In this article we will take a look at the 5 undervalued cyclical stocks for 2021. For a detailed analysis of these companies, go directly to the 12 Undervalued Cyclical Stocks for 2021.
5. Superior Group of Companies, Inc. (NASDAQ: SGC)
Number of Hedge Fund Holders: 5
Superior Group of Companies, Inc. (NASDAQ: SGC) is a Florida-based firm that manufactures and sells apparel and accessories. It was founded in 1920 and is placed fifth on our list of 12 undervalued cyclical stocks for 2021. Some of the products that the firm makes include uniforms, corporate identity apparel, career apparel, and accessories for personnel of hospitals and health facilities, among others. It also has stakes in the telemarketing business.
In early November 2020, Superior Group of Companies, Inc. (NASDAQ: SGC) said that it had filed a prospectus for $120 million worth of mixed shelf offering. The firm launched a secondary offering of 750,000, detailing that the money would be used for general corporate purposes. In February this year, the firm declared a quarterly dividend of $0.1 per share, in line with estimates.
Out of the hedge funds being tracked by Insider Monkey, Greenwich-based investment firm Steamboat Capital Partners is a leading shareholder in the firm with 138,542 shares worth more than $3.2 million.
4. Fisker Inc. (NYSE: FSR)
Number of Hedge Fund Holders: 18
Fisker Inc. (NYSE: FSR) is a Manhattan Beach-based company that makes electric vehicles.The firm is aiming to set itself apart from the competition by producing vehicles that go more miles on a single charge, a car it has said it is presently working on, as well as EVs made from sustainable products like recyclables. Fisker Ocean, one of the products marketed by the firm, is expected to begin production in 2022. Fisker was founded in 2016 and is ranked fourth on our list of 12 undervalued cyclical stocks for 2021..
Fisker Inc. (NYSE: FSR) was rated Overweight by investment bank Morgan Stanley last week after the bank forecast a strong quarter for electric vehicle makers as the economy reopened in China and the United States, increasing the demand for EVs that had fallen during the pandemic in 2020.
At the end of the fourth quarter of 2020, 18 hedge funds in the database of Insider Monkey held stakes worth $146 million in the firm, up from 17 in the preceding quarter worth $132 million.
3. Lumber Liquidators Holdings, Inc. (NYSE: LL)
Number of Hedge Fund Holders: 17
Lumber Liquidators Holdings, Inc. (NYSE: LL) is a Virginia-based company that provides hardwood flooring and other related services in the United States. It was founded in 1994 and is placed third on our list of 12 undervalued cyclical stocks for 2021. Some of the services that the company offers include hardwood species, engineered hardwood, laminate, resilient vinyl, water-resistant vinyl plank, and porcelain tile flooring products.
Lumber Liquidators Holdings, Inc. (NYSE: LL) has a market cap of over $719 million and posted annual revenue of $1.1 billion in 2020, up slightly from $1.09 billion posted the year before. The firm saw its share price jump more than 9% in November 2020 after it posted encouraging quarterly results despite the pandemic situation.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in the firm with 895,094 shares worth more than $27 million.
2. Haverty Furniture Companies, Inc. (NYSE: HVT)
Number of Hedge Fund Holders: 15
Haverty Furniture Companies, Inc. (NYSE: HVT) is a Georgia-based retail furniture company. It offers upholstery products and eclectic looks, as well as mattress products. The company operates through retailers, third-party sellers and has an online presence as well. It runs more than 100 shops in different US states. The company was founded in 1885 and is placed second on our list of 12 undervalued cyclical stocks for 2021.
Haverty Furniture Companies, Inc. (NYSE: HVT) declared a quarterly dividend of $0.22 per share on February 22, in line with estimates. The company has reported strong growth in the last two quarters and will benefit as the economy reopens and spending on retail increases.
At the end of the fourth quarter of 2020, 15 hedge funds in the database of Insider Monkey held stakes worth $68 million in the firm, up from 14 in the preceding quarter worth $52 million.
1. The TJX Companies, Inc. (NYSE: TJX)
Number of Hedge Fund Holders: 68
The TJX Companies, Inc. (NYSE: TJX) is a Framingham-based multinational company that sells clothing. The famous brand names for the firm include Marmaxx, HomeGoods, TJX Canada, and TJX International. It operates more than 3,500 stores in the US and thousands more across the world, primarily in Australia and Canada. The company was founded in 1956 and is placed first on our list of 12 undervalued cyclical stocks for 2021.
The TJX Companies, Inc. (NYSE: TJX) is one of the biggest retailers that could expect a strong comeback from the reopening of markets and stores as the vaccine rollout allows people to venture out in public spaces. On March 30, the company declared a quarterly dividend of $0.26 per share, in line with previous estimates.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Alkeon Capital Management is a leading shareholder in the firm with 6 million shares worth more than $416 million.
Giverny Capital, in their Q1 2021 investor letter, mentioned The TJX Companies, Inc. (NYSE: TJX). Here is what Giverny Capital has to say about The TJX Companies, Inc. in their Q1 2021 investor letter:
“We’re pretty happy with the current portfolio and so were not very active during the quarter. Our only consequential decision in the first quarter was to exit the off-price retailer The TJX Companies in January. My prior firm owned TJX for most of the past 20 years and enjoyed appreciation on the order of 20 times the original purchase price.
TJX is a great company, but the growth rate has slowed in recent years and the operating margin has been under pressure, mainly from rising wages for store workers. When the pandemic hit, I bought the stock for GCAM in the belief that if the US fell into a prolonged recession, TJX would be a winner because of its extreme value position.
The US didn’t fall into a prolonged recession. Rather, many consumers are flush with cash thanks to government relief programs. But brick-and-mortar stores are losing out to online competitors for reasons of safety and convenience. TJX has fared much better than most of its competitors during this time and should continue to do so, thanks to its model of buying inventory close to need and reacting to what is happening in the marketplace rather than trying to create hot product. But the stock rose about 50% in the few months we owned it and that increase seemed to price in a complete recovery and more. We sold in early January.”
You can also take a peek at 10 Best Travel Stocks to Buy Right Now, and 10 Best Automotive Stocks to Invest in Now.
