Sometimes the smartest stocks to buy now aren’t the ones making headlines, but those that are on sale and have compelling valuations.
Among the stocks that should be on your radar now are Thor Industries (THO)
and Equinor (EQNR)
If you’ve ever heard of Airstream, Jayco, or Starcraft, you’re already a bit familiar with what THOR Industries does.
Thor Industries (THO)
was founded way back in 1980 when two investors acquired Airstream. THOR went on to purchase the Canadian company General Coach, a manufacturer of trailers and fifth-wheels. In 1986, THOR went public and was named as one of Forbes’ top 200 small companies.
On a roll, THOR went on to acquire two bus manufacturers, Eldorado Bus and National Coach, which were rebranded as Eldorado National.
During the 1990s, THOR continued on its acquisition path, purchasing Four Winds, Dutchmen, and Komfort Corporation.
Today, although it has exited the bus company business, THOR counts among its companies the 24-brand Erwin Hymer Group (EHG), one of Europe’s largest makers of recreational vehicles, as well as Tiffin Motorhomes. THOR now has a global footprint, and it’s making the most of it.
Is Thor on Sale?
Trading at just 8.2x EV/EBITDA, Thor is arguably on sale at the moment. The company grew revenues by over 50% last year and is forecast to grow top line sales from $12.3 billion to $16 billion over the coming year.
No matter what valuation multiple you examine, Thor has a compelling story. Its Enterprise Value / Revenue is just 0.7x, meaning it’s valued at under 1x sales.
Thor’s Price-to-earnings ratio is a modest 11.9x, which is enticing for value investors.
Perhaps the only multiple that seems lofty right now is the company’s Enterprise Value/Free Cash Flow which is 33x.
From a discounted cash flow forecast analysis viewpoint, Thor Industries has tremendous upside of over 73% to intrinsic price per share of $134.10.
Imagine an energy company dedicated to becoming net-zero by 2050. That’s what you’ll find in Equinor (EQNR)
, a Norwegian energy giant, formerly known as Statoil.
The name change was informed by the company’s transition from a petro-fuel company to a company providing a variety of sustainable energy solutions. Equinor is a huge company, with 21,000 employees in more than 30 different countries.
Equinor is a global firm with a huge presence in the U.S. It’s taking advantage of the current administration’s dedication to alternative energy and has a goal of creating wind farms off of the east coast and the Carolinas. Future locations include the Central Atlantic, Gulf of Main, Gulf of Mexico, and offshore of Oregon.
While the company still directs significant resources into oil and gas exploration and pumping, it also has a keen interest in hydrogen. Equinor is focusing on Appalachia, which has not only an abundance of natural gas but also a skilled workforce.
Equinor has a large presence in the European Union and the recent sanctions against Russia (including oil and gas) will only boost its potential for success. Equinor is banking on becoming one of the primary energy resources for the E.U.
Equinor Upside > 46%
With a remarkable 94 percent revenue growth year over year, ignore Equinor at your own peril.
The company has an EV/Revenue of 1.3x, EV/EBITDA of 2.7x and P/E ratio of just 13.7x.
Trading at just 3x book value, Equinor is attractive at these levels.
Applying a discounted cash flow forecast analysis, Equinor has 47.4% upside to fair value of $52.94 at the time of research.
President and CEO Anders Opedol has been with the company since 1997 when he joined Statoil as a petroleum engineer. Since then, he’s been on an upward track with the company, holding positions in tech, operations, and leadership. CFO Ulrica Fearn is a native Swede and lives in Norway.
With its home office in Norway, Equinor has operations in 30 countries around the world, including Norway, North and South America, Africa, Asia, Europe, and Oceania.
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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.