3 shares of extraordinary value to buy for 2021

If you think that the practice of value investing has been made redundant by the emergence of high growth tech stocks, you are wrong. In an overvalued stock market and near zero interest rates, yield-hungry investors are increasingly turning to value stocks for better returns.

Retailer actions Bed bath and beyond (NASDAQ: BBBY), ad-tech company Criteo (NASDAQ: CRTO), and pot cultivator Cresco Laboratories (OTC: CRLBF) have provided astonishing returns of 270% to 382% to investors over the past year. Today, let’s see why they are still inexplicably at discounted valuations and how they can still enrich shareholders.

1. Bed bath and beyond

Trading at just 0.4x futures revenue, Bed Bath & Beyond appears to be another physical business that investors believe will fall under the wrath of the e-commerce giant. Amazon and his fellows. Indeed, during the third trimester of In 2020 (ended November 28), Bed Bath & Beyond sales were down 5% year-over-year to $ 2.618 million.

However, if we were to dig deeper, we would find that its decline in revenue is mainly due to the closure of 120 of its unprofitable stores. Its comparable store sales actually increased by 5% compared to the same period last year, while its e-commerce segment grew by an astonishing 94% during this period. Its namesake app has a rating of 4.8 / 5 on AlphabetGoogle Play, with 42,400 reviews.

Sales of kitchen appliances, cooking utensils, bedding and bath products, and home decorations have all seen remarkable increases, with around a third of the company’s revenue now coming from online orders. . In addition, its gross margins increased 3.1 percentage points from Q3 2019 to 35.4%.

Bed Bath & Beyond is also surprisingly profitable, generating $ 244 million in operating cash flow in the quarter while paying off $ 500 million of its $ 3.6 billion debt. Facing low liquidity risk, the company is also allocating $ 825 million to repurchase its shares with the aim of increasing earnings per share. Given its fantastic performance despite a tough environment, this is a resilient retail stock that you don’t want to miss out on.

2. Criteo

These days, it’s almost unheard of for investors to buy tech companies for 2.3 times their earnings – but that’s precisely what Criteo stock has to offer. Over the past decade, the company has been making banks using third-party cookies in web browsers to track consumer behavior and serve them with advertisements on behalf of advertisers. The practice, known as ad retargeting, is in danger of becoming completely obsolete as Google Chrome, Safari, and Firefox have all banned third-party cookies on their platform, citing privacy concerns.

As a result, many investors believed that Criteo’s business was doomed and that its stock was on a slow but safe path to zero. Against all odds, however, the company plans to increase revenue by around 5% this year. In 2020, Criteo still had a staggering revenue of $ 2.07 billion and free cash flow of $ 120 million.

Seeing the aforementioned existential threat, Criteo made the smart decision to diversify its business by avoiding retargeting. It is now developing software solutions that can help its customers improve their media outreach, boost the volume of e-commerce, optimize their products on search engines, etc. Finally, and perhaps ironically, it is now embarking on data rights management, offering solutions to protect consumers. ‘privacy while browsing the web.

This year, Criteo’s non-retargeting operations will account for nearly 20% of its overall revenue, and the segment is growing by more than 50% year on year. The company has incurred no debt in pursuing these new ventures, and it still has an impressive $ 530 million in cash on its balance sheet. For investors looking for a low cost tech company with excellent finances and impressive growth, Criteo is an attractive bet.

3. Cresco Labs

Last year, wholesale marijuana distributor Cresco Labs increased sales by 271% annually to $ 476.3 million. It also managed to break even in terms of profit before tax, compared to a loss of $ 50.8 million to the same extent last year.

There are now over 830 dispensaries offering Cresco marijuana. The company also operates 19 dispensaries across the United States; that number will rise to 33 this year after its $ 371 million in acquisitions of Bluma Wellness and culture, which are in the top two for market share of the medical cannabis industry in Florida and the recreational cannabis industry in Massachusetts, respectively.

Surprisingly enough, the company only trades 3.5 times its forward revenue despite its incredible growth trajectory. This is definitely a top-notch jar wholesaler that you don’t want to miss out on.