Top Jefferies Value Stocks to Buy as Market Rally Lifts Prices

Investing

Published: March 15, 2016 8:25 am

Last Updated: January 13, 2020 11:57 am

One thing is for sure, most equity investors were relieved to see a very strong rally to end last week. While the talk of a recession right around the corner looks to be very premature, the fact that the bull market is getting long in the tooth is probably not. All the more reason for investors to look for value stocks that have solid upside potential and solid valuation.

The team at Jefferies has an extensive list of top value calls, including the companies that were removed from the firm’s Franchise Picks last week. We found four companies on this week’s list that make good sense for investors looking for solid value ideas. All are rated Buy at Jefferies.

Nucor

This top steel company could do very well if the economy sees a solid pickup. Nucor Corp. (NYSE: NUE) and its affiliates are manufacturers of steel products, with operating facilities primarily in the United States and Canada. It is also North America’s largest recycler.

Nucor products produced include: carbon and alloy steel — in bars, beams, sheet and plate; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating and expanded metal; and wire and wire mesh. Through David J. Joseph Company, Nucor also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap.

While the residential construction market could slow down some in 2016 after years of a very torrid pace, top Wall Street analysts remain positive on nonresidential commercial construction. Nucor always has kept a very conservative balance sheet, and it is poised for slow, but steady growth next year and beyond.

Nucor investors are paid a very solid 3.38% dividend. The Jefferies price objective for the stock is $45, and the Thomson/First Call consensus target is higher at $45.94. The stock closed on Monday at $45.15.