3 undervalued stocks to buy in May 2022
- These undervalued stocks have strong long-term prospects and can beat the market next month.
- Beyond meat (BYND): Diversify into the plant-based chicken segment to meet growing demand for meat substitutes.
- Innovative industrial properties (IIRP): This REIT offers an alternative route to participate in the cannabis sector.
- Selling power (RCMP): The cloud-based software company has made significant acquisitions that will create new cross-selling opportunities.
Investor sentiment turned depressed on the street. In particular, the market correction has been substantial for technology-intensive companies. Nasdaq 100 index, leading to a drop of more than 20% since the beginning of the year (YTD). In this context, negotiate hunters seek for undervalued stocks to buy that may gain traction in the coming months.
Meanwhile, analysts wonder if a recession and a bear market could be around the corner. In the last days, Morgan Stanley (NYSE:MRS) warned investors that the declines could worsen for the S&P500 index as well.
Proper diversification is key to protecting your hard-earned money in these uncertain times. It is also important to remember that there is always a bull market somewhere on Wall Street.
The purchase of physical assets or shares giving access to these names is an option. Examples would include real estate, rreal estate investment trusts (REITs) or raw materials such as precious metals. For some investors, the fine arts might also be a place to consider. These assets would serve as a hedge against inflation.
Another possibility is growth stocks which have fallen out of fashion in recent months. After all, their long-term outlook could be a game-changer for many portfolios. Likewise, established tech names that have recently come under pressure also need your attention.nm
With that information, here are three undervalued stocks that look set to beat the market in May:
|IIRP||Innovative industrial properties||$148.10|
Beyond Meat (BYND)
Our first undervalued stock today is Beyond meat (NASDAQ:BYND), the famous producer of plant-based meat substitutes. Its products include alternatives to burgers, sausages, ground beef and chicken. The company aims to replicate the look and taste of meat.
Beyond the meat came out fourth quarter 2021 results February 24. Revenue fell 1.2% year-over-year (YOY) to $101 million. Adjusted net loss jumped up at $1.27 per share, compared to a loss per share of 34 cents in the year-ago period. Cash and cash equivalents ended the period at $733 million.
Investors are concerned that sales growth has slowed significantly over the past two quarters. In the fourth quarter, sales to supermarkets fell by 20% in the United States
On the positive side, Beyond Meat is currently focused on diversifying into the plant-based chicken segment, which could mean increased revenue. Management expects demand recover once new products hit the market in 2022.
BYND Stock tanked 71% in the last year and 40% YTD. The shares are trading at 5.1 times current sales. Meanwhile, the 12-month median price prediction for Beyond Meat is $45.
Innovative Industrial Properties (IIPR)
Next on the list is Innovative industrial properties (NYSE:IIRP), a net-lease REIT that offers real estate facilities to state-licensed and legal operators in the cannabis industry. This REIT owns 108 properties totaling 8.1 million square feet.
IIRP announcement Q4 2021 results February 23. Revenue increased 59% year-on-year to $58.9 million. Net earnings per diluted share were $1.14, compared to 91 cents in the year-ago quarter. Adjusted funds from operations (FFO) per share increased 42% year-on-year to $1.85. Cash, cash equivalents and short-term investments ended the period at $406 million.
As more states continue to legalize recreational cannabis sales, IIPR action is well positioned to take advantage of this growth potential. For example, management added four new properties during the first quarter. The REIT benefits from an unmatched average lease term of 16.6 years, the best in the industry.
Yet the actions of the IIPR declined more … than 40% YTD. Many investors would be interested to know generates an attractive dividend yield of 4.7%. Meanwhile, the 12-month median price forecast for innovative industrial properties is at $250.
The last in our list of undervalued stocks is Selling power (NYSE:RCMP), the customer relationship management (CRM) software leader. This Around 30 offers enterprise cloud computing solutions to help businesses maintain and improve customer relationships. For example, its Customer 360 platform uses artificial intelligence (AI)-based software that streamlines data across different departments on a single platform.
Selling power Posted FY22 Fourth Quarter Results on March 1. Revenue increased 26% year-on-year to $7.3 billion. Adjusted diluted earnings per share were 84 cents, down from $1.04 a year ago. Cash and cash equivalents ended the quarter at $5.5 billion.
The company controls more than 20% of the global CRM market, surpassing the combined shares of its four closest competitors: Oracle (NYSE:ORCL), Microsoft (NASDAQ:MSFT), SAP (NYSE:SAP) and Adobe (NASDAQ:ADBE).
Meanwhile, Salesforce has grown both organically and through acquisitions. For example, the $27.7 billion acquisition of enterprise messaging platform Soft could help the company reach $32 billion turnover next year. Management forecasts double annual sales to $50 billion by FY2026.
However, like most tech names, stock CRM lost 29% since the beginning of the year. Compared to 2021, stocks offer better value at 36.6 times forward earnings and 6.3 times current sales. Finally, the 12-month median price prediction for Salesforce is $300.
At the date of publication, Tezcan Gecgil did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.