Investors: Please OPEN Your Eyes

The S&P 500 (SPY) seems to be on the verge of an important breakout above the key level of 4,000. That’s because some are applauding the lowering of inflationary pressures. However, the flip side of that coin is that this is happening because of a recession looming on the horizon that provides ample reason to remain bearish in 2023. This is why 40 year investment veteran, Steve Reitmeister, begs investors to open their eyes to appreciate what is happening now. And how to trade this still bearish market environment. Read on below for the full story.

The early 2023 rally was always too good to be true. That’s because the myopic focus on moderating inflation needs to give way to a broader view of the looming recession which should have investors hitting the sell button in earnest once again. Not just a temporary pause like we saw Wednesday and Thursday.

We need to take a deeper dive on this conflict between investors focused on inflation data versus those looking at the overall economic picture. You know that I stand with the latter group which is why the bearish drum beat is only growing louder in my ears.

The standoff between bulls and bears will be the focus of this week’s discussion.

Market Commentary

The inflation vs. recession battle took center stage on Wednesday when 2 key economic reports were released simultaneously at 8:30am ET: Producer Price Index (PPI) and Retail Sales.

The much lower than expected PPI report got everyone’s attention out of the gate leading to a surge in stock prices over the key resistance level at 4,000 for the S&P 500 (SPY) The next thing you know the downward momentum starts and kept chiseling away all day long. This is how stocks sold off 2% from peak to valley ending the session at 3,928.

Those investors myopically focused on inflation were left scratching their heads.

Those who were focused on the red flags in the Retail Sales report knew darn well why stocks were heading lower. That being another nail in the recessionary coffin for the US economy.

To be clear, inflation is absolutely coming down at a quicker pace than most expected. This does mean that hawkish Fed policies are working. And they may pivot to dovish earlier than expected…but not for quite a while. That message was echoed once again on Friday by Fed Governor Waller when he said:

“…we still have a considerable way to go toward our 2 percent inflation goal, and I expect to support continued tightening of monetary policy”

HOWEVER, the real reason inflation is moderating is because we are now teetering on the edge of a recession. This came through loud and clear from recessionary signals from a myriad of January economic reports like:

48.4 ISM Manufacturing on 1/4 with 45.2 New Orders (reads recession)
49.6 ISM Services on 1/6 with 45.2 New Orders (reads recession)
89.8 NFIB Business Optimism Index on 1/10 (lower reading than during Covid…reads recession)
-32.9 NY Empire State Manufacturing Index (lowest reading since May 2020 when the economy was in downright collapse).

And yes, the Retail Sales report that arrived side by side with the PPI report Wednesday morning bodes ill for the state of the consumer. The -1.1% month over month decline is all the more shocking when you realize we are talking about December retail sales…yes, the normally buoyant Christmas shopping season was underwater.

This is a very typical pattern for a recession induced by high inflation. Think about it this way…when you are afraid of rampant inflation, that means if you don’t buy now the price will be far too high in the future.

At first this creates impressive economic growth as demand is pulled forward (buy now). And then a cliff is created as buyers are tapped out with less to spend in the future. That contraction = recession. That cliff is likely what we saw in those week holiday shopping results as well as other early 2023 economic data.

Indeed, moderating inflation is good news in isolation. And it does likely say the Fed will not have to go as high with rates or keep them aloft as long.

On the other hand, please appreciate that this is all happening because we are in month 10 of this hawkish regime that is likely producing a recession that begets lower demand that begets lower prices.

So if it took 10 months to create this outcome, and we are sinking into recession, and the Fed has already said they would keep rates high for “a long time”. then we have to appreciate how long it will take for any pivot to dovish Fed policies to resurrect the economy.

Like end of the year…or 2024. And when you fully appreciate that picture of recession coming before recovery…it makes it all the harder to get truly 100% gung ho bullish at this time.

So does that mean now is the time to be ferociously bearish? Yes and no.

YES…this is the logical outcome from what I said above. Especially given the lessons of history where recessions are the leading cause of bear markets.

NO… is that the market can often have a mind of its own and take a different path. Especially true when computers do more of the heavy lifting than actual human investors. So fear and greed are not quite the same as historical patterns.

Long story short, I expect things to roll further bearish as more investors broaden their focus from just the inflation picture to the overall health of the economy. The more they read recession, and with it lower corporate earnings, the more likely stocks head lower from here.

That’s because the leading cause of bear markets is the state of the economy…where recession = bear market.

So keep your eyes firmly fixed on that economic picture to guide your investing decisions from here. The current clues point to more downside ahead. However, that may not fully take place until after the February 1^st Fed announcement where Powell will once again remind bulls that he did not stutter when he said that rates will be high for a long time. And that long time is far from over.

What To Do Next?

Discover my special portfolio with 9 simple trades to help you generate gains as the market descends further into bear market territory.

This plan has been working wonders since it went into place mid August generating a robust gain for investors as the market tumbled.

And now is great time to load back as we deal with yet another bear market rally before stocks hit even lower lows in the weeks and months ahead.

If you have been successful navigating the investment waters this past year, then please feel free to ignore.

However, if the bearish argument shared above does make you curious as to what happens next…then do consider getting my updated “Bear Market Game Plan” that includes specifics on the 9 unique positions in my timely and profitable portfolio.

Click Here to Learn More >

Wishing you a world of investment success!

Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, StockNews.com and Editor, Reitmeister Total Return

SPY shares fell $0.13 (-0.03%) in after-hours trading Friday. Year-to-date, SPY has gained 3.52%, versus a % rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.

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https://www.entrepreneur.com/finance/investors-please-open-your-eyes/443406

3 Stocks That Can Help Keep Your Retirement Account Safe

Although the Fed’s seven interest rate hikes were able to cool inflation in the last three months of 2022, the central bank remains committed to achieving its inflation target by raising interest rates through 2023. As the economy might witness a slowdown, investors could consider adding fundamentally sound and dividend-paying stocks Walmart (WMT), Molina Healthcare (MOH), and International Paper (IP) to their retirement accounts. Read on….

The stock market has experienced a challenging 2022 due to geopolitical headwinds, high inflation, and the Fed’s aggressive interest rate hikes. With the central bank raising interest rates to the highest level since 2008, inflation showed signs of cooling off in the last three months of 2022.

The consumer price index (CPI) fell for the sixth consecutive month in December. It increased 6.5% year-over-year and declined 0.1% sequentially. Although progress has been made in bringing inflation down from its high of 9.1% year-over-year rise in June, minutes from the Fed’s policy meeting show that the central bank remains committed to bringing inflation down to its 2% target. So, a pause in interest rate hikes is highly unlikely this year.

As the economy and the stock market are expected to remain under pressure, it could be safe to consider investing in shares of businesses that can survive an economic downturn based on the inelastic demand for their products.

To that end, Walmart Inc. (WMT), Molina Healthcare, Inc. (MOH), and International Paper Company (IP) could be ideal additions to a retirement portfolio.

Walmart Inc. (WMT)

WMT engages in the operation of retail, wholesale, and other units worldwide. The company operates through three segments: Walmart U.S., Walmart International, and Sam’s Club.

On January 5, 2023, WMT announced that it was now operating 36 drone delivery hubs across seven states. It completed more than 6,000 deliveries over the past year in as little as 30 minutes. The company is well positioned to offer drone delivery at scale; with its 4,700 stores located within 90% of the U.S. population, it will be able to deliver more items through drones helping it cut costs and drive higher revenues.

In terms of the trailing-12-month Return on Common Equity, WMT’s 11.61% is 9.6% higher than the 10.59% industry average. Likewise, its 2.44% trailing-12-month asset turnover ratio is 194.1% higher than the industry average of 0.83%.

WMT’s total revenues for the third quarter ended October 31, 2022, increased 8.7% year-over-year to $152.81 billion. Its adjusted operating income, constant currency, rose 4.6% year-over-year to $6.06 billion. In addition, its adjusted EPS came in at $1.50, representing a 3.4% increase from the year-ago quarter.

WMT’s EPS for the quarter ending April 30, 2023, is expected to increase 7.4% year-over-year to $1.40. Its revenue for the quarter ending January 31, 2023, is expected to rise 4.3% year-over-year to $158.09 billion. It surpassed the Street EPS estimates in three of the trailing four quarters. The stock has gained 15.9% over the past six months to close the last trading session at $145.29.

WMT’s POWR Ratings reflect its solid prospects. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Within the A-rated Grocery/Big Box Retailers industry, it is ranked #8 out of 39 stocks. It has an A grade for Sentiment and a B for Stability. Click here to see the additional POWR Ratings of WMT for Growth, Value, Momentum, and Quality.

Molina Healthcare, Inc. (MOH)

MOH offers managed healthcare services under Medicaid and Medicare programs and through state insurance marketplaces. The company operates through four segments: Medicaid; Medicare; Marketplace; and Other.

On October 3, 2022, MOH announced the closure of its acquisition of AgeWell New York’s Medicaid Managed Long Term Care (MLTC) business. As of September 30, 2022, AgeWell’s MLTC business served approximately 13,000 members. This is expected to have a positive impact on MOH’s topline.

In terms of the trailing-12-month net income margin, MOH’s 2.77% compares to the negative industry average. Likewise, its 4.76% trailing-12-month EBITDA margin is 27.6% higher than the industry average of 3.73%. Furthermore, the stock’s 2.54% trailing-12-month asset turnover ratio is 652.8% higher than the industry average of 0.34%.

For the fiscal third quarter ended September 30, 2022, MOH’s total revenue increased 12.6% year-over-year to $7.93 billion. Its operating income increased 51.6% year-over-year to $335 million. The company’s adjusted net income increased 54.9% year-over-year to $254 million. In addition, its adjusted EPS came in at $4.36, representing an increase of 54.1% year-over-year.

For the quarter ending December 31, 2022, MOH’s EPS and revenue are expected to increase 39.5% and 6.2% year-over-year to $4.02 and $7.87 billion, respectively. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past six months, the stock has gained 6.3% to close the last trading session at $300.25.

MOH’s strong prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

It has a B grade for Growth, Value, and Quality. Within the A-rated Medical – Health Insurance industry, it is ranked #5 out of 11 stocks. Click here to see the other MOH ratings for Momentum, Stability, and Sentiment.

International Paper Company (IP)

IP operates as a packaging company primarily in the United States, the Middle East, Europe, Africa, the Pacific Rim, Asia, and the Rest of the Americas. It operates through two segments: Industrial Packaging and Global Cellulose Fibers.

In terms of the trailing-12-month net income margin, IP’s 9.14% is 2.8% higher than the 8.88% industry average. Likewise, its 12.54% trailing-12-month levered FCF margin is 143.3% higher than the industry average of 5.16%. Furthermore, the stock’s 0.78% trailing-12-month asset turnover ratio is 2.3% higher than the industry average of 0.76%.

IP’s net sales increased 9.9% year-over-year to $5.40 billion for the third quarter ended September 30, 2022. Its net earnings increased 10.1% year-over-year to $951 million. The company’s EPS came in at $2.64, representing an increase of 20% year-over-year.

Analysts expect IP’s revenue for the quarter ending December 31, 2022, to increase 2.2% year-over-year to $5.20 billion. Its EPS for fiscal 2022 is expected to increase 18% year-over-year to $3.78. Over the past three months, the stock has gained 16.7% to close the last trading session at $38.25.

It’s no surprise that IP has an overall rating of B, which equates to a Buy in our POWR Ratings system.

Within the A-rated Industrial – Paper industry, it is ranked #4 out of 12 stocks. It has a B grade for Growth, Value, and Quality. Click here to see the other IP ratings for Momentum, Stability, and Sentiment.

WMT shares were trading at $144.51 per share on Tuesday afternoon, down $0.78 (-0.54%). Year-to-date, WMT has gained 1.92%, versus a 4.09% rise in the benchmark S&P 500 index during the same period.

About the Author: Dipanjan Banchur

Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.

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https://www.entrepreneur.com/article/443122

1 Cable Stock That’s Not Tough to Own

Popular cable stock Comcast (CMCSA) recently announced the world’s first live multi-GB internet connection with 10G and Full Duplex DOCSIS 4.0. Moreover, CMCSA pays a more than 2% dividend. Also, Wall Street analysts expect the stock to grow almost 10% in the near term. Therefore, CMCSA might be an ideal addition to your portfolio. Keep reading.

Cable stock Comcast Corporation (CMCSA) recently announced the world’s first live, multigigabit symmetrical Internet connection powered by 10G and Full Duplex DOCSIS 4.0.

Charlie Herrin, President, Technology, Product, Experience at CMCSA Cable, said, “This live trial combines years of technology innovation and versatility to create a clear path to next-generation speed, reliability and performance for all the homes in our footprint, not just a select few.”

Moreover, demand for the cable industry is expected to expand rapidly in the coming years. According to The Insight Partners’ the global high-speed cable market is expected to grow at a CAGR of 6.9% until 2028.

Furthermore, CMCSA paid consecutive dividends for 13 years. Its dividend payouts have grown at 11.4% CAGR over the past five years and 8.7% CAGR over the past three years. Its current dividend yield is 2.77%, while its four-year average yield is 2.09%.

CMCSA has lost 2.4% over the past six months to close the last trading session at $38.93. However, it has gained 6.1% over the past month and 28.8% over the past three months.

Here is what could shape CMCSA’s performance in the near term:

Steady Bottom-line Growth

CMCSA’s adjusted net income came in at $4.22 billion for the third quarter that ended September 30, 2022, up 4.5% year-over-year, while its adjusted EPS came in at $0.96, up 10.3% year-over-year.

Also, its adjusted EBITDA increased 5.9% year-over-year to $9.48 billion. Moreover, its free cash flow came in at $3.39 billion, reflecting a 4.7% year-over-year increase.

Attractive Valuations

CMCSA’s forward EV/EBITDA of 7.09x is 17.7% lower than the industry average of 8.61x. Its trailing-12-month non-GAAP P/E of 10.81x is 23.3% lower than the industry average of 14.10x. Moreover, its forward Price/Cash Flow of 6.18x is 33.5% lower than the industry average of 9.29x.

Robust Profitability Margins

CMCSA’s trailing-12-month gross profit margin of 68.41% is 36% higher than the industry average of 50.32%. Its trailing-12-month EBITDA margin of 30.40% is 60.4% higher than the industry average of 18.95%.

In addition, its trailing-12-month ROCE and ROTC of 6.14% and 7.55% compare with the industry averages of 5.81% and 3.83%, respectively.

POWR Ratings Reflect Promising Outlook

CMCSA has an overall rating of B, which equates to a Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. CMCSA has a B grade for Quality, consistent with its higher-than-industry profitability margins.

It has a C grade for Sentiment. Analysts expect CMCSA’s revenue to decline marginally year-over-year to $120.01 billion in 2023. However, its EPS is expected to increase by 3.6% year-over-year to $3.73.

In the 9-stock Entertainment – TV & Internet Providers industry, CMCSA is ranked first.

Click here for the additional POWR Ratings for CMCSA (Growth, Value, Momentum, and Stability).

View all the top stocks in the Entertainment – TV & Internet Providers industry here.

Bottom Line

CMCSA reported solid bottom-line growth in the last reported quarter. Moreover, Wall Street analysts expect the stock to hit $42.64 soon, indicating a potential upside of 9.5%. Also, given the stock’s attractive valuations and robust profitability, I think CMCSA might be an ideal addition to your portfolio.

CMCSA shares were trading at $38.93 per share on Monday morning, up $0.24 (+0.62%). Year-to-date, CMCSA has gained 12.19%, versus a 4.20% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

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https://www.entrepreneur.com/article/443025

This Trend Is Every Bull’s Friend…

Inflation moved the S&P 500 (SPY) this week as the December Consumer Price Index (CPI) report was released on Thursday. Let’s break it down in today’s issue. I think the results may surprise you.

(Please enjoy this updated version of my weekly commentary originally published January 12^th, 2023 in the POWR Stocks Under $10 newsletter).

Reflecting on the Consumer Price Index (CPI) report this past week, here are the two most interesting data points I saw:

Home prices increased just 0.8% compared to last month. Shelter accounts for about a third of CPI. Gains in this line have levelled off and are no longer driving large jumps in inflation.
Used car prices were down 2.5% last month and down 8.8% over the past year. While used car prices account for a much smaller portion of CPI — just 3.6% — Fed officials blamed the spike in used car prices for inflation when it began rising in 2020. I’d bet Fed economists are still watching the data and are pleased with this drop.

This month’s report also marked the third consecutive downtrend in consumer inflation.

I’m not going to come out and declare that we’ve won the war—if you’ve been reading these issues for the past few months, you know I think there is still more room for downside than upside—but I will go on record saying things are trending in the right direction.

The fact that we now have three consecutive months of reports all pointing in the same direction is very positive.

Additionally, the fact that the labor market has somehow remained healthy gives me a spark of hope that the elusive “soft landing” may actually come to pass.

I found the details to be encouraging. And based on the rally that took place afterward, it looked like other traders agreed.

About an hour after the report was released, the stock market (SPY) opened. Shares were down a little on the open but rallied and ended the day higher.

This may actually be bullish…

There’s so much more that could be said about the Fed and inflation and what all of this means going forward.

A number of analysts are concerned about what things look like later in the year if inflation plateaus, potentially forcing the Fed to to keep rates high.

I do believe Powell when he says there won’t be rate cuts in 2023, but I also know that the Fed members make their decisions based on data.

It really all just depends on whether the trend stays in place.

Conclusion

Stocks are still up for the year, and the latest inflation data points are marking out a bullish trend. Is it too good to be true? We’ll find out at the beginning of February when the Fed meets again.

What To Do Next?

If you’d like to see more top stocks under $10, then you should check out our free special report:

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All the Best!

Meredith Margrave
Chief Growth Strategist, StockNews
Editor, POWR Stocks Under $10 Newsletter

SPY shares closed at $398.50 on Friday, up $1.54 (+0.39%). Year-to-date, SPY has gained 4.20%, versus a % rise in the benchmark S&P 500 index during the same period.

About the Author: Meredith Margrave

Meredith Margrave has been a noted financial expert and market commentator for the past two decades. She is currently the Editor of the POWR Growth and POWR Stocks Under $10 newsletters. Learn more about Meredith’s background, along with links to her most recent articles.

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https://www.entrepreneur.com/article/442977

Will China Be The Ultimate Downfall For Tesla (TSLA) ?

The recent short covering rally in Tesla stock provides a better price point to position to profit on a further pullback in TSLA.

Tesla (NASDAQ:TSLA) is in trouble. It is down $80 a share (40%) in the past month and a half and $260 a share (67%) since making a high last April. And it’s becoming increasingly clear that China — the very market that the company once appeared dependent on for survival — may ultimately spell even more trouble for Elon Musk in the weeks and months to come.

In October, Morgan Stanley analysts said that Tesla Motors is so dependent on the Chinese market that it is essentially a Chinese tech stock. “We estimate Tesla generates as much as one-half of its profitability from the Chinese market,” they remarked, “arguably making the stock a derivative of a Chinese tech stock.” That’s a problem when considering Musk’s sales in China continue to plummet, and Musk’s business ties to China continue to incite congressional movement.

Following China’s slashing of a pro-Tesla subsidy program, deliveries of its China-made cars hit its lowest point in five months in December, causing TSLA to cut prices in the country for the second time in three months. As of today, prices are now down between 12% to 24% from September.

Is this a minor stock blip? History indicates that it may not be. In fact, in 2017 when the country scaled its tax subsidies back significantly, car registrations plummeted over 95%, so Tesla’s travails just might be getting started. Even China has conceded that Tesla may need to take drastic actions to stay afloat, with the China Merchants Bank International (CMBI) saying that, “Tesla needs to further cut prices and expand its sales network in China’s lower-tier cities amid ageing models.”

Worse news for TSLA is that, even if Musk does right this ship with China, the new Congress is highly expected to crack down on companies that they perceive to be tied too closely to the communist regime this year. And Musk’s companies appear to be at the top of this list.

Last year, The Wall Street Journal published a news story that expressed legislators’ “concerns…on the potential for China to gain access to the classified information possessed by Mr. Musk’s closely held Space Exploration Technologies Corp., including through SpaceX’s foreign suppliers that might have ties to Beijing.” The piece went onto state that some lawmakers are troubled “by the lack of clear lines between SpaceX and auto maker Tesla Inc.” These concerns caused Rep. Chris Stewart (R-UT), who sits on the House Permanent Select Committee on Intelligence, to call for classified briefings and Sen. Marco Rubio (R-FL) to introduce a bill that would seemingly restrict the government from utilizing contractors like Musk who retain their ties to the Chinese Communist Party.

Now that the House and Senate is split between Republican and Democratic control, expect regulating companies like Musk’s to become an even bigger congressional priority as it represents one of the only ways they can govern in a bipartisan fashion 2023. As a senior fellow with the Chongyang Institute for Financial Studies put it, “only through the topic of containing China is it possible for both parties to form a united front. This is not because China has really become the enemy that will destroy the U.S. tomorrow morning, but because they can’t reach a consensus on many US domestic problems, they can only use China to shift the subject.”

The election of Kevin McCarthy as Speaker of the House has only compounded the concerns for TSLA’s future. He said this summer that he will lead a congressional delegation to Taiwan and co-authored an op-ed with Rep. Mike Gallagher (R-Iowa), chairman of the Select Committee on China, titled, “China and the US are locked in a cold war. We must win it. Here’s how we will win it.” Expect him to partner with Sen. Majority Leader Chuck Schumer (D-NY) to address the perceived China threat in some capacity.

Certainly, some big players are looking for the recent rebound in Tesla shares to reverse. Almost 10,000 of the February $100 puts traded Friday at around $3.00. This equates to roughly a 3 million dollar wager that the sell-off in Tesla has further to go.

The big-time buyer of these put options is positioning more pain in Tesla stock and a meaningful break of the $100 support level. Using bearish put options in place of shorting the stock allows the trader to participate in the downside in a defined risk manner.

Add this all up, and it appears that TSLA is in a classic “damned if you do, damned if you don’t” scenario. Fixing its profitability problems in China may help it in the immediate short term — but doing so may only fuel its looming congressional regulatory crackdown in ways that could significantly affect sales in its largest market, the United States. Investors would be wise to stay away until this dust settles.

POWR Options

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All the Best!

Tim Biggam

Editor, POWR Options Newsletter

TSLA shares closed at $122.40 on Friday, down $-1.16 (-0.94%). Year-to-date, TSLA has declined -0.63%, versus a 4.20% rise in the benchmark S&P 500 index during the same period.

About the Author: Tim Biggam

Tim spent 13 years as Chief Options Strategist at Man Securities in Chicago, 4 years as Lead Options Strategist at ThinkorSwim and 3 years as a Market Maker for First Options in Chicago. He makes regular appearances on Bloomberg TV and is a weekly contributor to the TD Ameritrade Network “Morning Trade Live”. His overriding passion is to make the complex world of options more understandable and therefore more useful to the everyday trader. Tim is the editor of the POWR Options newsletter. Learn more about Tim’s background, along with links to his most recent articles.

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https://www.entrepreneur.com/article/442975

Bristol-Myers Squibb (BMY) is a Top Value Stock for 2023

The bear market has been downright brutal for growth stocks. Thus making it clear that now is the time for value. That is why you need to discover the attractiveness of Bristol-Myers Squibb (BMY) shares. Read on below for the full story.

Bristol-Myers Squibb (BMY) is the poster child for a stock to own during a bear market. First, because it’s in the defensive healthcare industry which doesn’t buckle when the economy is under pressure. Second, the north of 3% dividend yield is a welcome sight when you bank account pays nothing on cash.

Add it all up and you understand why shares were in positive territory in 2022 when most other stocks were painted red. Gladly with the market outlook still dark because of looming recession, BMY continues to be a terrific choice for the year ahead.

As noted above, healthcare is always a safe haven for investors in the midst of recession and growth concerns as most people will sacrifice spending in other places to stay on a healthy track. This notion shows up quite clearly in their long term earning track record with only 1 miss in the past 20 quarters. And that includes 4 straight beats in 2022.

On the POWR Ratings front it is chock full of high ratings that point to strong price action ahead. That party starts with A overall + A for Value. After that you have a string of B’s for Stability, Sentiment and Quality.

Stability points to lower beta and better nights sleep during rough times. Whereas Quality says it’s extremely well run company likely to continue to produce positive earnings results in the future.

Just for good measure BMY offers healthy income to go along with the growth and value story. When cash is paying virtually nothing, then it certainly helps the ROI story when you add a nearly 3% dividend yield into the mix.

This really is an all-weather value stock. But especially beneficial to consider when the bearish storm clouds are still in the air.

Want to Discover More Value Stocks?

BMY is just 1 of 7 attractive value stocks found in a new special report we just put together. Click the link below to claim your free copy now:

7 SEVERELY Undervalued Stocks

What To Do Next?

Watch my brand new presentation: “2023 Stock Market Outlook” covering:

Why 2023 is a “Jekyll & Hyde” year for stocks
5 Warnings Signs the Bear Returns in Early 2023
8 Trades to Profit on the Way Down
Plan to Bottom Fish @ Market Bottom
2 Trades with 100%+ Upside Potential as New Bull Emerges
And Much More!

Watch Now: “2023 Stock Market Outlook” >

Wishing you a world of investment success!

Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, Stock News Network and Editor, Reitmeister Total Return

BMY shares were trading at $71.65 per share on Thursday afternoon, down $0.29 (-0.40%). Year-to-date, BMY has gained 0.37%, versus a 4.02% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

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https://www.entrepreneur.com/article/442972

How to RIDE the Next Bull Market?

Growth stocks are back! And, they are poised to lead the S&P 500 (SPY) higher after the brutal bear market investors experienced in 2022. Read on to find out the best strategy to profit from the next big bull market in growth stocks.

Earlier in 2022, we unveiled an important article titled…

3 Steps to AVOID Dangerous Growth Stocks

The crux of this popular article is that it was a precarious time for growth stocks. And, we gave readers specific advice on avoiding particular stocks that were egregiously overpriced. This included:

Using the POWR Ratings to eliminate the worst growth stocks
Focusing on leading stocks
Identifying companies with operating leverage

Of course, we have applied this strategy to the POWR Growth service.

And, it’s a major reason why the service has so greatly outperformed all the most popular growth ETFs and even the Nasdaq.

BUT, it’s NOW time for an IMPORTANT update.

Conditions have been improving for growth stocks. Ironically, this is just as fund managers and retail traders have capitulated on their holdings.

Valuations have become incredibly enticing as the bear market has created a bounty of GARP (growth at a reasonable price) opportunities for savvy investors.

In the POWR Growth service, we have responded by snapping up the healthiest of these stocks with the most enticing upside potential.

The job is not done as we continue to identify enticing opportunities in the alternative energy space, biotechs, genomics, and cloud computing.

These are companies that will grow earnings at a double-digit pace over the next decade and have all the characteristics of becoming leading stocks in the next bull market.

As Warren Buffett said, “A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.”

Life-changing returns can be unlocked by investors who are able to put aside their emotions during challenging economic times and act in a logical and intelligent manner.

It’s not unusual for leading stocks in a bull market to deliver returns in the 3-digit, 4-digit, or even 5-digit range. The key is to buy them early and patiently hold as long as fundamentals continue improving.

In the POWR Growth service, we have done the hard work of sifting through the rubble to find the companies that are still growing, expanding margins, and generating free cash flow (or on the path to).

In order to take advantage of this opportunity, professional investors spend countless hours investigating, learning, and identifying the growth stocks that have been unfairly punished during the selloff.

For those of you who don’t have that kind of time, the POWR Growth service will allow you to confidently invest in high-quality, undervalued growth stocks with significant potential.

This active trading service achieves consistent outperformance by going way beyond the outdated buy and hold (or buy and hope!) approach that many newsletters offer.

That’s because it takes a systematic approach to zero in on the market’s best stocks, by utilizing the computer driven Top 10 Growth Stocks strategy with average annual returns of +46.85%.

I then carefully examine what is going on in the markets and tell you exactly what to buy, when to buy AND what to avoid.

I’ll also let you know when it’s time to get more defensive to preserve capital (as we did for most of 2022) and when it’s time to get more aggressive again to maximize your gains.

What To Do Next?

See my top stocks for today’s market inside the POWR Growth portfolio.

This exclusive portfolio gets most of its fresh picks from our proven “Top 10 Growth Stocks” strategy which has produced stellar average annual returns of +46.85%.

And yes, it continues to outperform by a wide margin even during these rough and tumble markets.

If you would like to see the current portfolio of growth stocks, and be alerted to our next timely trades, then consider starting a 30 day trial by clicking the link below.

About POWR Growth newsletter & 30 Day Trial

All the Best!

Meredith Margrave
Chief Growth Strategist, StockNews
Editor, POWR Growth Newsletter

SPY shares were unchanged in after-hours trading Friday. Year-to-date, SPY has gained 4.20%, versus a % rise in the benchmark S&P 500 index during the same period.

About the Author: Meredith Margrave

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The post How to RIDE the Next Bull Market? appeared first on StockNews.com

https://www.entrepreneur.com/article/442946

Investor Alert: The 2023 Bull Run is Over?

Hey are you enjoying the early gains for the 2023 stock market? Me too. Unfortunately this appears to be a mirage with the S&P 500 (SPY) ready to head lower…and probably make new lows in the months ahead. Why is that? Read on below for the answer.

The market has been hot out of the gate to start the new year. Perhaps too hot as the applause for softer inflation blocked out the noise that these lower prices happened because of serious recessionary red flags.

I sense this may be the last gas for bulls and the bears are about to take the steering wheel again.

Why?

That will be the focus of today’s commentary…

Market Commentary

The new year always brings with it fresh optimism. That alone could explain the +4.2% showing for the S&P 500 (SPY) to kick off the year.

On the surface, bulls can point to exciting news that inflation continues to decline. That was the headline read for sure, especially after the 1/12 CPI report. Let’s dig in deeper on that one…

At this stage month over month is more important than year over year. That’s because most of the inflation pain happened many months ago, especially in the spring of 2022. That makes inflation look high year over year…but the month over month tells you the true current pace.

On that front we see Core Inflation up +0.3% month over month which points to annualized +3.6% which is nicely lower than the past…but still well above the Feds desired 2% target.

More specifically “sticky inflation” is still a problem. This report shows an +0.8% increase in shelter prices (housing) which translates to nearly 10% a year. Far too hot.

Further wage inflation was report last week at +4.6% year over year with a slight slowing of trend to +0.3% month over month (+3.6%) per year.

The sum total of this information says that the Fed will not change there tune. So given what the Fed has said in the past about keeping rates higher for a long time…and then repeating that mantra over and over again including this past week…then it points to the February 1^st Fed announcement as another cold shower for bulls.

Now let’s get to what is causing lower inflation. That being 9 straight months of restrictive Fed policy that is finally doing its job. However, that is the view over the left shoulder. If you look over the right shoulder you will see it has come at the cost of an economy on the brink of recession.

48.4 ISM Manufacturing on 1/4 with 45.2 New Orders (reads recession)
49.6 ISM Services on 1/6 with 45.2 New Orders (reads recession)
89.8 NFIB Business Optimism Index on 1/10 (lower reading than during Covid…reads recession)
1/13 Earnings season begins with 2 of the 4 major banks soiling the bed. JPM warning that they are braced for recession.

Note that the US has not had an inflation induced recession since the 1980’s, so investors are a bit out of tune on how to handle this rare environment. Meaning they are far too interested in watching inflation data and predicting the likely Fed response as opposed to what they should be doing. That being to monitor the health of the economy as their guide of whether to be bullish or bearish.

If recession is on the way, that begets lower corporate earnings (typically 20% drop in EPS) and this begets lower stock prices given what investors are willing to pay for that weakened earnings profile. This is why it’s very hard to be bullish at this time.

Let’s press forward with a discussion of earnings season. The previous quarter was likely one of the worst in years as earnings estimates got slashed precipitously for coming quarters. Another round of that would be harmful to stock prices.

This means we have to watch earnings trends closely. Specifically speaking, the change in estimates going forward and if the current expectations for a 7% decline in earnings in Q1 darkens or brightens from here. That will have market moving consequences.

Here again, the average recession leads to a 20% reduction in EPS expectations. That is certainly not factored into stock prices at this time. All the more reason to watch earnings estimates more carefully. The early bank results foreshadow more pain on the way.

Now let’s rotate to price action. Bulls have already had some pretty impressive runs in the midst of the past years bear market only to get thwarted at the moment of truth. See S&P 500 one year chart below.

Be sure to focus on the 200 day moving average (red line) which keeps ending bullish advances. Both in mid-August and late-November and perhaps once again here in January.

Note that as of the Friday close the S&P stands at 3,999 while the 200 day moving average is at 3,981. Sounds scare that we are above that mark at this time. But before joining the bull party, please hear me out.

This is VERY typical behavior at the end of a bull run. Especially one that ends on a Friday.

Here we had premarket futures down 1% after some really bad bank earnings reports. Yet even then I knew that stocks would end the day higher pressing up against 4,000.

Why?

Just call it pattern recognition as I have seen it many times before. That being where the bulls have just enough energy to punch back one more time setting up a cliff hanger type moment: Will we break higher?…Are will the bear be back on the prowl? Tune in next week for the exciting conclusion.

Unfortunately, the Friday action is kind of like sprinting into the tape at the end of a marathon…just not a lot of energy to run again any time soon. This sets up for high likelihood of downside action on the way. However, I admit that anything is possible and indeed the bulls could have a couple more laughs in store.

Yet with the recessionary clouds darkening and earnings season off to a rocky start and the Fed likely to repeat their hawkish “a long time” mantra at the February 1st meeting…then I suspect we are soon at the end of this bullish run with more downside on the way.

Even if stocks do break above the 200 day moving average at this time, I would be hard pressed to join that party til the Fed announcement on 2/1 where they are likely to pour cold water on bulls once again.

What To Do Next?

Watch my brand new presentation: “2023 Stock Market Outlook” covering:

Why 2023 is a “Jekyll & Hyde” year for stocks
5 Warnings Signs the Bear Returns in Early 2023
8 Trades to Profit on the Way Down
Plan to Bottom Fish @ Market Bottom
2 Trades with 100%+ Upside Potential as New Bull Emerges
And Much More!

Watch Now: “2023 Stock Market Outlook” >

Wishing you a world of investment success!

Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, Stock News Network and Editor, Reitmeister Total Return

SPY shares rose $0.08 (+0.02%) in after-hours trading Friday. Year-to-date, SPY has gained 4.20%, versus a % rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

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The post Investor Alert: The 2023 Bull Run is Over? appeared first on StockNews.com

https://www.entrepreneur.com/article/442945

3 Large-Cap Stocks Worth Buying in 2023

With the Fed signaling to continue raising interest rates throughout this year, the probability of the economy tipping into a recession is increasing. Amid the macroeconomic unrest, fundamentally sound large-cap stocks UnitedHealth Group (UNH), Walmart (WMT), and Eli Lilly (LLY) might be safe investments this year. Read on….

Although the inflation showed signs of easing in October and November 2022, the Fed increased its benchmark interest rate to a range of 4.25% to 4.5% at its December meeting. Furthermore, policymakers anticipate that interest rates will stay high for longer and might reach 5.1% this year. However, the easing of inflation in December might make the Fed rethink its policy stance this year.

Investors are paying close attention to inflation since it impacts how far the central banks would go on their rate-hiking path. Rate increases have caused the economy to slow down, and how far the Fed chooses to go could determine whether or not there would be a recession.

Moreover, the World Bank reduced its forecast for global economic growth from 3% to 1.7% for 2023, citing worsening economic conditions. The adjustment resulted from a significant decline in the U.S. economy’s prospects, with the World Bank forecasting 0.5% growth, down from the earlier projection of 2.4%.

The World Bank stated, “Global growth has slowed to the extent that the global economy is perilously close to falling into recession.” It further contends that while global central banks’ measures to control inflation might have been important, they have significantly worsened the financial situation on a global scale.

Given the ongoing macroeconomic uncertainties, investing in shares of large-cap companies could be safe for investors as they are well-established firms with the capacity to withstand challenging economic periods. Hence, fundamentally sound large-cap stocks UnitedHealth Group Incorporated (UNH), Walmart Inc. (WMT), and Eli Lilly and Company (LLY) could be worthy buys this year.

UnitedHealth Group Incorporated (UNH)

With a market capitalization of $461.01 billion, UNH is a diversified healthcare corporation in the United States. It operates through UnitedHealthcare; OptumHealth; OptumInsight; and OptumRx segments. The company offers consumer-oriented health benefit plans, software and information products, and pharmacy care services.

On January 10, 2023, Optum, a UNH subsidiary, and Owensboro Health established a partnership to improve patient care and experience. Beginning in April 2023, roughly 575 Owensboro Health members in revenue cycle and information technology services would join Optum as part of this new agreement.

The company should benefit from the reinvention of conventional healthcare models and systems, along with improved efficiency, as a result of this cooperation.

Also, on January 5, Optum and Northern Light Health announced their strategic partnership to improve the quality of medical care for patients and providers in Maine. Beginning in March 2023, about 1,400 Northern Light Health employees are expected to join Optum as employees, which could aid Optum in growing its business and enhancing its operational effectiveness.

For the third quarter of fiscal 2022, which ended September 30, 2022, UNH’s total revenues increased 11.8% year-over-year to $80.89 billion, and its earnings from operations grew 30.6% from the year-ago value to $7.46 billion. Adjusted net earnings attributable to UNH common shareholders rose 27.2% year-over-year to $5.49 billion, while its adjusted EPS came in at $5.79, up 28.1% year-over-year.

The company has increased its dividends for 13 consecutive years. It pays a $6.60 per share dividend annually, which translates to a 1.34% yield on the current price level. Moreover, UNH’s dividend payouts have grown at a 17.4% CAGR over the past five years.

For the fiscal year ended December 2022, analysts expect UNH’s revenue to increase 12.6% year-over-year to $323.93 billion. The company’s EPS for the same year is expected to grow 15.8% from the previous year to $22.03. Moreover, UNH surpassed its consensus EPS in all four trailing quarters, which is impressive.

Furthermore, analysts expect the company’s revenue and EPS for the current fiscal year (ending December 2023) to grow 10% and 13.3% year-over-year to $356.17 billion and $24.95, respectively.

Shares of UNH have gained 5.2% over the past year to close the last trading session at $493.40.

UNH’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

The stock has a B grade for Growth, Stability, Quality, and Sentiment. Within the Medical – Health Insurance industry, it is ranked #2 of 11 stocks.

Beyond what we stated above, we also have UNH’s ratings for Value and Momentum. Get all UNH ratings here.

Walmart Inc. (WMT)

WMT runs retail, wholesale, and other units globally and has a market capitalization of $394.08 billion. It has roughly 10,500 stores and various e-commerce websites in 24 countries under 46 banners. It operates through Walmart U.S.; Walmart International; and Sam’s Club segments.

On December 15, 2022, WMT announced that it would boost customer experience by investing in supply chains, logistics, and infrastructure. WMT Canada revealed its intentions to establish a pioneering distribution facility in Quebec.

Additionally, the company’s logistics and supply chain networks throughout the Southeast area are being strengthened in Mexico by the soon-to-open Villahermosa Perishables Distribution Center.

On October 27, WMT announced the expansion of its popular digital storefront, The Netflix Hub, across 2,400+ WMT stores, along with a new Netflix Streaming Gift Card available only at WMT. The company aims to strategically benefit from increased customer satisfaction and experience by offering exclusive experiences and fan-favorite products.

The company has raised its dividends for 49 consecutive years. It pays a $2.24 per share dividend annually, which translates to a 1.53% yield on prevailing prices. WMT’s dividend payouts have grown at a 1.9% CAGR over the past five years, and its four-year average dividend yield is 1.69%.

For the fiscal 2023 third quarter ended October 31, 2022, WMT’s total revenues grew 8.7% year-over-year to $152.81 billion. The company’s adjusted operating income rose 3.9% from the prior year’s quarter to $6.02 billion. As of October 31, 2022, WMT’s total current assets stood at $87.68 billion compared to $81.07 billion as of January 31, 2022.

The consensus revenue estimate of $619.77 billion for the fiscal year ending January 2024 indicates a 3% year-over-year improvement. The consensus revenue estimate of $6.58 for the next year reflects a rise of 8.4% from the prior year. Furthermore, WMT surpassed its consensus EPS in three of four trailing quarters.

The stock has gained 16.5% over the past six months to close the last trading session at $146.13.

WMT’s strong prospects are apparent in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.

WMT has a Sentiment grade of A and a Stability grade of B. In the 39-stock A-rated Grocery/Big Box Retailers industry, it is ranked #10.

In addition to the POWR Ratings I’ve just highlighted, you can see WMT ratings for Growth, Value, Momentum, and Quality here.

Eli Lilly and Company (LLY)

LLY is a drug manufacturer. It discovers, develops, and sells products for the human pharmaceutical products market in 120 countries. It has a market capitalization of $342.45 billion. It serves wholesalers, managed care organizations, government and long-term care institutions, hospitals, and certain retail pharmacies.

On December 22, 2022, LLY and ProQR Therapeutics N.V. (PRQR) announced the expansion of their licensing and collaboration arrangement, focusing on the research, development, and commercialization of new genetic medicines.

With the use of ProQR’s Axiomer platform, LLY is expected to have access to more targets in the central nervous system and peripheral nervous system under the conditions of the expanded partnership. Moreover, the company would be able to exercise a $50 million payment to further the partnership’s growth.

Also, on December 1, LLY acquired Akouos, Inc. (AKUS). Through this acquisition, LLY intends to expand its efforts in genetic medicines to encompass the company’s portfolio of adeno-associated viral gene therapies to treat inner ear diseases such as sensorineural hearing loss.

On December 12, LLY announced a 15% increase in its quarterly dividend to $1.13 per share on outstanding common stock for the first quarter of 2023, payable on March 10, 2023. LLY pays a $4.52 per share dividend annually, which translates to a 1.25% yield on the current price level.

LLY’s dividend payments have grown at a 15% CAGR over the past three years. Moreover, the company has raised its dividends for eight consecutive years.

For the third quarter that ended September 30, 2022, LLY’s revenue increased 2.5% year-over-year to $6.94 billion, and its income before income taxes rose 25.7% from the prior year’s quarter to $1.57 billion. The company’s non-GAAP net income was $1.79 billion, up 10.8% year-over-year, while its non-GAAP EPS stood at $1.98, registering an 11.9% year-over-year increase.

Analysts expect LLY’s revenue to increase 6.6% year-over-year to $30.56 billion for the current fiscal year ending December 2023. Furthermore, the company’s EPS for the same year is expected to grow 6.4% from the previous year to $8.29. Shares of LLY have gained 8.9% over the past six months and 37.4% over the past year to close the last trading session at $360.41.

LLY’s solid fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, equating to Buy in our proprietary rating system.

The stock has a B grade for Stability and Quality. Within the Medical – Pharmaceuticals industry, it is ranked #28 of 164 stocks.

To see additional POWR Ratings for Growth, Value, Sentiment, and Momentum for LLY, click here.

UNH shares were trading at $489.64 per share on Thursday morning, down $3.76 (-0.76%). Year-to-date, UNH has declined -7.65%, versus a 3.53% rise in the benchmark S&P 500 index during the same period.

About the Author: Aanchal Sugandh

Aanchal’s passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor’s degree in finance and is pursuing the CFA program.She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.

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The post 3 Large-Cap Stocks Worth Buying in 2023 appeared first on StockNews.com

https://www.entrepreneur.com/article/442825

3 Stocks Investors Should Pour Their Money Into in 2023

While inflation has been showing signs of cooling recently, it is still far beyond the Fed’s target rate. Consequently, the Fed is expected to keep raising the interest rates for some time, fueling the chances of a global recession. Therefore, it could be wise to invest in well-performing stocks Pfizer (PFE), Honda Motor (HMC), and Jabil (JBL) that also pay consistent dividends. Read more.

December’s nonfarm payrolls increased by 223,000 for the month, above the Dow Jones estimate for 200,000, but marked a decrease from the 256,000 gains in November. Moreover, wage growth was less than expected, and the unemployment rate fell to 3.5%.

While inflation cooled off for the third consecutive month in December, it still remains far beyond the Fed’s 2% target. Fed officials in December projected that the current rate of 4.25%-4.50% range would rise to just over 5% by the end of 2023 and likely remain there for some time.

As a result, the risk of a recession is high. The World Bank recently warned yet again that the global economy would come “perilously close” to a recession this year, led by weaker growth in all the world’s top economies — the United States, Europe, and China.

Given this backdrop, well-performing and dividend-paying stocks Pfizer Inc. (PFE), Honda Motor Company, Ltd. (HMC), and Jabil Inc. (JBL) might be ideal investments now.

Pfizer Inc. (PFE)

PFE discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. The company serves wholesalers, retailers, hospitals, clinics, government agencies, pharmacies, individual provider offices, and disease control and prevention centers.

On January 10, it was reported that PFE is working with Chinese authorities to send its COVID-19 pill, Paxlovid, to the country dealing with a surge in COVID-19 cases currently. Pfizer has also agreed to export Paxlovid to China through a local company to make the medicine more widely available.

China has also been in talks with the drugmaker to secure a license that will allow domestic drugmakers to manufacture and distribute a generic version of Paxlovid in China, Reuters reported last week, citing sources.

On November 3, PFE’s investigational cancer immunotherapy, elranatamab, received Breakthrough Therapy Designation from the U.S. Food and Drug Administration (FDA) for treating people with relapsed or refractory multiple myeloma. This is yet another remarkable milestone in the field of oncology for PFE.

PFE has raised dividends for 12 consecutive years. Its dividend payouts have increased at a 5.7% CAGR over the past five years. Its current dividend yield is 3.46%, and its four-year average yield is 3.63%.

PFE’s United States segment revenues rose 97.3% year-over-year, $13.85 billion, during the third quarter that ended October 2, 2022. Its income from continuing operations grew 5.8% from the year-ago value to $8.65 billion.

The company’s non-GAAP net income increased 39.7% year-over-year to $10.17 billion, while its non-GAAP EPS improved 40.2% year-over-year to $1.78.

Street expects PFE’s revenue for the fiscal year (ended December 2022) to increase 23.5% year-over-year to $100.37 billion. The company’s EPS for the same year is estimated to grow 46.4% year-over-year to $6.47 in the same year. Moreover, the company has surpassed the consensus EPS estimates in each of the trailing four quarters, which is impressive.

The stock has declined 13.2% over the past three months to close the last trading session at $47.45.

PFE’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

PFE has an A grade for Value and a B for Growth and Quality. Within the Medical – Pharmaceuticals industry, it is ranked #6 out of 166 stocks.

Click here for the additional POWR Ratings for Momentum, Stability, and Sentiment for PFE.

Honda Motor Company, Ltd. (HMC)

Headquartered in Tokyo, Japan, HMC develops, manufactures, and distributes motorcycles, automobiles, power products, and other products in Japan, North America, Europe, Asia, and internationally. Its four segments are Motorcycle Business; Automobile Business; Financial Services Business; and Life Creation and Other Businesses.

On December 8, it was reported that HMC’s Honda Motor (China) Investment Co., Ltd had signed a battery-for-electric-vehicle deal with Contemporary Amperex Technology Co Limited (CATL). As per the contract, Honda would buy 123 GWh of batteries from CATL for use in China’s pure electric vehicles between 2024 and 2030. The battery supply contract will guarantee Honda a long-term supply of batteries amid current supply chain headwinds in the economy.

On October 11, HMC and LG Energy Solution (LGES) announced plans to build a new joint venture battery plant in Fayette County, Ohio, where they intend to invest $3.5 billion and create 2,200 jobs.

The firm aims to invest in a workforce that will provide the power source for future Honda and Acura electric vehicles. It has set a goal of having battery-electric and fuel-cell electric vehicles account for 100% of its vehicle sales by 2040.

Over the last three years, HMC’s dividend payouts have grown at a 6.7% CAGR. While HMC’s four-year average dividend yield is 3.39%, its current dividend translates to a 7.41% yield annually.

HMC’s sales revenue grew 25% year-over-year to ¥4.26 trillion ($32.16 billion) in the second quarter that ended September 30, 2022. Its operating profit increased 16.2% year-over-year to ¥231.20 billion ($1.75 billion). Moreover, its profit rose 13.6% year-over-year to ¥189.20 billion ($1.43 billion).

HMC’s revenue is expected to increase 7.7% year-over-year to $34.39 billion in the fiscal quarter that ended December 2022. The company has also exceeded its consensus revenue estimates in all the trailing four quarters.

Over the past three months, the stock has gained 9% to close the last trading session at $23.89.

It is no surprise that HMC has an overall A rating which equates to a Strong Buy in our POWR Ratings system.

It has an A grade for Value and a B for Quality and Stability. The stock is ranked #6 among the 63 stocks in the Auto & Vehicle Manufacturers industry.

Beyond the grades above, we’ve also rated HMC for Momentum, Sentiment, and Growth. Get all HMC ratings here.

Jabil Inc. (JBL)

JBL offers products and services for manufacturing all over the world. The company operates in two segments: Electronics Manufacturing Services and Diversified Manufacturing Services.

On November 14, 2022, JBL inaugurated a brand-new design facility in Wroclaw, Poland, where it will create cutting-edge solutions for various industries, including healthcare and automotive. With this 10,000-square-foot design center, JBL aims to expand its business in newer markets.

Its annual dividend of $0.32 yields 0.43% on the prevailing price. It has a four-year average dividend yield of 0.78%, and the company has been consecutively paying dividends for the past 16 years.

JBL’s net revenues stood at $9.64 billion for the first quarter ended November 30, 2022, increasing 12.5% year-over-year. Its gross profit increased 10.1% year-over-year to $743 million. Also, its operating income increased 3.4% year-over-year to $362 million.

Analysts expect JBL’s revenue to increase 7.3% year-over-year to $8.10 billion in the current second fiscal quarter ending February 2023. Its EPS is estimated to rise 9.9% year-over-year to $1.85 in the same quarter.

Additionally, the company has an impressive earnings surprise history, as it has surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.

Over the past six months, the stock has gained 45% to close the last trading session at $72.19. It has increased 29.6% over the past three months.

JBL’s strong fundamentals are reflected in its POWR Ratings. It has an overall A rating, equating to a Strong Buy.

It has a B grade for Value, Momentum, Sentiment, and Quality. Within the Technology – Services industry, it is ranked #2 out of 79 stocks.

To see the additional POWR Ratings for Stability, Sentiment, and Momentum for JBL, click here.

PFE shares were trading at $46.76 per share on Thursday morning, down $0.69 (-1.45%). Year-to-date, PFE has declined -8.74%, versus a 2.86% rise in the benchmark S&P 500 index during the same period.

About the Author: Kritika Sarmah

Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor’s degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.

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https://www.entrepreneur.com/article/442824