– Ford Motor Company (NYSE:F) and Penumbra, Inc. (NYSE:PEN)
It’s vital to research the best stocks to buy now because of days like Thursday (June 2, 2022). Microsoft reported a gloomy outlook, and May’s ADP private-sector payroll numbers were the worst of the pandemic recovery.
Yet markets shook it off, snapped a 2-day losing streak, and ended the day green.
The Dow Jones added 435 points or 1.3%. The S&P 500 gained 1.8%. Tech led the way, and the Nasdaq soared 2.7%.
Market sentiment is frankly all over the place, and bulls and bears are playing an intense game of tug-of-war.
Some are bulls, such as LPL Financial’s Scott Brown. He refers to his firm as “anything but market pessimists.” He also sees opportunities in the second half of the year.
Others like Bank of America want to douse the flames. In a Thursday (June 2, 2022) note, the bank reminded investors that 17 of 26 bear markets since 1929 saw 10+% short-term rallies and averaged 1.5 head-fake rallies.
All we know is that we know nothing. If we had a crystal ball, investing would be easy. But, such is life.
That’s why investors right now want upside with value. Two of the best stocks to buy now fit that bill in Ford Motor Company (NYSE:F) and Penumbra, Inc. (NYSE:PEN).
Ford is a company long revered by value investors. It boasts rock-solid fundamentals and shareholder yield. It also is an automaker built to outperform and withstand economic shocks. After all, it was the only U.S. automaker to not go bankrupt during the financial crisis.
Then there’s the medical device company Penumbra. Penumbra has short-term and long-term catalysts working in its favor, and analysts know it. Perhaps that’s why it has an average 71.51% upside.
Investors use many strategies during uncertain times. But when you consider companies like Ford and Penumbra, it’s hard to go wrong. Hopefully, you’ll feel the same after reading why they’re June 3, 2022’s best stocks to buy now.
Ford Motor Company (NYSE:F)
As this blue-chip automaker outperforms a struggling industry, it could see a 37.72% upside.
Founded in 1903, Ford is a prominent player in the automobile industry. It is the world’s number 4-ranked automaker in revenue and was ranked as the Top Automaker in 2022’s JUST 100 rankings.
News released on Thursday (June 2, 2022) adds more credence to Ford’s positioning.
Automobile sales are down as the industry confronts inflation, supply chain logjams, and chip shortages. However, Ford remains resilient. Ford’s May sales declines narrowed month over month and fell just 4.5%. Overall industry sales fell over 6x more at 30%.
Moreover, May sales for F-Series pickups and Mustang Mach-E EVs increased year over year. Demand also remains robust for new Ford models such as the Bronco, Bronco Sport SUV, and Maverick pickup.
Although the stock currently sits over 45.0% below its highs, the fundamental value of Ford cannot be ignored.
Ford has long been a favorite for value investors. It boasts attractive multiples and a high shareholder yield. Currently, it trades at the following multiples suggesting it remains severely undervalued.
- 8x trailing P/E
- 8x forward P/E
- 4x Price/Sales (both trailing and forward)
- 02 PEG ratio
- 2x Price/Book
With a 3.0% dividend yield on a $13.89 stock price, you know investors can also count on consistent yields.
The automaker’s 29.3% ROCE also indicates that the Company generates a strong return on its common equity’s book value.
However, what truly captures Ford’s fundamental strength is its Piotroski Score. The Piotroski Score is a rating developed by Stanford accounting professor Joseph Piotroski. Companies are scored 0-9 based on healthy Liquid Balance Sheets, Profitability, and Operating Efficiency.
Ford scored an 8 out of 9.
If you’re worried about this stock’s decline, consider this. Historically, Ford outperforms other automakers in turbulent times. For example, during the 2008 financial crisis, guess who was the only U.S. automaker not to go bankrupt. Ford.
2022 feels like deja vu.
TipRanks notes that based on 17 Wall Street analysts offering 12-month price targets in the last 3 months, Ford’s average price target is $19.13 with a high forecast of $32.00 and a low forecast of $12.00. The average price target represents a 37.72% upside from June 2, 2022’s closing price of $13.89.
F’s year-to-date low and high are $12.07 and $25.57, respectively.
Penumbra, Inc. (NYSE:PEN)
Analyst sentiment has this medical device innovator eyeing a 71.51% upside. A recent JPMorgan upgrade doesn’t hurt either.
If you aren’t familiar with Penumbra, Inc., you should learn about it. It is a prominent player in the healthcare equipment & supplies industry specializing in treating strokes and other vascular-related conditions.
Penumbra has many long-term catalysts working in its favor, and that’s precisely why JPMorgan just hiked its price target to $245.
Penumbra’s leading device is its vascular thrombectomy Indigo Aspiration System. The device aims to remove blood clots in the peripheral arterial and venous systems and treat pulmonary embolisms with minimal bleeding and blood loss.
Indigo’s impact on its U.S. patient base has been colossal. After all, 71% of Penumbra’s revenue comes from the U.S. market. Now that Indigo launched in Europe in April, Penumbra could see blue sky potential for its revenue to exponentially increase.
Perhaps that’s why Finbox projects Penumbra to see revenue grow at a 5-year 23.2% CAGR and net income increase by an outstanding 139.4% and average 115.3% over the next five fiscal years.
Consider Penumbra’s revenue growth figures from Q1 before even entering Europe. Revenue reached $203.9 million and increased 20% year-over-over. Sales of vascular products accounted for $122.8 million of the total, and the Company’s neuro products brought in $81.1 million.
Beyond expanding in Europe, Penumbra is also preparing to release its cutting-edge Thunderbolt system next year.
So, needless to say, the catalysts are mounting, and analysts know it. Especially with the stock nearly 50% off its highs.
According to Tipranks, Penumbra is a STRONG BUY based on 6 Wall Street analysts offering 12-month price targets in the last 3 months. This includes 5 BUYS vs. 1 HOLD and 0 SELL. Penumbra’s average price target is $250.40, with a high forecast of $272.00 and a low forecast of $220.00. The average price target represents a 71.51% upside from June 2, 2022’s closing price of $$146.00.
JPMorgan Analyst Robbie Marcus is the most recent analyst to maintain an OVERWEIGHT rating on the stock. He hiked his price target to $245, implying a 67.81% upside from June 2, 2022’s close.
Marcus is a believer in the Company’s long-term outlook. He sees PEN’s current valuation as an attractive entry point and believes that growth could accelerate into 2023. He’s especially encouraged by early feedback on Thunderbolt.
Since April, Citigroup, Wells Fargo, and Deutsche Bank also maintained BUY or OVERWEIGHT ratings.
PEN’s year-to-date low and high are $130.96 and $290.36, respectively.