The stock market experienced significant volatility in 2022 due to macroeconomic and geopolitical challenges. However, inflation seems to be cooling as it came in lower than expected for two consecutive months in October and November 2022, and the Fed is expected to slow down its rate hike aggression.

Moreover, a strong job report for December has generated substantial market optimism. Moody Analytics’ chief economist Mark Zandi said, “The deeper I look into the bowels of last week’s job market data, the more I think we can skirt a recession.” He added that the U.S. economy could achieve a ‘Goldilocks scenario’ where the unemployment rate remains low, but inflation gets curbed as well.

Given the backdrop, investors might consider buying under-the-radar yet fundamentally sound stocks Jabil Inc. (JBL) and AstroNova, Inc. (ALOT) now.

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 December 15, 2022, Mark Mondello, Chairman, and CEO, said, “Our Q1 FY23 performance was outstanding. I remain confident in our plan moving forward, which is supported by both strong secular tailwinds and continued refinement of our more traditional businesses.”

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. JBL aims to expand its business, with this 10,000-square-foot design center being one of its many strategic moves.

In terms of forward EV/Sales, JBL is currently trading at 0.34x, lower than the industry average of 2.62x. Its forward Price/Sales of 0.28x is lower than the industry average of 2.63x.

JBL’s trailing-12-month ROCE of 41.31% is significantly higher than the 4.99% industry average. Its trailing-12-month ROTA of 4.77% compared with the 1.52% industry average.

JBL’s net revenues came in at $9.64 billion for the first quarter ended November 30, 2022, up 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 3.1% year-over-year to $34.51 billion in 2023. Its EPS is estimated to rise 9.5% year-over-year to $8.38 in 2023. It surpassed EPS estimates in all four trailing quarters. Over the past six months, the stock has gained 38.7% to close the last trading session at $72.19.

JBL’s POWR Ratings reflect this promising outlook. It has an overall A rating, equating to a Strong Buy. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has a B grade for Value, Sentiment, Momentum, 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.

AstroNova, Inc. (ALOT)

ALOT manufactures and distributes a range of specialty printers and data acquisition and analysis systems. The company operates through two segments: Product Identification and Test & Measurement.

On December 7, 2022, Greg Woods, President, and CEO, said, “We posted solid results in the third quarter, generating record revenue that reflected a better-than-expected contribution from our August acquisition of Astro Machine coupled with growth across our base business.”

In terms of trailing-12-month EV/Sales, ALOT is currently trading at 0.96x, 63.8% lower than the industry average of 2.65x. Its trailing-12-month Price/Sales of 0.72x is 72.2% lower than the industry average of 2.60x.

ALOT’s revenues came in at $39.41 million for the third quarter that ended October 29, 2022, up 36.6% year-over-year. Its gross profit increased 20.2% year-over-year to $12.48 million. Also, its EPS came in at $0.04 compared to a loss per share of $0.06 in the year-ago period.

ALOT’s revenue is expected to increase by 6.4% year-over-year to $125.03 million in 2023. Over the past nine months, the stock has lost 12.1% to close the last trading session at $13.12. However, it has gained 2.3% year-to-date.

ALOT has an overall A rating, equating to a Strong Buy in our proprietary rating system.

It has an A grade for Value and Sentiment and a B for Momentum and Quality. The stock is ranked first among 49 in the Technology – Hardware industry. Click here to access the additional POWR Ratings for ALOT (Stability and Growth).

JBL shares were trading at $74.66 per share on Wednesday afternoon, up $2.47 (+3.42%). Year-to-date, JBL has gained 9.47%, versus a 2.99% rise in the benchmark S&P 500 index during the same period.

About the Author: Rashmi Kumari

Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions. More...

More Resources for the Stocks in this Article