The S&P 500 has climbed more than 20% this year, roughly double its long-term historical average. However, because we are now in what has historically been the stock market’s weakest month of the year, it could be wise…
for investors to shift some of their holding to stocks that have been beaten down but have the potential to rebound quickly.
The Federal Reserve’s conviction that inflation will subside, and an expected continuation of its accommodative monetary policy, should drive the performance of value stocks in the coming months.
Given this backdrop, we think Cardiovascular Systems, Inc. (CSII – Get Rating) and Itron Inc. (ITRI – Get Rating), which look undervalued at their current price levels, could be ideal bets now. These two stocks are well-positioned to rebound based on their strong fundamentals and solid growth attributes.
CSII is a medical device company in St. Paul, Minn., develops and distributes solutions for peripheral and coronary artery diseases in the United States and internationally. It offers peripheral artery disease products, which are catheter-based platforms to treat various plaque types and address various limitations related to surgical, catheter, pharmacological treatment alternatives, and peripheral support products. In addition, the company has collaborated with Chansu Vascular Technologies, LLC to create everolimus drug-coated peripheral and coronary balloons.
During its fourth fiscal quarter, ended June 30, 2021, CSII’s net revenue increased 66.9% year-over-year to $70.99 million. Its gross profit surged 55.4% from the prior-year quarter to $50.35 million. The company reported an adjusted EBITDA of $2,000, compared to a $10.56 million negative adjusted EBITDA in the fourth quarter of 2020.
An $0.04 consensus EPS estimate for the next year represents a 125% improvement year-over-year. The $299.67 million consensus revenue estimate for the current year represents a 15.7% increase from the same period last year. The stock has returned 4.9% over the past year to close yesterday’s trading session at $35.25. CSII is currently trading lower than its 50- and 200-day moving averages of $38.09 and $39.88, respectively.
In terms of forward Price/Sales, CSII is currently trading at 4.73x, which is 41.8% lower than the 8.13x industry average. Also, in terms of its forward EV/Sales, the stock is currently trading at 4.12x, which is 41.2% lower than the 7x industry average.
CSII’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CSII is also rated a B grade for Value. Within the Medical – Devices Equipment industry, it is ranked #50 of 183 stocks.
To see additional POWR Ratings for Growth, Stability, Quality, Momentum, and Sentiment for CSII, click here.
ITRI, a Liberty Lake, Wash.-based technology and service company, offers end-to-end solutions to help manage operations in the energy, water, and smart-city sectors worldwide. Device Solutions; Networked Solutions; and Outcomes are the company’s three operational segments. In addition…
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