin capabilities that enhance security, improve application performance, and reduce risk and operational costs.
EXTR also introduced the 5720 Universal Switch, the latest in a series of high-performance, feature-rich wired switches for enterprise deployments that automate network operations, streamline network provisioning, and enhance security due to support for Extreme’s Fabric Connect. EXTR should witness high demand from enterprises in the coming months.
For its fiscal 2022 third quarter ended March 31, 2022, EXTR’s total net revenues increased 12.7% year-over-year to $285.51 million. The company’s non-GAAP gross profit came in at $165.61 million, representing a 6.2% year-over-year improvement. Its non-GAAP operating income came in at $35.66 million for the quarter, indicating a 24.6% rise from the prior-year period.
EXTR’s non-GAAP net income came in at $27.42 million, up 32.6% from the prior-year period. Its non-GAAP EPS increased 31.3% year-over-year to $0.21. The company had $166.57 million in cash as of March 31, 2022.
Analysts expect an EPS estimate of $0.77 for fiscal 2022 ending December 31, 2022, indicating a rise of 35.1% from the prior-year period. It surpassed Street EPS estimates in each of the trailing four quarters, which is impressive.
The consensus revenue estimate of $1.10 billion for the same fiscal year represents a 9.3% year-over-year improvement. Its EPS is expected to grow at a rate of 20% per annum over the next five years.
Its 57.3% trailing-12-month gross profit margin is 13.3% higher than the 50.5% industry average. The company’s trailing-12-month ROTC margin of 11.2% is 163.3% higher than the industry average of 4.2%. Over the past month, the stock has gained 27.1% to close the last trading session at $11.07.
EXTR’s POWR Ratings reflect this promising outlook. The stock has an overall A grade, equating to Strong Buy in our proprietary rating system.
It has a B grade for Growth, Value, and Quality. Click here to see the additional ratings for EXTR’s Sentiment, Stability, and Momentum.
EXTR is ranked #1 of 53 stocks in the C-rated Technology - Communication/Networking industry.
Viemed Healthcare, Inc. (VMD)
VMD provides in-home durable medical equipment (DME) and post-acute respiratory healthcare services to patients. It provides respiratory disease management solutions, including treatment, invasive and non-invasive ventilation, and related equipment and supplies to patients suffering from a chronic obstructive pulmonary disease (COPD).
It provides neuromuscular care, oxygen therapy services, sleep apnea management solutions, and/or equipment.
For the fiscal 2022 first quarter ended March 31, 2022, VMD’s revenue increased 13.5% year-over-year to $32.26 million. The company’s gross profit came in at $19.74 million, representing an 11.3% rise from the year-ago period. Its income from operations came in at $2.25 million for the quarter, representing a 68.8% rise from the prior-year period.
While its net income increased 4.6% year-over-year to $1.76 million, its EPS remained unchanged at $0.04. As of March 31, 2022, the company had $29.25 million in cash and cash equivalents.
The consensus EPS estimate of $0.26 for fiscal 2022 ending December 31, 2022, indicates a 19.7% year-over-year improvement. It surpassed Street revenue estimates in each of the trailing four quarters, which is impressive. Analysts expect VMD’s revenue to be $131.30 Million for the same fiscal year, representing a 12.2% rise from the prior-year period.
Its 62.4% trailing-12-month gross profit margin is 13.3% higher than the 55% industry average. The company’s trailing-12-month EBITDA margin of 19.5% is 354.9% higher than the industry average of 4.3%. Over the past month, the stock has gained 45.4% to close the last trading session at $7.81.
VMD’s POWR Ratings reflect its solid prospects. The stock has an overall A grade, which equates to Strong Buy in our proprietary rating system. Also, it has an A grade for Quality and a B grade for Growth, Stability, and Sentiment.
In addition to the POWR Rating grades we have just highlighted, one can see VMD’s Value and Momentum ratings here. VMD is ranked #3 of 83 stocks in the C-rated Medical - Services industry.
BKEP shares were trading at $4.59 per share on Friday afternoon, down $0.00 (0.00%). Year-to-date, BKEP has gained 42.07%, versus a -16.20% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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