At a time when the S&P 500 is trading at a whopping 40.3 price-to-earnings (P/E) ratio, it is safe to say that much of the juice has already been squeezed out of top-tier growth stocks. Now is a prime time for yield-hungry investors to go on the hunt for bargains.
I think that Amwell (AMWL -0.99%), Barrick Gold (GOLD 1.88%), and 1-800-Flowers.com (FLWS -1.51%) are all businesses that fit into this category. Today, let's look at why the telemedicine company, gold miner, and online flower vendor are the top value stocks to buy this month.
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1. Amwell
Amwell is a telehealth provider with a market cap of just $4.2 billion. After accounting for its $1 billion cash balance and its lack of debt, its enterprise value amounts to just $3.2 billion. Amwell is the nation's No. 1 telemedicine company in terms of patient satisfaction. So why is its stock so cheap?
Investors are keeping a close eye on Amwell's guidance and don't think it has much growth left. This year, the company expects to generate around $265 million in revenue. Last year, sales surged 64.7% to $245.3 million.
The theory is that all of the gains made during the COVID-19 pandemic will be lost as patients switch back to in-person visits with their doctors. However, that is not likely to be the case. Three out of four Americans are interested in online consultations with their physicians in the future, compared to just 11% before the pandemic. It turns out Amwell may be a bit too conservative with its sales guidance.
Amwell's net losses for the year increased by 158% year over year to $228.6 million, but that's largely because the company is reinvesting its cash flow for growth. A part of the reason why patients like Amwell is its dedication to improving its platform. The company allocated more than $88.4 million of its revenue last year to research and development.
It serves 2,000 hospitals, 55 healthcare plan providers, and 36,000 employers across the country. Overall, I believe this will be a company that will under-promise and over-deliver on its guidance this year.
2. Barrick Gold
Barrick Gold is the second-largest mining company in the world, and its bottom line has skyrocketed due to a sudden surge in gold and copper prices in 2020 as people were reinvesting in relatively stable assets. Last year its revenue grew by 30% year-over-year to $12.595 billion. Meanwhile, its free cash flow increased by a remarkable 197% over the same period to $3.363 billion.
Due to these spectacular results, the company is giving $750 million worth of earnings back to investors in the form of dividends. This gives the stock an annual yield of 1.67%. What's more, the company has managed to generate enough profits to balance its $5.2 billion debt with the same amount of cash.
This year, the company expects to produce up to 4.7 million ounces of gold and 460 million pounds of copper, roughly in line with what it mined last year. Barrick Gold's mines currently have estimated reserves of 68 million ounces of gold and 13,000 million pounds of copper, sufficient to generate cash flows for more than a decade at current production rates. At just 15 times earnings, this is one bargain mining stock you don't want to miss.
3. 1-800-Flowers.com
1-800-Flowers.com is an e-commerce retailer of gourmet foods, gift baskets, and, yes, flowers. Customers can go to its easy-to-navigate website and have flowers delivered or gifted on the same day.
If the practice of giving flowers sounds too niche and old-fashioned to investors, you might be surprised to learn that there is actually a huge amount of demand. During Q2 2021 (ended Dec. 31), 1-800-Flowers.com grew its revenue by a remarkable 44.8% year over year to $877.3 million, while its earnings increased by 53.3% to $113.7 million.
What's more, 1-800-Flowers.com is now offering a wide selection of plants available for online shopping and delivery. That too is a booming market, as customers are increasingly turning to growing plants at home for stress relief amid the pandemic. Despite such excellent results, 1-800-Flowers.com is trading at just 0.9 times sales and 17 times earnings, making it one of the cheapest stocks in the entire tech sector.
