Oil prices have rebounded well off of their 2016 lows, and now appear to have stabilized in the $60-plus per barrel range. However, while some energy stocks have similarly recovered, others remain deeply out of favor with the market — which presents an opportunity for investors. In addition to a value price, these stocks also bring high dividend yields to the table. They are both worth a deep dive today.
Top 5 Undervalued Stocks To Buy Right Now: Walt Disney Company (DIS)
Shares of Disney may be within a few percentage points of its all-time highs, but the entertainment and media king is still a good buy. Its theme parks are still a major attraction annually, and were the only segment for Disney that grew revenue and operating income last year.
And Disney is the 800-pound gorilla in movies. It owns the Marvel universe through its acquisition of Marvel Entertainment. And having also bought Pixar and Lucasfilm, it has the Toy Story and Star Wars franchises. Analysts at financial services firm Cowen have estimated Disney earned 61% of the movie industry’s total profits in 2016.
If Disney is successful in acquiring Twenty-First Century Fox, it could also get everything from Avatar to The Simpsons. Its empire, of course, also stretches out into toys, broadcast television, and more.
Disney trades at only 16 times trailing earnings and 13 times next year’s estimates, and with a modest dividend that currently yields almost 1.6%, it might be seen as a good value. Priced at just 13 times the free cash flow it produces — and considering the company’s expansion possibilities — Disney is a bargain stock that can continue growing.
Top 5 Undervalued Stocks To Buy Right Now: Sibanye Gold Limited(SBGL)
Sibanye-Stillwater is in a free fall for the worst possible reason: the death of several workers within months. Twenty of the 45 fatalities in the South African mining industry so far this year have occurred at Sibanye’s mines, as the nation’s mineral resources minister, Gwede Mantashe, recently pointed out. Not surprisingly, the stock is tumbling.
Sibanye had already drawn investors’ ire mid-last year when it announced a rights issue at a steep 60% discount to the then market price to raise funds to pare down a humongous $2.65 billion loan that it took to acquire platinum and palladium miner Stillwater Mining.
Management is planning to restructure operations, lower headcount, and enter streaming agreements in the near future to boost cash flows. Yet, it’s a sorry state of affairs at Sibanye, more so with the onus to prove its commitment toward the safety of its workers larger than ever.
The recent fatalities will also likely hit production and could compel Sibanye to downgrade its full-year production guidance from 1.24 million ounces-1.29 million ounces of gold from South African operations and 1.1 million ounces-1.15 million ounces of platinum. Those estimates are lower than the miner’s 2017 actual production, which leaves me with no reason whatsoever to recommend Sibanye today.
Top 5 Undervalued Stocks To Buy Right Now: MariMed Inc.(MRMD)
MariMed is a leading professional management company serving the emerging cannabis market. The company also markets cannabis products, including Nature’s Heritage cannabis and cannabis-infused edibles Kalm Corn microwaveable popcorn and Betty’s Eddies fruit chews.
So far in 2018, MariMed stock has skyrocketed more than 240%. By the end of Q1, MariMed’s share price had jumped over 60%. But the big gains came after the company reported its Q1 results in mid-May. MariMed announced revenue of a little over $2 million — an 81% year-over-year jump.
Investors were likely expecting an even bigger boost for MariMed with growth in medical cannabis markets in Massachusetts and Maryland. The company began operations in its Maryland cultivation and production facility in Q1. MariMed is building a new 68,000 square foot cannabis facility in New Bedford, Massachusetts.
Top 5 Undervalued Stocks To Buy Right Now: Acceleron Pharma Inc.(XLRN)
Acceleron Pharma stock increased 30% this week. The big catalyst for the biotech came from the release of positive results Thursday evening from a phase 3 study of luspatercept in treating myelodysplastic syndromes (MDS), a group of rare blood disorders.
Luspatercept achieved the study’s primary endpoint of statistically significant improvement in "red blood cell (RBC) transfusion independence of at least 8 consecutive weeks during the first 24 weeks compared to placebo." The drug also met a key secondary endpoint of the study by improving RBC transfusion independence of at least 12 consecutive weeks during the first 24 weeks by a statistically significant level.
This good news for Acceleron was also good for its partner, Celgene (NASDAQ:CELG). The two companies plan to submit luspatercept for regulatory approvals in the U.S. and in Europe in the first half of 2019. Celgene thinks the drug could generate peak annual sales of more than $2 billion.