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These buy-rated stocks are expected to generate loads of cash and are cheap, Barclays says

As investors search for quality stocks after a choppy month for equities, Barclays has some buy-rated picks that are cheap and expected to generate lots of cash. On Tuesday, stocks struggled to find a direction in the final day of trading in May. All month, stocks have logged some wild moves, with the S & P 500 briefly dipping into bear market territory. All three major averages remain well off their highs with the Dow Jones Industrial Average about 11% below its record, the S & P 500 down more than 14%, and the Nasdaq off by roughly 26%. In a research note over the weekend, Barclays surfaced overweight-rated names that look like bargains when investors consider each company’s expected cash flow over the next two years. Analysts estimate these companies will have a free cash flow yield of at least 8% through the end of next year, which would put them into the top quintile within the S & P 500. The stocks on the list also could show at least 10% upside to their price targets and each member of the group touts a market value of at least $1 billion. Barclays found 23 stocks that fit its criteria; here are 12 of those names. Shares of Dick’s Sporting Goods seem cheap even after the sporting goods retailer lowered its financial outlook for the year last week. The stock has fallen nearly 29% since the start of the year. Dick’s CEO Lauren Hobart has maintained confidence in the company’s business strategy and expects shoppers are increasingly adopting outdoor hobbies that will stick even after the pandemic. The stock is expected to have a free cash flow yield of 10% through 2022, and 13% through 2023, Barclays said. Shares of Victoria’s Secret have tumbled more than 22% this year. The lingerie retailer has been trying to turn around its business. In March, MKM Partners said it looked like “one of the best stories in retail, with ongoing evidence of improving underlying fundamentals. The retailer is expected to report earnings on Tuesday after the bell. Victoria’s Secret shares are expected to have a free cash flow yield of 20% in 2022 and 2023, Barclays said. Shares of GoDaddy could have 60% upside from Thursday’s closing price, Barclays said. The web hosting company looks like a “strong investment in a turbulent market” because of its solid fundamentals and robust free cash flow, according to a note from Wedbush analysts earlier this month. Wedbush also called out GoDaddy’s commerce product developments. GoDaddy has an expected free cash flow yield of 10% through 2022, and 11% in 2023, Barclays said. Other stocks included in Barclay’s list are Liberty SiriusXM Group , Bloomin’ Brands , KB Home , General Motors , Kosmos Energy , Tenet Healthcare , Fidelity National Information Services , Micron Technology and CenterPoint Energy .

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