The Fed is locked up in its tough battle against inflation, and its continued hawkish stance is raising the odds of a recession. According to the International Monetary Fund, global growth will slow down to 2.7% next year, and it will feel like a recession for many. The fund also anticipates that inflation will reach 8.8% in late 2022 and will “remain elevated for longer than previously expected.”

On the other hand, CNBC’s Jim Cramer expects a powerful rally later this month or the beginning of November, as per historical trends. He noted that the market tends to bottom in mid-to-late October and then leads into a “powerful” rally, providing a terrific buying opportunity. 

Given this scenario, we think investors should load up fundamentally robust stocks, Pfizer Inc. (PFE), Stellantis N.V.(STLA), APA Corporation (APA), Ryerson Holding Corporation (RYI), and Forrester Research, Inc. (FORR) which are currently trading under $50.

Pfizer Inc. (PFE)

PFE discovers, develops, manufactures, distributes, and sells biopharmaceutical products worldwide. It offers medicines and vaccines in various therapeutic areas. The company serves wholesalers, retailers, hospitals, clinics, government agencies, as well as disease control and prevention centers.

On October 5, PFE announced the completion of its acquisition of Global Blood Therapeutics, Inc. (GBT), a biopharmaceutical company involved in the discovery, development, and delivery of life-changing treatments for patients with sickle cell disease (SCD). This acquisition reinforces PFE’s commitment to SCD and gives the potential to address critical needs.

In the same month, PFE acquired Biohaven Pharmaceutical Holding Company Ltd. (BHVN), the maker of NURTEC® ODT (rimegepant), an innovative migraine therapy approved for both acute treatment and prevention of episodic migraine in adults. This should expand the company’s calcitonin gene-related peptide portfolio and better serve the needs of migraine patients worldwide.

PFE’s revenue increased 46.8% year-over-year to $27.74 billion in the second quarter ended July 3. Its income from continuing operations grew 69.6% from the year-ago value to $9.88 billion, while its adjusted income improved 93.5% year-over-year to $11.66 billion. The company’s adjusted earnings per common share increased 92.5% from its year-ago value to $2.04.

The consensus EPS estimate of $1.36 for the fiscal quarter ending December 2022 indicates a 26.3% improvement year-over-year. Analysts expect its revenue to rise 4.3% year-over-year to $24.85 billion for the same quarter.

The stock gained marginally intraday to close the last trading session at $41.92.

PFE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, translating to Strong Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

PFE is also rated an A in Value and a B in Quality. It is ranked #14 of 164 stocks in the Medical – Pharmaceuticals industry.

Beyond what is stated above, we’ve also rated PFE for Growth, Momentum, Sentiment, and Stability. Get all PFE ratings here.

Stellantis N.V.(STLA)  

Headquartered in Hoofddorp, Netherlands, STLA designs, engineers, manufactures, distributes, and sells automobiles and light commercial vehicles, engines, transmission systems, metallurgical products, and production systems. The company offers its products under various brand names, including Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, Fiat, Fiat Professional, and Jeep.

On October 10, STLA announced the signing of a non-binding Memorandum of Understanding (MOU) with GME Resources Limited for the future offtake and sale of battery-grade nickel and cobalt sulfate products. This should strengthen STLA’s value chain for electric vehicle battery production and help achieve its decarbonization target.

STLA’s net revenues rose 21.2% year-over-year to €88 billion ($88.12 billion) for the first half-yearly period ended June 30, 2022. The company’s adjusted operating income increased 46.6% year-over-year to €12.37 billion ($12.39 billion), while its net profit increased 37.2% year-over-year to €7.96 billion ($7.97 billion). 

STLA’s revenue is expected to come in at $177.19 billion for the fiscal year ending December 2023, indicating a 4.9% year-over-year increase.

The stock has slumped marginally intraday to close the last trading session at $11.81.  

It’s no surprise that STLA has an overall rating of A, which translates to Strong Buy in our proprietary rating system. It also has an A grade in Value and a B in Stability, Sentiment, and Quality. STLA is ranked #1 of 64 stocks in the Auto & Vehicle Manufacturers industry.  

In addition to the POWR Ratings stated above, we have also given STLA grades for Growth and Momentum. Get all STLA ratings here.

APA Corporation (APA)

APA, through its subsidiaries, explores, develops, and produces oil and gas properties in the United States, Egypt, and the United Kingdom. The company also operates gathering, processing, and transmission assets in West Texas and holds ownership in four Permian-to-Gulf Coast pipelines.

On September 23, APA announced the engagement of GHD, a privately-owned global professional services company specializing in implementing and verifying sustainability projects. 

“We are pleased to work with GHD to support our ongoing efforts to verify the emissions we eliminate through various environmental projects,” said APA Environment, Health and Safety (EHS) Vice President Jessica Jackson. The company expects this to help meet its environmental goals and eliminate at least 1 million tonnes of CO2 by the end of 2024.

In the same month, APA’s Board of Directors announced an increase in its dividend on common shares from an annualized rate of 50 cents per share to $1.00 per share. This demonstrates the company’s strong balance sheet and cash flow positioning.

For the fiscal second quarter that ended June 30, 2022, APA’s total revenues came in at $3.05 billion, up 71.3% year-over-year. Net income attributable to APA increased 193% year-over-year to $926 million. Moreover, its net income per share increased 230.5% year-over-year to $2.71.

The consensus revenue estimate of $2.43 billion indicates an increase of 47.2% year-over-year in the quarter ended September 2022. Its EPS estimate of $2.12 represents a 116.5% improvement year-over-year in the same period. The company also beat the consensus EPS estimates in three of the trailing four quarters.

The stock has gained 65.8% over the past year and 50.5% year-to-date to close the last trading session at $40.48.

APA has an overall B grade, equating to a Buy in our POWR Ratings system. The stock has an A grade for Momentum and Quality and a B for Growth and Value. In the B-rated Energy – Oil & Gas industry, APA is ranked #17 of 94 stocks. 

We have also rated APA for Stability and Sentiment. Click here to learn the APA’s POWR Ratings.

Ryerson Holding Corporation (RYI)

RYI processes and distributes industrial metals in the United States, Canada, Mexico, and China. It offers a line of products in carbon steel, stainless steel, alloy steels, aluminum, nickel, and red metals.

On September 1, 2022, RYI acquired Howard Precision Metals, Inc., one of the largest aluminum distributors in the Midwest. “Its processing capabilities complement Ryerson’s existing non-ferrous franchise, and we are excited to recognize these synergies,” said Mike Burbach, RYI’s Chief Operating Officer.

During the second quarter that ended June 30, 2022, RYI’s revenue increased 22.9% year-over-year to $1.74 billion. Its gross profit grew 81.3% from the prior-year period to $465.90 million. The company’s net income and EPS increased 74% and 75.3% year-over-year to $196.40 million and $5.10, respectively. Also, its adjusted EBITDA came in at $298 million, up 221.8% from the year-ago value.

Analysts expect RYI’s EPS for the fiscal year ending December 2022 to come in at $13.02, indicating an increase of 74.5% year-over-year. Also, the company’s revenue is expected to grow 9.6% year-over-year to $6.22 billion in the same period. The company has an excellent earnings surprise history as it surpassed the consensus EPS estimates in each of the trailing four quarters.

Over the past three months, the stock has gained 41.5% to close the last trading session at $29.27. It gained 32.9% over the past year.

RYI’s strong fundamentals are reflected in its POWR Ratings. The company has an overall rating of A, equating to a Strong Buy in our proprietary rating system. It also has an A grade for Value and a B for Growth, Sentiment, and Quality. RYI is ranked #2 out of the 37 stocks in the B-rated Industrial – Metals industry. 

Click here to see the other ratings of RYI for Momentum and Stability.

Forrester Research, Inc. (FORR)

FORR is an independent research and advisory services company that operates through its Research; Consulting; and Events segments. The company sells its products and services through direct sales in the United States, Europe, the United Kingdom, Canada, the Asia Pacific, and internationally.

In the fiscal second quarter that ended June 30, 2022, FORR’s net revenues increased 15.2% year-over-year to $148.25 million. Its adjusted income from operations grew 41.8% from the year-ago value to $27.89 million, while its adjusted net income increased 51.4% from the prior year period to $19.22 million. In addition, FORR’s non-GAAP EPS came in at $1, registering an increase of 51.5% year-over-year.

Street expects FORR’s EPS for the fiscal year ending December 2022 to increase 10.1% year-over-year to $2.30. Its revenue for the same period is expected to increase 9.4% year-over-year to $540.98 million. The stock has surpassed the consensus EPS estimates in each of the trailing four quarters, which is impressive.

FORR’s shares have gained 17.2% over the past three years to close the last trading session at $37.89.

FORR’s POWR Ratings reflect solid prospects. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. It also has an A grade for Growth, Sentiment, and Quality and a B for Value and Stability. FORR is ranked first in the 103-stock Financial Services (Enterprise) industry. 

To access FORR’s rating for Momentum, click here.

PFE shares were trading at $42.37 per share on Wednesday morning, up $0.45 (+1.07%). Year-to-date, PFE has declined -26.55%, versus a -23.94% rise in the benchmark S&P 500 index during the same period.

About the Author: Komal Bhattar

Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...

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