Although finding undervalued stocks remains challenging after almost six months of a significant rally, there are still a few firms that continue to pop up on my value screens. One that is reasonably valued, has good growth prospects and is starting to receive upgrades is below.
7 Reasons ATU is a solid pick at $29 a share:
- The stock has been initiated as a "Buy" at Stifel Nicolaus and at Zacks over the past few weeks.
- The company showed solid results from all of its product lines and raised guidance during its recent earnings announcement.
- Earnings are showing solid growth. It made $1.68 a share in FY2011. Analysts project it will make $2.06 in FY2012 and $2.26 in FY2013.
- The stock has easily beat earnings estimates during the last four quarters. Earnings estimates for FY2012 and FY2013 have also risen over the past month.
- Insiders are holding onto their stock (less than 1.5% of total insider shares sold in the last six months) even as stock has appreciated and ATU goes for a reasonable 11 times operating cash flow.
- The stock has a forward PE of under 13 and a five year projected PEG of under 1 (.94).
- The stock is showing increasing technical strength and is solidly above its 200 day moving average (see chart).
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.