According to the Bureau of Economic Analysis, overall consumer spending rose by 0.2% in May, down from 0.9% growth a month earlier, flaming concerns about a potential recession in the U.S. economy. In addition, consumer sentiment fell to its lowest level ever in June, according to a survey by the University of Michigan.
Moreover, the stock market has witnessed extreme volatility on concerns over the Fed’s aggressive interest rate hikes to fight the multi-decade high inflation. Investors are worried that the central bank’s aggressive monetary policy tightening could lead to an economic slowdown, making it difficult for businesses to stay afloat.
Given this backdrop, we think it could be wise to invest in Dover Corporation (DOV), Expeditors International of Washington, Inc. (EXPD), and Sasol Limited (SSL) because of their fundamental strength and growth prospects. These stocks have been recently upgraded to Buy in our proprietary POWR Ratings system.
Dover Corporation (DOV)
DOV provides equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services worldwide. The company operates through Engineered Products, Clean Energy & Fueling, Imaging and Identification, Pumps and Process Solutions, and Climate & Sustainability Technologies segments.
On July 5, 2022, DOV announced the acquisition of Malema Engineering Corporation, which will become part of the PSG business unit within Dover's Pumps & Process Solutions segment.
DOV’s revenues surged 10% year-over-year to $2.05 billion in the fiscal first quarter ended March 31, 2022. The company’s adjusted net earnings grew 5% year-over-year to $275 million. Also, its adjusted EPS came in at $1.90, up 5% year-over-year.
For the fiscal quarter ending September 30, 2022, analysts expect DOV’s EPS and revenue to increase 16.2% and 10.7% year-over-year to $2.30 and $2.21 billion, respectively. In addition, it surpassed Street EPS estimates in each of the trailing four quarters.
DOV’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting
The stock has a B grade for Stability, Sentiment, and Quality. Within the B-rated Industrial - Machinery industry, DOV is ranked #24 out of 79 stocks. Click here to see the additional POWR Ratings for DOV (Value, Growth, and Momentum).
Expeditors International of Washington, Inc. (EXPD)
EXPD provides logistics services in the Americas, North Asia, South Asia, Europe, the Middle East, Africa, and India. The company offers air freight services, such as air freight consolidation and forwarding, ocean freight, and ocean services. Its customers include retailing and wholesaling, electronics, technology, and industrial and manufacturing companies.
On May 2, 2022, EXPD’s Board of Directors declared a semi-annual cash dividend of $0.67 per share, payable on June 15, 2022, to shareholders of record as of June 1, 2022.
EXPD’s revenues surged 46% year-over-year to $4.70 billion in the fiscal first quarter ended March 31, 2022. The company’s operating income grew 20% year-over-year to $462 million, while its net earnings came in at $346 million, representing a 21% year-over-year rise. Also, its EPS came in at $2.05, up 23% year-over-year.
Analysts expect EXPD’s revenue to increase 8.9% year-over-year to $18 billion. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters.
It’s no surprise that EXPD has an overall B rating, equating to Buy in our POWR Ratings system. The stock has a B grade for Quality.
Click here to see EXPD’s ratings for Sentiment, Growth, Value, Momentum, and Stability as well. EXPD is ranked #9 out of 17 stocks in the A-rated Air Freight & Shipping Services industry.
Sasol Limited (SSL)
SSL operates as an integrated chemical and energy company in South Africa. The company operates through Mining, Gas, Fuels, Chemicals Africa, Chemicals America, and Chemicals Eurasia segments. It operates coal mines; and develops and manages upstream interests in oil and gas exploration and production.
On June 20, 2022, Sasol Chemicals, a business unit of SSL, and LOTTE Chemical agreed to conduct a pre-feasibility study of a joint project to build, own and operate a plant to produce battery-grade electrolyte solvents. Shelley Grahmann, Vice President of Strategy Development and Optimisation for Sasol Chemicals, said, "This agreement is consistent with our strategy to answer the sustainability challenge through the solutions we provide our customers."
SSL’s EBIT surged 12% year-over-year to R24.31 billion ($1.48 billion) in the fiscal first quarter ended March 31, 2022. The company’s adjusted EBITDA grew 71% year-over-year to R31.80 billion ($1.93 billion). Also, its EPS came in at R23.98, up 2% year-over-year.
Analysts expect SSL’s EPS and revenue to increase 47.9% and 13.1% year-over-year to $3.96 and $15.40 billion, respectively, in fiscal 2022. The stock has gained 37.4% over the past six months to close yesterday’s trading session at $21.02.
SSL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system.
It has an A grade for Growth. Click here to access the additional POWR Ratings for SSL (Quality, Stability, Sentiment, Value, and Momentum). SSL is ranked #23 out of 42 stocks in the A-rated Foreign Oil & Gas industry.
DOV shares were trading at $122.75 per share on Wednesday afternoon, up $0.98 (+0.80%). Year-to-date, DOV has declined -31.93%, versus a -18.49% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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