7 Growth Stocks That Are Trading at a Bargain Price

April 4, 2023

in Stocks

Reading Time: 8 mins read

Advance Auto Parts (AAP)

A businessman holding a coin with a tree that grows and a tree that grows on a pile of money representing growth stocks

Source: MEE KO DONG / Shutterstock

There was a notable item in the last reading of the Consumer Price Index (CPI) that should be bullish for Advance Auto Parts (NYSE:AAP). Specifically, the price of used cars went up. This was a reversal of a downward trend that started in the fall of 2022.

That makes it likely that more investors may hold off on making that car purchase and instead apply some of their tax refunds to keeping their existing car in working order. That would certainly justify buying AAP stock which has tumbled over 40% in the past 12 months.

But even if revenue and earnings don’t significantly improve from 2022 levels, the stock looks undervalued and oversold. At around 14x earnings, AAP stock is trading at a discount. Buying the stock now gets you an attractive dividend with a yield of over 5%. The payout ratio is over 70% which means there is some concern that the dividend may get cut a little. But with the growth of over 192% in the last three years, investors are still likely to get a nice payout.