Top Value Stocks For September

As of last Wednesday, the stock market had literally never been better. The Nasdaq NDAQ broke past 12,000 to its all-time high, the S&P closed above 3580, and the Dow was less than a percentage point away from its own record. Yet Thursday’s pullback (and the continued Friday sell-off) raise doubts about this rosy picture. The U.S. is still down 11.5 million jobs since the pandemic’s onset, and the Federal Reserve has effectively traded its dual mandate for a strategy of “maximum employment.” Meanwhile, consumer spending only rose 1.9% in July, as the country is convulsing with protests and electoral chaos – and many investors are grumbling that equity valuations have become dangerously untethered from economic reality. Whether or not this is true remains to be seen. But for those concerned about overheated equity markets, our Artificial Intelligence (“AI”) algorithms at Q.ai have identified standout stocks which punch above their weight, classified as the Top Quality Value stocks this week.

Sign up for the free Forbes AI Investor newsletter here to join an exclusive AI investing community and get premium investing ideas before markets open.

VMware, Inc. (VMW)

A California-based cloud and virtualization player, VMware VMW holds a storied place in Silicon Valley history. It was one of the first companies to successfully market what’s known as the x86 architecture, which is now the dominant standard for CPUs. Our artificial intelligence (AI) networks graded VMware an A in Quality Value, as well as a C in Technical, a C in Growth, a C in Momentum Volatility. The stock closed down 4.55% in the past week on a volume of 1,718,344, compared to its 10-day average of $142.98 and its 22-day price average of $141.12. The stock is down 11.67% for the year. Despite the pandemic, revenue grew by 4.87% over the past fiscal year, and 36.01% in the last three. Operating income rose as well, by 11.97% in FY19, and 8.62% over the past three. EPS surged by 254.55% over the past three fiscal years. Revenue was $10811.0M in the last fiscal year, which is an order of magnitude higher than $1567.0M three years ago. EPS was $15.08 in FY19, compared to $1.04 three years ago. The overall return on equity was 128.4% in the past year, which compares quite favorable to 5.05% three years ago. Shares are trading with a Forward 12M P/E of 20.35, and Forward 12M revenue is expected to grow by 4.6% over the next 12 months.

Recommended For You

MORE FROM FORBESVMware (VMW)

Cigna Corp (CI)

Headquartered in unobtrusive Bloomfield, Connecticut, Cigna CI is one of the largest health insurers in America, and ranks 13th on the Fortune 500 list. Our AI systems rated Cigna an A in Quality Value, along with a C in Technical, C in Growth, and C in Momentum Volatility. The stock closed up 0.1% to $178.61, on a volume of 1,813,657 and against a 10-day price average of $177.93, and a 22-day average of $179.37. Although shares are down 12.85% for the year, revenue grew by 0.58% in FY19, and an impressive 267.79% over the past three years. Operating income tracks similarly, having risen 1.55% in FY19, and 109.77% over the past three years. EPS grew by 4.48% in the past fiscal year, compared with 60.12% over the past three. Revenue was a staggering $153743.0M in the last fiscal year, which drastically outperforms $42043.0M three years ago. Operating income was $9046.0M in FY19, and compares to $4379.0M three years ago. EPS was $13.44 in FY19, and compares to $8.77 three years ago. Overall return on equity was 11.84% in the last year, and compares to 16.21% three years ago. Cigna shares are trading with a forward 12M P/E of 9.83, and forward 12M revenue is expected to grow by 2.92% over the next 12 months.

MORE FROM FORBESCigna (CI)

Altria Group (MO)

The Richmond, VA-based tobacco conglomerate Altria Group MO is the parent company of Phillips Morris USA, which sells the Marlboro brand of cigarettes. Our deep learning technology assigned Altria an A in Quality Value, as well as an A in Momentum Volatility, a B in Technical, and a C in Growth. Shares closed up 0.46% to $43.49 on a volume of 9,460,985, compared to a 10-day price average of $43.58 and a 22-day price average of $43.24. The stock is down 11.7% for the year. Revenue grew by 2.66% in the last fiscal year, as compared to 4.25% over the last three fiscal years. Operating income grew by 5.12% in FY19, and 14.07% over the past three. EPS contracted by -29.26% in the last fiscal year. Revenue was $19796.0M in the last fiscal year, which is roughly flat from $19494.0M three years ago. Operating income is similar, having risen modestly from $9961.0M three years ago to $10810.0M in the last fiscal year. EPS was -$0.7 in the last fiscal year, having fallen from $5.31 three years ago. ROE has likewise fallen to -12.25%, down from 72.46% three years ago. Altria shares are trading with a forward P/E of 9.88, and forward 12M revenue is expected to grow by a modest 1.01% over the next 12 months.

MORE FROM FORBESAltria Group (MO)

Bristol-Myers Squibb Corp. (BMY)

Next on our list of Quality Value stocks is another health care giant, this time in the pharmaceuticals niche. Headquartered in New York City, Bristol-Myers Squibb BMY sells drugs for a diverse range of conditions, including HIV, diabetes, cancer, and psychiatrics. The firm is also a player in COVID-19 research, having partnered with the National Institutes of Health and other leading pharmaceuticals firms to “accelerate the development of coronavirus treatments.” Our AI technology assigned BMY an A in Quality Value, along with an A in Technical, C in Growth, and a B in Momentum Volatility. Shares closed down 0.17% in the last week to $59.95, on a volume of 16,405,780. The 10-day price average was $61.71, and the 22-day price average was $62.21. The stock is mildly down for the year at 5.35%, but revenue grew by 33.34% in FY19 and 67.8% over the past three. Operating income rose similarly, and is up 7.04% in the last fiscal year, and 89.97% in the past three. Revenue contracted slightly, at $26145.0M in FY19 versus $20776.0M three years ago. Operating income levels are $7064.0M in the past fiscal year, compared to $3980.0M three years ago. EPS was $2.01 in the past fiscal year, compared to $0.61 three years ago. ROE was 10.51% in the past year, compared to 6.92% three years ago. Bristol’s forward 12M revenue is expected to grow by 2.97% over the next twelve months, and shares have been trading with a forward 12M P/E ratio of 9.16.

MORE FROM FORBESAltria Group (MO)

Mercury General Corp (MCY)

An LA-based insurer, Mercury General Corp MCY is a multi-line insurance group that sells contracts to individuals (auto and homeowners insurance), renters, as well as businesses. Our AI deep learning machines graded the stock an A in Quality Value, as well as an A in Momentum Volatility, A in Growth, and D in Technical. Shares closed up 0.18% to $44.97, on a volume of 165,268 and against a 10-day average of $45.09 and a 22-day average of $45.18. The stock is down 7.87% for the year, and revenue rose by 8.11% over the past three fiscal years. Operating income also grew, rising 29.14% over the past three fiscal years, and rising from $178.95M three years ago to $395.1M in FY19. Revenue was $3972.52M in FY19, and compares to $3412.66M three years ago. EPS grew by 30.97% over the past three fiscal years; it was $5.78 in FY19, and compares to $2.62 three years ago. ROE was 18.73% in the past year, and compares to 8.25% three years ago. Mercury’s forward 12M revenue is expected to grow modestly by 0.17% over the next 12 months. Shares are trading with a forward 12M P/E ratio of 10.92.

MORE FROM FORBESMercury General (MCY)

Vectrus Inc (VEC)

Last on our list is Vectrus, Inc. (VEC), a Colorado Springs-based facility support and services company. Our AI technology assessed the stock at an A in Quality Value, and gave it additional grades of C in Technical, C in Growth, and C in Momentum Volatility. Shares closed up 2.58% in the past week to $41.76 on a volume of 132,319, against a 10-day price average of $42.72 and a 22-day price average of $44.17. The stock is down 20.7% for the year, having missed out on the broader bull market. But fundamentals are sound – revenue grew by 2.19% in FY19, and 26.75% in the past three. Operating income rose by 26.75% over the past three fiscal years. Revenue was $1382.64M in FY19, which is up from $1114.79M three years ago. Operating income is likewise up, at $52.62M in FY19 compared to $41.22M three years ago. EPS fell from $5.31 three years ago to $2.99 in the past fiscal year. ROE was 14.38% in the past year, which compares to 39.56% three years ago. Forward 12M revenue is expected to grow by 4.23% over the next 12 months. Vectrus shares are trading with a forward 12M P/E ratio of 11.7.

MORE FROM FORBESVectrus (VEC)

Liked what you read? Sign up for our free Forbes AI Investor Newsletter here to get AI driven investing ideas weekly. For a limited time, subscribers can join an exclusive slack group to get these ideas before markets open.

Comments are closed.