Bargain Hunting: 3 Strong Buy Stocks That Are Too Cheap to Ignore

There is a popular saying that advises investors to steer clear of the stock market during this time of year, known as “Sell in May and go away”. However, a recent prediction from Bank of America’s technical strategist, Stephen Suttmeier, suggests that investors might benefit from re-entering the market before the summer takes hold. Suttmeier believes that several technical indicators indicate that the stock market will rise by up to 5%, after a brief period of decline. His recommendation is to take advantage of this dip by purchasing stocks before the upswing begins. With this in mind, we searched the TipRanks database for promising stocks that have experienced recent setbacks, but also have a Strong Buy consensus rating from analysts. Check out our picks for stocks that could be a bargain ahead of a potential “summer rip.”

ModivCare Inc. (MODV) is a healthcare company that provides non-emergency patient transport, remote monitoring, meal deliveries, personal care, and care management services for out-patients in home-based care situations. The company prioritizes addressing social determinants of health to reduce costs without compromising treatments and improve patients’ long-term outcomes. MODV saw a peak in February when shares were around $110 but has since fallen 38%. Despite strong numbers for Q4 2022, the company’s forward guidance came in just below expectations. However, Jefferies analyst Brian Tanquilut believes MODV’s guidance is conservative for FY23, and contract wins in non-emergency medical transportation will drive growth acceleration in ’24. Tanquilut gives MODV a Buy rating and a $150 price target, suggesting a share appreciation of 118% in the coming year. MODV has a unanimous Strong Buy consensus rating among 4 recent analysts, with a $153.25 average price target implying a one-year upside potential of 121%. The company will be releasing its Q1 results tomorrow before the market opens.

GitLab Inc. (GTLB) is a tech company that provides an open-source DevSecOps platform, offering users increased speed, efficiency, and creativity in planning, building, and deploying software products. GitLab uses a “freemium” model, where all users can access basic services, and higher-level upgrades are available for subscription-paying users. The company has over 30 million users, including over 1 million active license users, and over 3,300 code contributors who offer upgrades and additions to the open-source platform. The company announced new AI-driven features that use natural language to explain vulnerabilities to users, emphasizing that these features are designed to protect users’ intellectual property. In Q4 of fiscal year 2023, GitLab’s revenue beat forecasts, reaching $122.9 million, up 58% YoY, and non-GAAP earnings beat the analyst forecast by 11 cents. Alongside strong revenue and earnings numbers, the company reported 7,002 customers with over $5,000 in annual recurring revenue, including a 52% YoY increase in customers, driver by 42% YoY premium customers. Although guidance was weak, with a fiscal 2024 revenue prediction in the range of $529 million to $533 million, below the Street’s estimate of $586 million, Truist’s Joel Fishbein believes that GitLab is a long-term bet. Fishbein rates GTLB as a Buy, with a $50 price target, indicating a 76% upside in the next 12 months. The stock has a Strong Buy consensus rating, with a $45.38 average price target, implying a 59% potential gain from the current trading price.

BRT Apartments Corporation (BRT) is a REIT that specializes in owning, managing, operating, and developing multi-family dwelling assets in prime Sun Belt locations. The company prioritizes property acquisitions that are stabilized, undermanaged, or have potential to benefit from capital improvements in high-growth regions adjacent to universities, commercial developments, and business centers. BRT has 29 properties in 11 states with a total of 8,201 rental units, heavily invested in the Carolinas, Georgia, Tennessee, Alabama, and Texas. In Q4 2022, BRT showed revenues of $22.7 million, beating expectations by $25,600, and up 121% YoY. The company’s FFO came in at an adjusted 40 cents per diluted share, more than enough to support the company’s current dividend of 25 cents per share, which has been gradually increasing over the past 6 years and provides a yield of 5.77%. Despite BRT’s financial successes and high dividend yields, the stock is down 20% from its February peak. However, JMP analyst Aaron Hecht remains positive on Sunbelt-exposed portfolios and believes BRT’s unaffordability of homeownership in its markets makes the company’s units increasingly attractive. Hecht gives BRT shares an Outperform rating and a $28 price target, suggesting a 62% upside. BRT has a unanimous Strong Buy consensus rating among 4 recent analysts, with a $25.75 average price target indicating a 49% growth potential over the next 12 months.