The POWR Ratings are especially useful in this market environment. The stock market is trading at all-time highs, so valuations are high, yet the economy remains impaired by the coronavirus.
The POWR Ratings can help you identify the highest-quality stocks with the best chance of outperforming. Therefore, you should pay attention to the stocks and sectors being upgraded and downgraded.
Below, we provide a look at the following three POWR Ratings upgrades: Fair Isaac Corporation (FICO), PriceSmart (PSMT), and Snap-on (SNA).
Fair Isaac Corporation (FICO)
FICO provides tech and solutions that make Enterprise Decision Management that much easier for businesses. FICO’s products and services automate processes through the application of intelligence to interactions with customers. From boosting efficiency to hiking sales, reducing losses resulting from fraud, adhering to dynamic compliance demands, and managing credit risk, FICO helps in myriad ways.
FICO has B grades in the Momentum, Sentiment, and Quality components of the POWR Ratings. You can find out how FICO fares in terms of the Value, Growth, and Stability components by clicking here. Out of the 105 publicly traded companies in the Financial Services (Enterprise) category, FICO is ranked third. You can find out more about the Financial Services (Enterprise) space by clicking here.
FICO’s fourth-quarter revenue was an impressive $374.4 million. This figure surpassed analysts’ expectations of $316.4 million. The company’s quarterly adjusted net income was $97 million, equating to $3.25 per share as compared to the anticipated $2.32. FICO’s decision management software applications offerings enjoyed a sales spike of 12% as a result of heightened demand for debt management and fraud detection services.
The analysts are bullish on FICO, setting an average price target of $515.50 for the stock. This means FICO has nearly 8% upside. The analysts’ high target for the stock is $550 while the low target is $475.
FICO has a six-month price return of 9.04%, a ’20 price return of 36.39%, and a ’19 price return of 100.36%.
PSMT operates membership shopping centers throughout the Caribbean and Latin America. PSMT’s warehouse shopping centers provide high-quality food at low prices. PSMT has B grades in the Stability and Value components of the POWR Ratings. You can find out more about PSMT’s performance in the Quality, Sentiment, Growth, and Momentum categories by clicking here.
Out of the 41 stocks in the Grocery/Big Box Retailers space, PSMT is ranked 13th. If you are interested in learning more about the Grocery/Big Box Retailers segment, click here.
The analysts have established an average price target of $103 for PSMT, meaning it has nearly 4% upside potential. PSMT has a year-to-date price return of 11.85%. The stock had a ’20 price return of 29.67% and a ’19 price return of 21.59%.
PSMT’s success has set the stage for the addition of additional locations. The company recently launched its eighth warehouse-like shopping site in Costa Rica. The company has a total of 47 warehouses. PSMT rebounded quite nicely in ’20 thanks to its renewed focus on customers, resulting in a spike in membership renewal rates. PSMT members are renewing at more than an 86% clip, meaning they are quite satisfied with the PSMT shopping experience. Add in the fact that shoppers are likely to continue loading up on food and other essentials in the months ahead as the pandemic continues to drag on and ’21 is looking even rosier for PSMT.
SNA’s tools, equipment, and diagnostic solutions are made for those who make a living using their hands. Examples of SNA products include power tools, hand tools, shop equipment, storage solutions, and diagnostics software.
SNA has an A grade in the Quality component of the POWR Ratings along with a B Value component. If you would like to find out more about how SNA fares in terms of the Momentum, Stability, and Growth components, click here.
SNA is reasonably priced at $188 as its forward P/E ratio is a reasonable 15.57. The stock is trading about $5 below its 52-week high of $193.54. Out of 64 publicly traded companies in the Home Improvement & Goods sector, SNA is ranked 13th. You can learn more about the Home Improvement & Goods sector by clicking here.
With a strong balance sheet and a dividend of just under 3%, it is hard to ignore SNA. Though the reduction in vehicle purchases and use has hurt the company during the pandemic, herd immunity achieved through widespread vaccinations sets the stage for SNA to excel in ’21 and beyond.
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PSMT shares were trading at $102.88 per share on Wednesday morning, up $0.42 (+0.41%). Year-to-date, PSMT has gained 12.94%, versus a 4.13% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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