Momentum investors look for companies that are already on an upward trajectory in hopes that this trend will continue, while value investors look for companies whose fundamentals support a higher share price than is currently available in the market. While these core investment strategies are often positioned separately from each other, in some cases they work in tandem, making the investment even more compelling.
Finding companies with strong recent stock price growth that also have one or more value indicators flashing can be a little difficult, since a higher stock price usually means less attractive price-to-earnings or price-to-sales ratios. the cost of one share and so on. However, by the end of 2024, there will be several companies that will meet both of these criteria.
FOA: Stellar Q3 Report, Good Outlook
American corporate finance today
American company finance
(As of 12/06/2024 ET)
- 52 week range
- $4.10
▼
$27.89
- P/E ratio
- 1.71
- Target price
- $24.00
American Company Finance Inc. New York Stock Exchange: FOA is a financial services company that provides home equity conversion, reverse mortgages and similar products to retiree clients. As of December 5, 2024, the company had a low P/S ratio of 0.9 and a trailing P/E ratio of 1.8. In the month leading up to this date, FOA shares jumped 51.7%, bringing the trailing twelve month return to just under 144%.
Part of November’s growth is likely due to the company’s excellent third-quarter earnings report, released on the 6th of the month. Finance of America noted net income from continuing operations of $204 million, a sharp positive swing after posting losses in that area of $172 million and $5 million in the third quarter of 2023 and the second quarter of 2024, respectively. Adjusted earnings per share also moved in a positive direction, with the most recent figure of 67 cents beating consensus expectations by an impressive 54 cents per share. Total revenue of $290 million for the quarter also beat analysts’ estimates.
The return to profitability has had a positive impact on balance sheet equity, which ended the September quarter at $456 million. All of this positions Finance of America exceptionally well positioned for uncertain times in the real estate and mortgage markets in the coming year. Indeed, if the real estate market does become more volatile – and homeowners look for new ways to secure financing for shared expenses – it could be a boon for this firm.
KINS: Significant Turnaround and Significant Rally
Kingstone Companies Today
Kingston companies
(As of 12/06/2024 ET)
- 52 week range
- $1.95
▼
$17.77
- P/E ratio
- 12.65
- Target price
- $6.50
Kingston Companies Inc. NASDAQ: KEENS is a property and casualty insurance company that is in some ways an example of an impulse stock. KINS stock is up 520% over the past year and was trading at a 52-week high as of December 5, 2024. After reaching nearly $12 a share in August, Kingstone shares fell slightly and hovered around $9.50 for several weeks. However, since the beginning of November, shares have been growing more or less steadily.
Given the significance of Kingstone’s stock performance over the past year, it would be easy to assume that the stock is significantly overvalued at this stage. However, the company’s P/E ratio of 12.1 is in line with many competitors in the insurance industry, and its P/S ratio of 1.4 is competitive. After a series of losses in 2023, the company has a new CEO and recently reported sharp increases in both new business policies and premiums for its personal lines. If these trends continue, Kingstone could be on track to beat its record share price of nearly $22, set in 2018.
HUT: Share price nearly triples thanks to profitability
Hut 8 today
(As of 12/6/2024 6:03 PM ET)
- 52 week range
- $6.18
▼
$31.95
- Target price
- $30.17
Given the rapid rise in prices of Bitcoin and other cryptocurrencies towards the end of the year, it is not surprising that cryptocurrency mining and data center company Hut 8 Corp. NASDAQ: HIT also brought benefits. Hut 8 shares are up about 174% over the past year as of Dec. 5. In early December, the company also announced a go-to-market program and a $250 million share repurchase project as a means of controlling volatility.
Hut 8 only recently became profitable, reporting net income of $0.9 million for its most recent quarter. And while it doesn’t have the competitive valuation metrics of FOA or KINS discussed above, the company’s P/S ratio of 21.8 is competitive in the fast-growing digital asset industry.
Of course, Hut 8 and other cryptocurrency-related companies pose a higher level of risk than firms in many other industries due to the volatility in the crypto space. However, many in the digital currency world view the political and regulatory environment in 2025 and beyond as likely to be favorable, which has helped drive many tokens to all-time highs.
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