Amid widespread macro headwinds, recession fears are running amok. The unemployment rate is expected to hit 4.4% by 2023-end. While recession seems to be imminent, it is expected to be mild.
In addition, markets are still hopeful of a year-end rally. SEI Chief Investment Officer Jim Smigiel had earlier stated the possibility of a Santa Claus rally.
Furthermore, CNBC’s Jim Cramer recently assured investors saying, “We still have a Santa Claus rally coming.” The S&P 500 has historically mostly gained during the last week of December and the first week of January, raising optimism for the coming weeks.
Given the backdrop, we think quality stocks Stellantis N.V. (STLA), Albertsons Companies, Inc. (ACI), Poseida Therapeutics, Inc. (PSTX), and Civeo Corporation (CVEO) could be ideal buys under $30 now.
Stellantis N.V. (STLA)
Headquartered in Hoofddorp, the Netherlands, STLA designs, engineers, manufactures, distributes, and sells automobiles and light commercial vehicles, engines, transmission systems, metallurgical products, and production systems worldwide.
On December 23, 2022, STLA announced its plans to acquire a stake in Symbio, a Faurecia Michelin hydrogen company and leader in fuel cell technologies for the mobility industry.
Also, on December 22, 2022, STLA acquired aiMotive, a leading developer of advanced artificial intelligence and autonomous driving software. Such lucrative acquisitions are expected to bolster the company’s future productivity.
STLA’s consolidated shipments came in at 1,281,000 units for the 2022 third quarter, up 13.3% year-over-year. Its net revenues came in at €42.10 billion ($44.70 billion), up 29.1% year-over-year, while STLA’s North America net revenues came in at €21.07 billion ($22.37 billion), up 35.7% year-over-year.
STLA’s forward EV/Sales of 0.14x is 87.5% lower than the industry average of 1.12x. Its forward Price/Sales of 0.25x is 70.4% lower than the industry average of 0.83x.
For fiscal 2022, STLA’s revenue and EPS are expected to rise 9.3% and 2.5% year-over-year to $187.95 billion and $5.77, respectively. The stock has gained 8.6% over the past three months and 5.6% over the past six months to close the last trading session at $13.88.
STLA’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our POWR Rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Also, the stock has an A grade for Value and a B for Stability and Sentiment. Within the Auto & Vehicle Manufacturers industry, it is ranked #8 out of 62 stocks. Click here for the additional POWR Ratings for Growth, Momentum, and Quality for STLA.
Albertsons Companies, Inc. (ACI)
ACI and its subsidiaries operate food and drug stores in the United States. The company’s food and retail drug stores offer grocery, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services.
On November 10, 2022, ACI launched its new, premium Vinaforé Collection. The private label collection comprises five distinctively designed varietals from some of the best wine regions across the globe and is expected to offer customers a scintillating wine experience.
ACI’s net sales and other revenue came in at $17.92 billion for the second quarter that ended September 10, 2022, up 8.6% year-over-year. Its adjusted net income came in at $418.30 million, up 13.2% year-over-year, while its adjusted EPS came in at $0.72, up 12.5% year-over-year.
ACI’s forward EV/Sales of 0.29x is 82.4% lower than the industry average of 1.66x. Its forward Price/Sales of 0.15x is 86.6% lower than the industry average of 1.09x.
ACI’s revenue is estimated to increase 6.9% year-over-year to $76.85 billion in 2023. Its EPS is estimated to rise 8% per annum for the next five years. It surpassed EPS estimates in all four trailing quarters. The stock has gained 2.1% over the past month and 6.6% over the past three months to close the last trading session at $20.98.
ACI’s overall A rating equates to a Strong Buy in our POWR Ratings system. It has an A grade for Value and a B for Sentiment and Quality. It is ranked #6 out of 39 stocks in the A-rated Grocery/Big Box Retailers industry.
Beyond what is stated above, we’ve also rated ACI for Growth, Momentum, and Stability. Get all ACI ratings here.
Poseida Therapeutics, Inc. (PSTX)
Clinical-stage biopharmaceutical company PSTX focuses on developing therapeutics for patients with high unmet medical needs.
On November 10, 2022, Mark Gergen, PSTX’s CEO, said, “Despite macro-economic and market challenges facing our industry, we continue to focus on executing on our top priorities.”
He added, “We are excited about our collaborations with Takeda and Roche, which have already begun to deliver as we achieved our first clinical milestone under the Roche collaboration.”
PSTX’s net income came in at $70.41 million for the third quarter that ended September 30, 2022, compared to a loss of $42.42 million in the year-ago period. Its EPS came in at $0.92, compared to a loss per share of $0.68 in the previous period.
Moreover, its total assets came in at $380.48 million for the period ended September 30, 2022, compared to $269.31 million for the period ended December 31, 2021.
PSTX’s forward EV/Sales of 1.50x is 60.1% lower than the industry average of 3.77x. Its forward Price/Sales of 2.57x is 38.8% lower than the industry average of 4.19x.
PSTX’s revenue is expected to increase 466.8% year-over-year to $177.07 million in 2022. Its EPS is expected to increase 78.1% year-over-year in 2022. It surpassed EPS estimates in three of four trailing quarters. The stock has gained 17.4% over the past month and 65.3% over the past three months to close the last trading session at $5.14.
PSTX has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Growth and a B for Value, Sentiment, and Quality.
PSTX is ranked #9 out of 159 stocks in the Medical – Pharmaceuticals industry. Click here to see PSTX’s ratings for Momentum and Stability.
Civeo Corporation (CVEO)
CVEO provides hospitality services to the natural resource industry in Canada, Australia, and the United States. The company develops lodges and villages and mobile accommodations.
On November 15, 2022, CVEO was granted a five-year contract with a leading resources player to provide integrated services at six villages in Western Australia.
The new contract will incorporate accommodation, catering, and retail services; village, mine, and port site cleaning services; facilities maintenance; and health and wellbeing solutions. CVEO will offer top customer service under this contract, strengthening its consumer base.
CVEO’s total revenues came in at $184.23 million for the third quarter that ended September 30, 2022, up 18.8% year-over-year. Its net income came in at $5.22 million, up substantially year-over-year.
Also, its cash and cash equivalents came in at $8.36 million for the period ended September 30, 2022, compared to $6.28 million for the period ended December 31, 2021.
CVEO’s forward EV/Sales of 0.91x is 44.5% lower than the industry average of 1.63x. Its forward Price/Sales of 0.61x is 51.5% lower than the industry average of 1.25x.
Street expects CVEO’s revenue to increase 14.7% year-over-year to $681.72 million in 2022. Its EPS is expected to grow 625% year-over-year to $0.21 in 2022. It surpassed EPS estimates in three of four trailing quarters. The stock has gained 2.2% over the past month and 14% over the past three months to close the last trading session at $29.94.
CVEO has an overall A (Strong Buy) rating in our POWR Ratings system. It has an A grade for Sentiment and a B for Value, Stability, and Quality.
CVEO is ranked #2 out of 43 stocks in the B-rated Outsourcing – Business Services industry. Click here to check additional CVEO ratings (Growth and Momentum).
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STLA shares rose $0.09 (+0.65%) in premarket trading Friday. Year-to-date, STLA has declined -26.01%, versus a -18.54% 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. More...
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