High growth stocks tend to trade at a premium because of the long-term returns they offer to investors. Therefore, when it is rare to come across a stock that seems relatively undervalued whilst offering exciting growth prospects. Here are two that fit that profile.
Nucor Corp
Nucor Corp (NYSE:NUE) manufactures steel and steel products, an industry significantly affected by the pandemic.
However, with the US allocating a significant budget to infrastructure, spread over a 5-year period, a resurgence in the construction sector could be on the cards.
Nucor trades at a compelling P/E ratio of 6.67 whilst offering EPS growth prospects of about 36% per year, over the next five years.
Therefore, this looks like a rare opportunity to add a quality stock that could benefit from the resurgence of the US manufacturing sector.
Source – TradingView
Technically, the stock seems to be trading within an ascending channel formation in the intraday chart.
Therefore, investors could target extended gains at about $118.11, or higher at $122.85, while $108.95 and $104.53 are support levels.
Steel Dynamics
Steel Dynamics Inc. (NASDAQ:STLD) is a producer and recycler of steel products. Like Nucor Corp, the company could benefit significantly from the US budget allocation to Infrastructure, announced in June 2021.
The stock trades at an exciting forward P/E ratio of 4.59 making it a compelling option for investors. In addition, Steel Dynamics earnings are forecasted to grow at an annual rate of more than 36% over the next five years.
Source – TradingView
Technically, the stock seems to have recently bounced off the trendline support of a descending channel formation.
Therefore, investors could target breakout profits at about $64.10, or higher at $66.27, while $59.28 and 456.97 are crucial support zones.
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