Best Value Stocks to Buy for July 23rd

Zacks highlights three Zacks Rank #1/value-tilted stocks—KB Home (KBH) with P/E 9.54 vs. industry 11.10 and 4.6% 60-day earnings estimate growth, Apogee (APOG) with P/E 12.78 vs. S&P 500 22.29 and 7.1% estimate growth, and Tenet Healthcare (THC) with P/E 15.02 vs. S&P 500 22.29 and 5.6% estimate growth. The article frames these as candidates that could benefit from positive earnings surprises, noting single-day stock moves of +10% to +20% historically after beats.

Analysis

This screen is more factor signal than standalone catalyst: the common thread is positive estimate revision momentum on already-cheap names, which can matter because low-multiple stocks usually need a visible inflection to rerate. KBH and THC have the cleanest near-term setup: if next quarter confirms the revision trend, the market can move from ‘cheap for a reason’ to ‘cheap with improving earnings power,’ which is where 1-2 turns of multiple expansion can happen quickly over 1-3 months.

The second-order read-through is sector rotation. In housing, KBH strength is relevant not just to peers like MTH and LEN but also to the homebuilding ETF complex (XHB/ITB) and building-product names; if affordability stabilizes, the market will pay up for names with better margin discipline rather than raw volume beta. APOG is more levered to nonresidential/replacement demand and could benefit if commercial retrofit spending stays firm, but it is also the most vulnerable to a macro air pocket because its valuation is still a cyclical discount, not a structural moat premium.

Contrarian view: the consensus may be overpaying for the revisions themselves. Consensus estimate drift can reverse fast if rates, utilization, or reimbursement commentary disappoints, and these names are not expensive enough for the market to ignore execution risk. The trade is not ‘buy cheap stocks’; it is ‘buy cheap stocks only if the next earnings/guidance print validates the revision trend.’

Key Decisions for Investors

• Long KBH on a pullback, 4-8 week horizon, targeting a rerating to the high end of its historical homebuilder multiple band if mortgage rates stay contained; risk/reward is attractive only if next quarter’s gross margin and order pace confirm the revision trend.
• Pair trade: long KBH / short XHB for a relative-value expression over the next earnings cycle; this isolates idiosyncratic estimate momentum versus the broader housing tape, and should be exited if KBH underperforms the ETF after the next print.
• Watchlist, not immediate buy: APOG for a 1-3 month setup tied to nonresidential construction resilience; require evidence of backlog conversion or upbeat guide before committing, because a macro slowdown would hit the stock harder than the screen implies.
• Long THC selectively into earnings only if payer mix and utilization remain stable; upside comes from multiple expansion off a discounted base, but the thesis is falsified quickly if reimbursement or volume commentary weakens.
• If 30-year mortgage rates re-accelerate or management guides down next quarter, cut KBH and de-risk the housing basket immediately; that would invalidate the revision-momentum trade rather than just delay it.