Top 5 Extreme Value Stocks To Buy Now

In this article, we discuss the top 5 extreme value stocks to buy now. If you want to see more stocks in this selection, check out Top 10 Extreme Value Stocks To Buy Now. 

5. Warrior Met Coal, Inc. (NYSE:HCC)

Number of Hedge Fund Holders: 24

Warrior Met Coal, Inc. (NYSE:HCC) is an Alabama-based company that produces and exports non-thermal metallurgical coal for the steel industry. Warrior Met Coal, Inc. (NYSE:HCC) is one of the top extreme value stocks to consider. On November 2, the company announced a Q3 GAAP EPS of $1.90 and a revenue of $371.94 million, beating market estimates by $0.06 and $1.2 million, respectively. Revenue over the period climbed approximately 84% on a year-over-year basis. 

On November 3, BMO Capital analyst David Gagliano raised the price target on Warrior Met Coal, Inc. (NYSE:HCC) to $39 from $30 but kept a Market Perform rating on the shares. The company’s Q3 results were “solid,” said the analyst as he raised his FY22 EPS view to $14.24 from $13.53. Warrior Met Coal, Inc. (NYSE:HCC) remains positioned to benefit if met prices stay robust, the analyst told investors in a research note.

According to Insider Monkey’s data, 24 hedge funds were long Warrior Met Coal, Inc. (NYSE:HCC) at the end of Q3 2022, and Jim Simons’ Renaissance Technologies held the largest stake in the company, consisting of 1.6 million shares worth $45.3 million. 

Here is what Horos Asset Management has to say about Warrior Met Coal, Inc. (NYSE:HCC) in its Q3 2021 investor letter:

“In addition, we trimmed our stake in the U.S. company Warrior Met Coal (“Warrior”), following its excellent recent performance. The metallurgical coal producer, which is necessary to produce steel in blast furnaces, benefited during the quarter from the sharp rise in the price of this commodity. Specifically, the price of Warrior’s metallurgical coal, referenced to Australia’s Premium Low-Vol FOB Hard Coking Coal, rose by 100% in the quarter and is up 300% from the lows of the beginning of the year, when it was trading at around 100 dollars per tonne. The reason for the huge price increase can be found in the bottleneck that this industry is experiencing, due to a few factors. On the one hand, the recovery of economic activity after the worst of the pandemic ended and the extra boost given by the huge fiscal and monetary stimuli from governments globally and, on the other hand, the lack of investment in new supply in recent years due to the hangover from previous overcapacity, the poor situation of some players in the industry and, especially, the political and social agenda against climate change.

This rise in the price of metallurgical coal has seen Warrior’s share price appreciate by more than 70% from last summer’s lows, contributing significantly to our fund’s performance. However, the downside of the story is that Warrior has had the bulk of its employees on strike since April, which means that the company is not producing at one of its two mines and the other is not at 100% capacity, so it is not benefiting from the current positive dynamics like other players in the industry.”

4. Tri Pointe Homes, Inc. (NYSE:TPH)

Number of Hedge Fund Holders: 25

Tri Pointe Homes, Inc. (NYSE:TPH) is a California-based company that engages in the design, construction, and sale of single-family attached and detached homes in the United States. The company operates six brands – Maracay in Arizona, Pardee Homes in California and Nevada, Quadrant Homes in Washington, Trendmaker Homes in Texas, TRI Pointe Homes in California, Colorado, and the Carolinas, and Winchester Homes in Maryland, Virginia, and the District of Columbia. 

On October 27, Tri Pointe Homes, Inc. (NYSE:TPH) reported a Q3 GAAP EPS of $1.45 and a revenue of $1.06 billion, outperforming Wall Street consensus by $0.22 and $50 million, respectively. For the fourth quarter of 2022, Tri Pointe Homes, Inc. (NYSE:TPH) anticipates delivering between 1,700 and 1,900 homes at an average sales price of between $700,000 and $715,000. 

Riley analyst Alex Rygiel on October 18 maintained a Neutral rating on Tri Pointe Homes, Inc. (NYSE:TPH) and lowered the price target on the shares to $17 from $20. The analyst believes the “rapid and significant increase” in mortgage rates has and will lead to another drop in new home sales, pricing/incentives, and margins, leading to an even more challenging 2023 than priorly expected by homebuilders and investors. 

According to Insider Monkey’s Q3 data, 25 hedge funds were bullish on Tri Pointe Homes, Inc. (NYSE:TPH), compared to 20 funds in the earlier quarter. Greg Poole’s Echo Street Capital Management is the leading stakeholder of the company, with 7.17 million shares worth $108.3 million. 

Here is what Third Avenue Management Small-Cap Value Fund has to say about Tri Pointe Homes, Inc. (NYSE:TPH) in its Q4 2021 investor letter:

“Single-Family (4.0% of assets): Tri Pointe Holdings own highly attractive land assets in supply constrained geographies. The company have taken advantage of the single-family housing boom by monetizing assets at attractive prices despite a challenged cost environment. Tri Pointe’s exceptional asset quality coupled with insatiable demand for residential housing should allow them to grow intrinsic value despite higher costs and supply chain delays industrywide.”

3. M/I Homes, Inc. (NYSE:MHO)

Number of Hedge Fund Holders: 26

M/I Homes, Inc. (NYSE:MHO) operates as a builder of single-family homes in Ohio, Indiana, Illinois, Minnesota, Michigan, Florida, Texas, North Carolina, and Tennessee. The company operates through Northern Homebuilding, Southern Homebuilding, and Financial Services segments. The company posted a Q3 GAAP EPS of $4.67, outperforming Wall Street estimates by $0.62. M/I Homes, Inc. (NYSE:MHO) is one of the best extreme value stocks to monitor. 

On October 27, Wedbush analyst Jay McCanless reiterated an Outperform rating on M/I Homes, Inc. (NYSE:MHO) but trimmed the price target on the shares to $63 from $83 following the Q3 results. While the analyst is not forecasting huge scale impairments, he believes it is unrealistic to expect a near doubling in M/I Homes, Inc. (NYSE:MHO)’s stock price in a rising rates backdrop.

According to Insider Monkey’s data, 26 hedge funds were long M/I Homes, Inc. (NYSE:MHO) at the end of September 2022, compared to 23 funds in the earlier quarter. Israel Englander’s Millennium Management is the biggest stakeholder of the company, with 450,578 shares worth $16.3 million. 

2. Atkore Inc. (NYSE:ATKR)

Number of Hedge Fund Holders: 27

Atkore Inc. (NYSE:ATKR) is headquartered in Harvey, Illinois, and the company engages in the manufacture and sale of electrical, safety, and infrastructure products in the United States and internationally. Atkore Inc. (NYSE:ATKR) offers conduits, cables, and installation accessories. It is one of the premier extreme value stocks to invest in. 

On November 18, Atkore Inc. (NYSE:ATKR) reported a FQ4 non-GAAP EPS of $5.52 and a revenue of $1.03 billion, topping Wall Street estimates by $0.44 and $48.2 million, respectively. The company provided a long-term fiscal 2025 adjusted net income per diluted share target of more than $18. 

RBC Capital analyst Deane Dray on November 21 raised the price target on Atkore Inc. (NYSE:ATKR) to $136 from $110 and maintained an Outperform rating on the shares.

Among the hedge funds tracked by Insider Monkey, Atkore Inc. (NYSE:ATKR) was part of 27 public stock portfolios at the end of the third quarter of 2022, and Jeffrey Gates’ Gates Capital Management is the largest position holder in the company, with 1.11 million shares worth $86.4 million. 

1. Cowen Inc. (NASDAQ:COWN)

Number of Hedge Fund Holders: 27

Cowen Inc. (NASDAQ:COWN) is one of the best extreme value stocks to consider. The New York-based company provides investment banking, research, sales and trading, prime brokerage, global clearing, securities financing, commission management, and investment management services in the United States and internationally. On October 28, Cowen Inc. (NASDAQ:COWN) declared a $0.12 per share quarterly dividend, in line with previous. The dividend is distributable on December 15, to shareholders of record on December 1. 

On November 15, Cowen Inc. (NASDAQ:COWN) announced that its stockholders approved the previously announced definitive agreement for Cowen Inc. (NASDAQ:COWN) to be acquired by The Toronto-Dominion Bank (NYSE:TD) in an all-cash transaction valued at approximately $1.3 billion, or $39 per share of Cowen’s common stock. The transaction is forecasted to conclude in the first calendar quarter of 2023. 

According to Insider Monkey’s Q3 data, 27 hedge funds were bullish on Cowen Inc. (NASDAQ:COWN), compared to 19 funds in the last quarter. Alec Litowitz and Ross Laser’s Magnetar Capital is the largest stakeholder of the company, with 1.6 million shares worth $63 million. 

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