A global slowdown seems imminent in 2023. However, many experts now believe that the U.S. economy might be able to avoid severe damage. Moreover, economists surveyed by Dow Jones expect the consumer price index rose by 6.5% in December, down from 7.1% in November 2022.
In addition, inflation expectations dropped to the lowest levels since 2021. On the other hand, despite a fall in wage growth, the job market remains stable, adding 223,000 jobs in December. President Biden said, “The unemployment rate is the lowest in 50 years. We have just finished the two strongest years of job growth in history.”
Such circumstances have raised the odds of a ‘soft landing,’ where the Fed achieves price stability while avoiding a recession. Also, benchmark indices are expected to stage a recovery this year amid rising optimism.
Given this backdrop, we think investors could consider buying quality stocks, VEON Ltd. (VEON), Berry Corporation (BRY), Rimini Street, Inc. (RMNI), and Nature’s Sunshine Products, Inc. (NATR). These stocks are currently trading under $10.
VEON Ltd. (VEON)
Headquartered in Amsterdam, the Netherlands, VEON and its subsidiaries provide mobile and fixed-line telecommunications services. It offers voice, data, and other telecommunication services.
VEON’s trailing-12-month gross profit margin of 76.90% is 52.8% higher than the industry average of 50.32%. Its trailing-12-month EBITDA margin of 36.24% is 90.2% higher than the industry average of 19.05%.
VEON’s revenue came in at $2.08 billion for the 2022 third quarter, up 3.6% year-over-year. Its service revenue increased 7.9% year-over-year to $1.97 billion, while its EBITDA came in at $889 million, up marginally year-over-year.
VEON’s forward EV/Sales of 1.36x is 27.6% lower than the industry average of 1.87x, while its forward Price/Sales of 0.10x is 92.1% lower than the industry average of 1.29x.
Analysts expect VEON’s revenue to increase 6.2% year-over-year to $8.27 billion for the yet-to-be-reported fiscal year 2022. The stock has gained 16.5% over the past six months to close the last trading session at $0.52.
VEON’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.
VEON has an A grade for Value and a B grade for Growth, Sentiment, and Quality. VEON is ranked first among the 47 stocks within the A-rated Telecom- Foreign industry. Click here for additional VEON ratings (Momentum and Stability).
Berry Corporation (BRY)
Independent upstream energy company BRY develops and produces conventional oil reserves in the western United States. It operates in two segments, Development and Production; and Well Servicing and Abandonment.
On November 2, 2022, Trem Smith, BRY’s Board Chair and CEO, said, “At the current oil strip pricing and with a strategy of holding our production flat, we are on track to return to our shareholders the equivalent of our current market capitalization of approximately $700 million in just three-plus years.”
BRY’s trailing-12-month gross and EBITDA margins of 52.25% and 41.61% are 27.8% and 34% higher than the industry averages of 40.90% and 31.05%, respectively.
BRY’s total revenues and other came in at $376.45 million for the third quarter ended September 30, 2022, up 162.5% year-over-year. Its adjusted net income came in at $45.52 million, up 294.5% year-over-year. Also, its adjusted EPS came in at $0.55, up 292.9% year-over-year.
BRY’s forward EV/Sales of 1.31x is 27.7% lower than the industry average of 1.81x. Its forward Price/Sales of 0.83x is 37.5% lower than the industry average of 1.32x.
BRY’s revenue and EPS are expected to rise 49.6% and 676% year-over-year to $815.13 million and $1.94 for the yet-to-be-reported fiscal year 2022. Over the past month, the stock has gained 10.7% to close the last trading session at $8.10.
BRY’s strong fundamentals are reflected in its POWR Ratings. It has an overall B rating, equating to a Buy in our proprietary rating system.
Also, the stock has an A grade for Value and Momentum and a B for Growth. Within the B-rated Energy – Oil & Gas industry, it is ranked #6 out of 92 stocks. Click here for BRY’s additional POWR Ratings for Stability, Sentiment, and Quality.
Rimini Street, Inc. (RMNI)
RMNI provides enterprise software products, services, and support for various industries. The company offers software support services for Oracle and SAP enterprise software products.
On December 6, 2022, RMNI launched Rimini Connect™, a new integration, and interoperability solution suite. This new product is expected to offer straightforward solutions for continuously changing integration and interoperability requirements, thereby contributing to the company’s growth.
RMNI’s trailing-12-month gross profit margin of 62.91% is 27% higher than the industry average of 49.53%, while its trailing-12-month net income margin is substantially higher than the industry average of 3.22%.
RMNI’s revenue came in at $101.93 million for the third quarter that ended September 30, 2022, up 6.6% year-over-year. Its gross profit came in at $62.66 million, up marginally year-over-year. Moreover, its long-term debt came in at $71.44 million for the period ended September 30, 2022, compared to $79.66 million for the period ended December 31, 2021.
RMNI’s forward EV/Sales of 0.79x is 69.9% lower than the industry average of 2.62x. Its forward Price/Sales of 0.89x is 66.4% lower than the industry average of 2.63x.
Street expects RMNI’s revenue to increase 7.7% year-over-year to $436.09 million in 2023. Its EPS is expected to grow 15% per annum for the next five years. Over the past month, the stock has gained 6.3% to close the last trading session at $4.06.
It’s no surprise that RMNI has an overall B rating, which indicates a Buy in our proprietary rating system.
It has a B grade for Value and Quality. RMNI is ranked #28 out of 139 stocks in the Software – Application industry. Get additional RMNI ratings for Growth, Momentum, Stability, and Sentiment here.
Nature’s Sunshine Products, Inc. (NATR)
Natural health and wellness company NATR primarily manufactures and sells nutritional and personal care products in Asia, Europe, North America, Latin America, and internationally.
On November 3, 2022, CEO Terrence Moorehead said, “We remain confident that we will navigate this unique period of volatility and uncertainty, bolstered by our strong balance sheet and team of experts on the ground.”
NATR’s trailing-12-month gross profit margin of 71.59% is 126.2% higher than the industry average of 31.66%. Its trailing-12-month ROTA of 4.96% is compared with the industry average of 3.62%.
For its third quarter that ended September 30, 2022, NATR’s selling, general, and administrative expenses came in at $36.79 million, down 6.9% year-over-year. Its total current liabilities came in at $63.89 million for the period ended September 30, 2022, compared to $76.67 million for the period ended December 31, 2021.
NATR’s forward EV/Sales of 0.35x is 79.6% lower than the industry average of 1.70x. Its forward Price/Sales of 0.43x is 63.5% lower than the industry average of 1.17x.
For 2023, NATR’s revenue is expected to rise marginally year-over-year to $420.61 million. Over the past month, the stock has gained 15.2% to close the last trading session at $9.33.
NATR has an overall A grade, translating to a Strong Buy rating in our POWR Ratings system.
It has an A grade for Value and Quality and a B for Stability and Sentiment. It is ranked #2 out of 10 stocks in the A-rated Medical – Consumer Goods industry. To see additional POWR Ratings for Growth and Momentum for NATR, click here.
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VEON shares fell $0.02 (-3.47%) in premarket trading Wednesday. Year-to-date, VEON has gained 2.04%, versus a 2.53% 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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