Investing

4 Stocks That Look Like Dirt Cheap Picks to Add for 2018

Oracle

This top software stock was hit hard recently and is offering a very good entry point. Oracle Corp. (NYSE: ORCL) develops, manufactures, markets, sells, hosts and supports database and middleware software, application software, cloud infrastructure, hardware systems and related services worldwide.

The company licenses its Oracle Database software to customers, which is designed to enable reliable and secure storage, retrieval and manipulation of various forms of data. Its Oracle Fusion Middleware software aims to build, deploy, secure, access and integrate business applications, as well as automate their business processes.

The company reported mixed results recently but the analysts remain positive, noting this:

Oracle reported earnings last week. Aggregate results were strong but Cloud revenue and cash flow were lighter than anticipated and the stock was off 6%. We believe management’s Feb quarter Cloud guide should prove more accurate and is conservative. We believe business momentum in the field continues to build and will translate into meaningful cash flow growth over time.

Shareholders of Oracle are paid a 1.59% dividend. The $61 Jefferies price target compares with the posted consensus target of $55.83. The stock closed Monday at $47.71 a share.

Stericycle

Jefferies feels this company could see a large benefit from potential tax reform. Stericycle Inc. (NASDAQ: SRCL) collects and processes regulated and specialized waste for disposal services, as well as collects personal and confidential information for secure destruction. It offers regulated solutions for medical waste disposal, pharmaceutical waste disposal and hazardous waste management; sustainability solutions for expired or unused inventory; and secures information destruction of documents and e-media.

The company’s compliance solutions comprise Steri-Safe and clinical services programs for training and consulting; inbound/outbound communications; data reporting; and other regulatory compliance services.

The company also provides reusable sharps disposal management services, an integrated waste stream solutions program and regulated recall and returns management services for expired or recalled products. The company serves health care businesses, including hospitals, physician and dental practices, outpatient clinics and long-term care facilities, as well as retailers and manufacturers, financial and professional service providers, governmental entities and other businesses.

The shares are down 40% in the last two years, and may be offering value investors an incredible bargain. The analysts pointed out:

We conducted an analysis of the company’s competitive pricing data and found that the company will need to concede $120 million-$150 million in SQ price, which compares to management’s $130 million estimate and is well below some estimates we’ve seen of closer to $365 million. Our worst case scenario assumes $165-$175 million. The company is midway through pricing resets and thus far has had 90-95% client retention.

Jefferies has set its price target at $83. The consensus target is lower at $78, and shares closed Monday at $67.83.

Four stocks that look like far better choices for 2018 than high-flying momentum companies. All make sense for investors looking to rotate to companies that are more of a value proposition but still offer solid alpha potential.

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