Perion Networks: A Gem Among Rocks
As the market rallies day after day, and valuations in the leading stocks begin to look stretched, picking up companies with discount valuations can ease the nerves. Investors who buy stocks trading below historic valuations enjoy a certain confidence that growth investors often have to swallow.
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Perion Networks
Perion Networks operates a global advertising technology (adtech) platform that connects advertisers with publishers and consumers. They specialize in helping advertisers reach targeted audiences through various channels, including display advertising, video advertising, and search advertising. PERI recently gained recognition for its growth in the connected TV (CTV) advertising space, which is a rapidly developing sector within the adtech industry.
Perion Networks landed on the Zacks Rank #1 (Strong Buy) list just this morning after analysts upgraded this year’s earnings estimates. FY24 earnings estimates were revised higher by 1.2%.
Additionally, sales for this year are forecast to grow 17% YoY and next year by 10%.
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PERI is currently trading at a one year forward earnings multiple of 7.5x, which is well below its 10-year median valuation of 11.2x. But that isn’t the only valuation method identifying a discount, the PEG Ratio, which includes earnings growth forecasts, also indicates a potential opportunity.
Perion Network’s EPS are forecast to grow at an incredible 22% annually over the next 3-5 years, giving it a PEG ratio of just 0.34, which would imply a deeply discounted valuation.
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Honda Motor Company: Revving Up Value
Since EVs have been garnering all the hype and buying over the last few years, traditional auto manufacturer stocks seem to have fallen out of favor. But for discerning investors this is creating a juicy opportunity.
Now that EV sales growth has begun to slow in the US, and hybrid car options have again gained popularity Honda Motor Company HMC may be an exceptional opportunity. Just take a look at how HMC has outperformed Tesla TSLA over the last nine months.
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Furthermore, Honda Motor Company has a Zacks Rank #1 (Strong Buy) rating, indicating upward trending earnings revisions. Earnings estimates have been upgraded across timeframes, and sales are expected to expand 14% this year.
Companies ride the wave of AI for enhanced efficiency and superior quality, a groundbreaking ISG Provider Lens™ report highlights
Amidst the rapid evolution of artificial intelligence and cloud technologies, U.S. enterprises have undergone a metamorphosis in their approach to application development and management (ADM) strategies as per the latest research published by Information Services Group (ISG) III, a prominent global technology research and advisory firm.
Entrenched in a quest for cost optimization, U.S. companies have embraced AI technologies throughout the lifecycles of applications, catapulting the adoption of generative AI (GenAI) in early developmental stages, asserts the 2024 ISG Provider Lens™ Next-Gen ADM Services report for the U.S.
Leveraging AI tools has led to the automation of ADM tasks, resulting in enhanced software quality, minimized downtime, and boosted efficiency, as outlined in the report. This automation journey contributes to heightened developer productivity, reduced time to market, and proactive maintenance practices.
Prioritizing quality assurance, U.S. enterprises are exploring GenAI's potential applications in this realm. By automating test creation and scenario simulation, GenAI accelerates testing processes, uncovering discrepancies that might elude manual inspections. Companies tread cautiously, endeavoring to embed quality assurance mechanisms in GenAI to ensure ethical and optimal functionality.
A notable trend sees an increasing number of U.S. enterprises consolidating applications and underlying IT infrastructure engagements, enwrapping servers, networks, and cloud services, heralding optimized performance, scalability, security, and cost-efficiency, discloses the report.
Enterprises are gravitating towards major public cloud platforms for robust, scalable, and flexible applications, facilitated by orchestration tools like Kubernetes, microservices architectures, containerization, and DevOps methodologies. This strategic shift to the cloud harmonizes with market dynamics, enabling enterprises to pivot swiftly in response to evolving customer needs.
Fusion of site reliability engineering (SRE) with AI for IT operations (AIOps) heralds a new epoch in ADM operations, affirms the report. This blend harnesses machine learning and advanced analytics to navigate vast operational datasets, empowering companies with holistic insights into system performance and the ability to preemptively address potential glitches for seamless service delivery.
The report delves into additional ADM trends in the U.S., spotlighting providers' adeptness in catering to industry-specific demands, and the ascendancy of Agile and DevOps practices in continuous testing services, underpinning a narrative of ongoing evolution and adaptability in the technology sphere.
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Honda Motor Company is trading at a one year forward earnings multiple of 8.5x, below its 10-year median valuation of 9.1x. Although not a deep historical discount, HMC also has a PEG ratio indicating a deep value opportunity.
With EPS growth forecast of 20.8% annually over the next 3-5 years, HMC has a PEG ratio of 0.4.
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KKR & Co.: Riding the Wave of Private Equity
Over the last four months, private equity giant KKR & Co.KKR has been on an absolute tear, crushing the returns of the already strong broader market. Thanks to its private credit business, which has exploded in the last year thanks to banks that are hesitant to make loans, investors have piled into the stock.
And it doesn’t look like the rally will end any time soon.
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KKR & Co. has a Zacks Rank #1 (Strong Buy) rating as analysts have nearly unanimously revised earnings estimates higher across timeframes. KKR is also expected to grow its top line by 18% this year and 15% next year.
Unleashing the Potential: KKR & Co. Grows Amidst Value Concerns
KKR & Co. is not trading at a historical discount, with its forward earnings multiple of 21.2x currently above its 10-year median valuation of 14.4x. Despite this, the company’s business and profits are expanding impressively, painting a picture of growth amidst valuation challenges.
Looking Towards the Future
With EPS growth forecasts projecting a remarkable 27.2% annual increase over the next 3-5 years, KKR & Co. boasts a PEG ratio of 0.78, indicating a potential undervaluation compared to its growth prospects.
Analyzing the Bottom Line
For investors prioritizing value over growth, stocks like KKR & Co. present an intriguing opportunity. These equities warrant serious consideration for inclusion in investment portfolios, offering the promise of stability, steady returns, and long-term appreciation.