The cooling inflation, historically tight labor market, China’s move to reopen its economy, and signs of easing energy market stress have all contributed significantly to the improvement in investors’ sentiment in recent weeks. The S&P 500 index’s 8.9% rise in 2023 shows optimism in the stock market.
Moreover, the Federal Open Market Committee (FOMC) raised the interest rate by 25 basis points, marking the central bank’s first explicit acknowledgment of slowing inflation. Federal Reserve Chair Jerome Powell said that his hopes for an economic soft landing, despite very aggressive interest rate rises, remain alive.
Jeffrey Roach, the chief economist at LPL Financial, said, “Inflation is poised to ease further in the coming months, which will give the Fed some leeway to end its rate hiking campaign. History shows us that stocks typically rise after the end of a rate hiking cycle.”
In addition, the IMF expects the world economy to grow 2.9% this year, better than the earlier prediction of 2.7% in October.
Given the brimming optimism, fundamentally strong stocks AbbVie Inc.(ABBV), Vertex Pharmaceuticals Incorporated (VRTX), Murphy USA Inc. (MUSA), MasterCraft Boat Holdings, Inc. (MCFT), and PrimeEnergy Resources Corporation (PNRG) might be the best stocks to invest $1000 right now.
Biopharmaceutical company ABBV engages in the research, development, manufacturing, commercialization, and sale of medicines worldwide. The company’s products are segmented into Immunology; Oncology; Anaesthetics; Neuroscience; Eyecare; Women’s Health; and Others.
On January 17, ABBV’s Allergan Aesthetics announced the launch of the long-awaited SkinMedica Even & Correct Collection, which is clinically proven and formulated to deliver targeted results to even skin tone and reduce the appearance of hyperpigmentation and dark spots on the face.
Carrie Strom, President of Global Allergan Aesthetics and Senior Vice President, said, “With a formulation backed by science, our R&D team has developed an innovative collection to meet patients where they are in their hyperpigmentation journey. SkinMedica continues to be a category leader innovating for all patient skin types.”
Its trailing 12-month EBITDA margin of 51.54% is significantly higher than the 3.91% industry average. Its trailing 12-month gross profit margin of 69.83% is 25.9% higher than the 55.48% industry average.
While ABBV’s four-year average dividend yield is 4.61%, its current annual dividend of $5.92 translates to a 4.04% yield on the current market price. Over the last three years, ABBV’s dividend payouts have grown at 9.2% CAGR.
ABBV’s net revenues rose 3.3% year-over-year to $14.81 billion for the third quarter that ended September 30, 2022. Its net earnings increased 24.2% year-over-year to $3.95 billion. In addition, its EPS increased 29.3% year-over-year to $3.66.
ABBV’s revenue is expected to increase 3.9% year-over-year to $58.28 billion for the yet-to-be-reported fiscal year 2022. Its EPS is expected to increase 8.5% year-over-year to $13.78 in the same year. It has surpassed EPS estimates in three of four trailing quarters, which is impressive.
The stock has gained 3.1% over the past six months to close the last trading session at $144.84. It has a 24-month beta of 0.47.
ABBV’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
ABBV has an A grade for Quality and a B for Growth and Value. Within the Medical – Pharmaceuticals industry, it is ranked #8 out of 171 stocks.
Click here to access the additional POWR Ratings for ABBV for Stability, Momentum, and Stability.
Vertex Pharmaceuticals Incorporated (VRTX)
VRTX engages in developing and commercializing therapies for treating cystic fibrosis; and has multiple current clinical and research activities to expand and extend its treatment. The company uses its understanding of causal human biology to develop exploratory medicines for other severe diseases.
VRTX’s trailing-12-month EBITDA margin of 38.54% is 885.7% higher than the 3.91% industry average. Its trailing-12-month asset turnover ratio of 0.59x is 73.5% higher than the 0.34x industry average.
VRTX’s net product revenue increased 17.7% year-over-year to $2.33 billion in the third quarter that ended September 30, 2022. The company’s non-GAAP operating income grew 11% year-over-year to $1.29 billion. Non-GAAP net income increased 14% year-over-year to $1.04 billion, while its non-GAAP net income per share increased 14.3% from its year-ago value to $4.01.
Analysts expect VTRX’s revenue for the fiscal year 2022 to be $8.39 billion, representing a 17.9% year-over-year growth. The company’s EPS will likely increase 12.5% year-over-year to $14.65 in the same year. The company has an impressive earnings surprise history, as it surpassed the consensus revenue estimates in each of the trailing four quarters.
It has gained 19.8% over the past year to close its last trading session at $303.78. Its 24-month beta is 0.41.
The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
VRTX also has an A grade for Quality and B for Value and Sentiment. It is ranked #2 among 401 stocks in the Biotech industry.
To access additional ratings for VRTX’s Growth, Stability, and Momentum, click here.
Murphy USA Inc. (MUSA)
MUSA is involved in the marketing of convenience goods and retail motor gasoline products. The business runs retail establishments under the QuickChek, Murphy USA, and Murphy Express brands. It also operates a few wholesale and product supply assets, including product distribution terminals and pipeline positions.
MUSA’s trailing-12-month ROCE, ROTC, and ROTA of 83.48%, 19.56%, and 16.06% are 542%, 206.6%, and 253.1% higher than their respective industry average of 13%, 6.38%, and 4.55%.
During the fourth quarter (ended December 31, 2022), MUSA’s total operating revenues increased 12.6% year-over-year to $5.37 billion, while its income from operations rose 7.8% from the previous year’s quarter to $173.50 million. The company’s net income rose 8.2% year-over-year to $117.70 million, and its EPS grew 23.2% from the year-ago value to $5.21.
Its revenue and EPS are expected to come in at $4.89 billion and $4.04 in the fiscal 2023 first quarter ending March 2023. Moreover, MUSA has surpassed the consensus EPS and revenue estimates in three of the four trailing quarters.
The stock has gained 32.4% over the past year to close the last trading session at $260.86. It has a 24-month beta of 0.59.
MUSA’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
The stock has a B grade for Growth, Value, and Quality. Within the Specialty Retailers industry, it ranked #2 out of 46 stocks.
Beyond what is stated above, we’ve also rated MUSA for Stability, Momentum, and Sentiment. Get all MUSA ratings here.
MasterCraft Boat Holdings, Inc. (MCFT)
MCFT designs, manufactures, and markets recreational powerboats. The company operates through four segments: MasterCraft; Crest; NauticStar; and Aviara.
MCFT’s trailing-12-month levered FCF margin of 10.74% is 692.4% higher than the 1.36% industry average. Its trailing-12-month ROTC of 36.54% is 472.6% higher than the 6.38% industry average.
MCFT’s net sales and revenues increased 29.7% year-over-year to $169.52 million for the first quarter that ended October 2, 2022. Its gross profit rose 50.3% year-over-year to $45.97 million, while its operating income grew 96.7% year-over-year to $32.22 million.
MCFT’s EPS is expected to grow 11.2% year-over-year to $1.01 in the fiscal second quarter that ended December 2022. Its revenue will likely be $150.67 million in the same quarter. It has surpassed the revenue and EPS estimates in all four trailing quarters.
Over the past three months, the stock has gained 46.4% to close the last trading session at $30.82. It has a 24-month beta of 0.96.
MCFT has an overall A rating, equating to a Strong Buy in our POWR Ratings system.
It also has a B grade for Growth, Value, Sentiment, and Quality. MCFT is ranked #2 in the 37-stock Athletics & Recreation industry.
Click here to see the additional POWR Ratings for MCFT (Momentum and Stability).
PrimeEnergy Resources Corporation (PNRG)
PNRG acquires, develops, and produces oil and natural gas as an independent oil and gas company. The company also provides well-servicing support operations, site preparation, and construction services for oil and gas drilling and reworking operations for its operations and as a contractor to third parties.
Its trailing-12-month levered FCF margin of 20.18% is 199.8% higher than the 6.73% industry average. Its trailing-12-month net income margin of 28.49% is 115.9% higher than the 13.20% industry average.
During the third quarter, which ended September 30, 2022, PNRG’s revenues increased 129.1% year-over-year to $39.65 million. The company’s net income came in at $13.15 million or $4.88 per share, compared to a loss of $1.16 million or $0.58 per share during the previous-year quarter.
PNRG’s shares have gained 21.5% over the past three months to close the last trading session at $91.74.
The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
PNRG is also graded an A for Quality and a B for Growth, Momentum, and Sentiment. It is ranked first among the 93 stocks in the B-rated Energy – Oil & Gas industry.
In addition to the POWR Rating grades we’ve stated above, one can see PNRGs grades for Value and Stability here.
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ABBV shares fell $0.05 (-0.03%) in premarket trading Friday. Year-to-date, ABBV has declined -9.56%, versus a 7.57% 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. More...
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