Buy these cheap well-positioned stocks like Citi and Oracle, analysts say

Published Sat, Sep 19 20208:04 AM EDT

(This story is for CNBC PRO subscribers only.) The market endured another week of volatility, but analysts urged investors to remain calm and said there are still a wide range of quality opportunities to buy right now. CNBC Pro combed through Wall Street research to find inexpensive stocks to add to your portfolio. They include Citi , Oracle, Altice USA, Essex Realty Trust, CVS Health and Gilead . Altice USA "Simply too cheap," Pivotal Research analyst Jeffrey Wlodarczak said of buy-rated Altice. The firm lauded the company's excellent strategy during the coronavirus as it executed "best-in-class data/wifi" while still growing the business with further acceleration coming in 2021. In addition, the cable operator has "massive buyback wind at the back of the shares and the reasonable chance for a takeout of the company," Wlodarczak said. Altice recently entered in a joint bid with Canadian cable company Rogers to purchase Cogeco, another Canadian cable company and if that doesn't materialize Altice has no shortage of options, he said. "Our positive Altice investment thesis remains intact." The stock is down 4% this year. Citi Shares of the company were down 12% this week as reports surfaced on Monday that the company could be reprimanded by the Federal Government over its failure to properly implement risk management systems. Citi has been under scrutiny by investors and regulators ever since it accidentally made a $900 million payment to the creditors of Revlon last month. But "opportunity knocks" Morgan Stanley analyst Betsy Graseck said in a note to clients shortly after the incident. While spending would almost assuredly increase should the company be hit with regulatory action, the firm said it believes the stock is "still cheap with a one-year time horizon." Citi also has a new CEO taking over next year which the analyst says could bolster confidence and direction at the company. The stock should "outperform as credit, consumer spend and loan demand" continue to increase as the economy re-opens, she said. CVS Health The healthcare and pharmacy giant was initiated with an overweight rating by investment firm Piper Sandler this week. The company is "more than a drugstore," according to analyst Sarah James. Investors should take note that the stock is "cheap" and trading at a historical discount, she wrote, and digital solutions like its website are underappreciated. "We believe CVS' integrated assets, pharmacy benefit management (Caremark), health care benefits (Aetna), and the HealthHUB expansion strategy, brings together three critical pieces of the healthcare system," James said. The firm said the company, which acquired Aetna in 2018, is poised to deliver healthcare in ways no other company can. Simply put it's "well-positioned to transform healthcare access, quality, [and] reduce costs." Shares of the company were up almost 4% on the week. Oracle- JPMorgan, Overweight rating "Cheap and Showing Good Resilience; We Keep Estimates Above Consensus. ... .We are encouraged by FQ1 results; we don't see a dramatic trend change for Oracle, as some business slipped from the May quarter into the August quarter; the overall trajectory remains low, but is also showing good resilience coupled with fantastic margin expansion, with Op Margins up almost 300bps y/y. As we move past the COVID-19 impacts, we expect Oracle to continue to show resiliency as it starts to benefit from the favorable mix shift in its business and as such, we expect the multiple to rerate higher from current levels. Citi- Morgan Stanley, Overweight rating "Stock should outperform as credit, consumer spend and loan demand pick up. ... .C was down [12% this week) after a WSJ article suggested that regulators are preparing to issue a consent order requiring Citi to fix its risk management systems, after a manual error resulted in an accidental $900M. ... .While the uncertainty around the impact of a potential consent order could drive some near term volatility, we believe the stock is still cheap." Altice USA- Pivotal Research, Buy rating "Simply Too Cheap. ... .Our Positive Altice Investment Thesis Remains Intact- We view the set-up for ATUS stock positively driven by: 1)our view best-in-class cable data/wifi is nearly as important as food/water to households during (and after) the COVID pandemic, 2) at the 2Q peak of the COVID crisis Altice was still able to generate growth and we expect growth to accelerate through the balance of the year and accelerate further in '21. ... .ATUS remains the cheapest U.S. stock in our coverage list at 8.9X '21 FCF despite a solid outlook, massive buyback wind at the back of the shares and the reasonable chance for a takeout of the company." Essex Realty Trust- Truist, Buy rating "ESS faces challenging apartment fundamentals due to high unemployment, eviction moratoriums, potential additional rent control legislation, and concerns that work-from-home strategies will lead workers to live in cheaper markets. However, many of the reasons why one out of every eight Americans lives in California are still intact. The state remains woefully undersupplied in terms of housing – and we expect that supply/demand imbalance to drive relatively strong performance for ESS in the future, as it has in the past. Meanwhile, ESS trades its cheapest relative to peers in at least 15 years." Gilead Sciences- Jefferies, Buy rating "While the stock has traded between $65-85 during 2020 and is back at the lower end, [GILD CEO] O'Day has been doing positive things to support better fundamentals today than 2018-2019: (1) executed on HIV and advanced capsid and long-acting HIV drugs coming soon, (2) has generally been hitting numbers. ... .Our $78 PT is based on our view that GILD remains a cheap and low-expectation story that is getting better and can achieve even a 13x multiple on 2021 earnings which is still the lower end of biotech peers." CVS Health- Piper Sandler, Overweight rating "More than a drugstore. ... .CVS is well positioned to transform hc access, quality, reduce costs. Bullish on CVS' ability to leverage its improving tech, driving approp. interventions. CVS is cheap at ~7x (38% disc to hist), should benefit further from '21 $900M run rate target AET synergies & '22 run rate $1.5-2B savings, both on track. See good margin expansion potential. ... .We believe CVS' integrated assets, pharmacy benefit management (Caremark), health care benefits (Aetna), and the HealthHUB expansion strategy, brings together three critical pieces of the healthcare system."

Getty Images

(This story is for CNBC PRO subscribers only.)

The market endured another week of volatility, but analysts urged investors to remain calm and said there are still a wide range of quality opportunities to buy right now.

CNBC Pro combed through Wall Street research to find inexpensive stocks to add to your portfolio.