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2 top value stocks I’d buy in March

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As the stock market bull run rages on, investors are finding it increasingly difficult to unearth genuine bargains in today’s market. The good news is that there are still plenty of attractively-priced value stocks to be found if you know where to look. If you don’t believe me, just take a look at these two high-achievers that are still trading on unbelievably low valuations.

Record highs

Those of you that followed my advice back in October 2016 will by now be very familiar with Crest Nicholson (LSE: CRST). Not only did the upmarket residential housebuilder go on to achieve its sales target of £1bn for the financial year, but the company also saw its share price soar 56% to record highs of 636.5p just seven months after my recommendation.

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But that was then, and this is now, although the success story goes on as full-year results for FY2017 revealed yet another year of growth for the Surrey-based developer, with increases in both sales and the total number of homes built. The FTSE 250-listed group delivered 2,935 new homes in 2017, an increase of 2.3%, at an average selling price of £388,000.

Buying opportunity

During the 12 month period to October 2017, the group delivered a record £1,066m of sales, and remains on course to achieve its £1.4bn target by 2019. Pre-tax profits came in 6% higher than the previous year at £207m with the business benefitting from additional profits generated from joint ventures.

In light of the improved performance, management proposed a final dividend of 21.8p per share, taking the total payout for the year to 33p, representing a substantial 19.6% improvement on the previous year. With the shares now trading at less than seven times forward earnings, and supported by a 7.3% yield, I sense another buying opportunity for income seekers on the hunt for a bargain.

Small-cap special

For those who aren’t afraid to venture into small-cap territory then I believe overlooked VP plc (LSE: VP) could be just the ticket. The £340m group is a specialist rental business providing products and services to a diverse range of markets including infrastructure, construction, housebuilding, and oil and gas, both in the UK and overseas.

Based in the spa town of Harrogate, North Yorkshire, this rapidly-growing business has seen a threefold increase in its share price since 2013, but I believe there’s still plenty more to come, with results for the first six months of the year showing further significant growth for the group.

Oozing value

Late last year VP made its largest acquisition to date with the purchase of Brandon Hire for £41.6m. With its extensive branch network, the national tool and equipment hire business looks to be an excellent geographic fit with VP’s current specialist tool hire operations, and management expects the acquisition to be earnings enhancing within the first 12 months of ownership.

With analysts expecting earnings to rise by a further 44% by FY2020, VP looks to be oozing value trading on an undemanding price/earnings ratio of 11.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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