XPO Logistics Inc (XPO), Restoration Hardware Holdings Inc (RH): Top Value Stocks for the Next Six Months

Page 1 of 2

XPO Logistics Inc (NYSE:XPO)

What are the best opportunities for the second half of 2013 — and why is there so much upside? Rather than my “Value of the Month” article, I am focusing on five stocks that are all presenting deep value and large upside for the second half of 2013.

Value of the decade!

Last year, I called XPO Logistics Inc (NYSE:XPO) my value of the decade because of its unappreciated stock price mixed with its large growth potential. It is a rapidly growing company: Last quarter, its revenue increased 155% year-over-year.

In the last 12 months, the company has generated revenue of $348 million, almost 100% greater than 2011. For 2014, revenue is expected to be a billion, and then $5 billion within the next few years.

The company’s growth is due to an aggressive acquisition and cold start strategy, and up until now, the company has been relatively unknown. However, in the last month, it has seen its valuation increase 10%, and with such a rapid growth plan, I see few scenarios where the company maintains its $330 million market capitalization.

Overall, XPO Logistics Inc (NYSE:XPO) has one of the best unmeasured fundamental strengths in its favor, and that is its management. Its CEO, Bradley Jacobs, has started and built four billion dollar companies in his career, and has hired an all-star team of executives from the likes of Goldman Sachs Group, Inc. (GS) and C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW). With that said, I like the company’s chances to trade higher in the second half of the year, especially being less than $1 from new highs.

A good start, but an even better finish!

Restoration Hardware Holdings Inc (NYSE:RH) has rallied 120% in 2013, but I still believe there is significant room to run even higher.

This is a company that is growing by 35% year-over-year, and is doing so without expansion, but rather same store sales growth. At just 2.3 times sales, I think the stock is cheap, and considering it has just $1.3 billion in sales over the last 12 months, I think there is still a considerable amount of room to grow.

At its current value, Restoration Hardware Holdings Inc (NYSE:RH) is cheaper and is growing significantly faster than Lumber Liquidators. With that said, I think continued growth, and the expectations of upcoming store expansion will lift this stock even higher into the second half of 2013.

Changing sentiment to reflect growing fundamentals

You might think that all upside is priced in for Ford Motor Company (NYSE:F), due to its new 52-week highs and its 76% gain over the last year. But what about the fact that it is trading flat since January 2011, despite significant year-over-year fundamental gains? To me, this indicates that more upside is to come!

In the past, investors were constantly worried of another recession. For the last four years, the recovery has been slower than anticipated and during the recession, the auto industry was deeply affected by the weakness.

In my opinion, the market has remained highly skeptical despite strong performance from the auto space. However, with double-digit revenue and unit sales growth year-over-year to compliment a 2.5% dividend and a stock trading at just 0.50 times sales, I don’t see how the market can disregard Ford Motor Company (NYSE:F)’s performance. Thus, I think this value stock would trade even higher in the final six months of 2013.

The other post-recession laggard, and its upside

Much like the auto industry, banks have been highly susceptible to fears of a new recession. Thus, the industry is yet to fully recover from the debt downgrades of August 2011, as investors have been slow to buy.

Certain financial companies such as Citigroup Inc. (NYSE:C) and Bank of America Corp (NYSE:BAC) remain massively undervalued, while others such as JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo & Co (NYSE:WFC) have climbed back above pre-recession highs. With that said, I really like Bank of America and the fact that it is trading at just 65% of its book value per share.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!