Stock market pressure will continue to be felt despite the fact that inflation is working in the Fed's favor. Worries about a possible recession as a result of the recent financial crisis are likely to keep it under pressure. This month, you might want to consider checking out Glencore (GLNCY), Fortive Corp. Continue reading ....
The market has been impacted by the growing fear of recession, despite inflation being on the decline. Investing in quality stocks that have strong fundamentals such as Glencore plc, Fortive Corporation, and Koc Holding A.S., (KHOLY), can help you to overlook short-term bumps.
Investors cheered on the latest data showing a slowing of inflation. The Producer Price Index declined 0.5% in March, compared to economists' expectations of flat prices.
The PPI data confirmed that the Consumer Price Index (CPI), which was released in March, showed a trend of easing inflation. In March, CPI rose only 0.1% from one month to another and 5% compared to a year earlier, well below expectations for 0.2% and 5,1% respectively.
The Fed's interest rate raising campaign could soon be overdue, given the continued decline of inflationary pressures. The latest Fed minutes suggest that the recent banking crises could force the economy into recession later this summer.
The International Monetary Fund has also recently cut its forecast for global growth to 2.8% this year. This is a 0.1-point reduction from January's projection. While uncertainty is prevalent in the market, you may want to consider investing in stocks with a strong fundamental foundation, such as GLNCY FTV and KHOLY.
Look at the stocks in more detail
GLNCY, a global diversified company, is a leading producer, recycler and marketer of metals and minerals. Its main strategic goal is to accelerate the circularity for critical minerals, particularly those required for the transition into a low carbon economy.
On April 11, GLNCY and FCC Ambito joined Iberdrola to form a partnership for the purpose of providing lithium-ion batteries circularity solutions in Spain and Portugal. The parties plan to combine their knowledge to provide comprehensive recycling and second life solutions for lithium-ion battery, both from production scrap at gigafactories and end-oflife batteries.
This alliance will help the company expand its recycling business to new markets and support the global energy transition.
GLNCY's non-GAAP EV/Sales is currently trading at 0.43x compared to the industry average of 1.5x. The forward EV/EBITDA ratio of the stock is 4.41x, which is 41.6% less than the industry average of 7.55x. The stock's price/sales ratio of 0.33x, which is the forward price/sales for the stock, is also 71.2% less than the industry average.
The ROCE, ROTC and ROTA for the stock in the trailing 12 months are 38.77% (20.34%), 13.06% (13.06%), and compares to industry averages of 11.61, 6.89% and 5.34%.
GLNCY’s net revenue grew 25.6% over the previous year to $255.98 Billion in its fiscal year ending December 31, 2022. The adjusted EBITDA of the company grew by 59.7% to $34.06 Billion, while the attributable net profit for the year was $17.32 Billion, a 248,2% increase from the previous year. The company's earnings per share (EPS) increased by 250% over the past year to $1.33.
GLNCY has grown its revenue and EBITDA at CAGRs between 6% and 46.2 over the last three years. EBIT also grew at CAGRs of 113.3% and 6% respectively during the same time period.
The shares of GLNCY closed the last trading session at $13.19, a 25.5% gain over the previous nine months.
The POWR Ratings of GLNCY show a promising outlook. The stock is rated B in our proprietary system, which translates to Buy. POWR Ratings is calculated by weighing 118 factors to the optimal degree.
It is rated A for Momentum, B for Sentiment and Q for Quality. It is ranked second in the 41-stock Miners Diversified Industry.
GLNCY also rates Growth and Value. All GLNCY ratings are available here.
FTV is a global company that designs, develops and manufactures professional and engineered software and products. The company's segments include Intelligent Operating Solutions, Precision Technologies and Advanced Healthcare Solutions.
The company announced a quarterly dividend of $0.05 per share of common stock with a par value of $0.01 per share on April 6. This dividend is payable by June 30, 2023. FTV's average four-year dividend yield is 0.40 %, and the current $0.28 dividend translates into a yield of 0.42% at current prices. Dividends have increased at a CAGR of 6.2% over the last three years, and 3.6% over the past five.
The price/book multiple for the stock is 2.31, which is 3% less than the average industry of 2.38x.
The stock's trailing-12 month levered FCF is 346.8% greater than the industry average of 4.39%. Its trailing-12 month net income margin (at 12.96%) and EBITDA ratio (25.61%) compare with industry averages at 6.54% and 1321%.
FTV's fourth-quarter sales, which ended December 31, 2020, increased by 11.3% over the previous year to $1.53billion. Gross profit grew by 12.4% to $892.50 millions, and operating profit increased by 44.3% to $290.90 billion.
The company's net income from continuing operations was $313 million, or $0.88 per share. This is an increase of 8.7% and 11,4% respectively.
Analysts predict that FTV's earnings per share (EPS) and revenue in the first fiscal quarter (ending March 31, 2023) will increase by 4.4% and 3.3%, respectively. It also exceeded the consensus estimates for EPS and revenue in each of its previous four quarters. This is encouraging.
FTV's EBITDA and revenue have grown at CAGRs between 8.5% and 16.8% over the last three years. Its levered FCF grew at a CAGR of 56.2%.
Stocks have gained 13.7% in the past 12 months, and 23.9% for the past nine.
FTV's solid prospects are reflected in its POWR ratings. Our proprietary rating system gives the stock an overall B-rating, which is equivalent to a Buy.
The company also received a B-grade for Growth, Momentum and Stability. It was also given a B-grade for Sentiment and Quality. FTV is ranked 19th out of 90 stocks within the B-rated industrial - equipment industry. FTV's Value rating can be found by clicking here.
Koc Holding A.S. (KHOLY)
KHOLY, a holding company based in Turkey, operates through its subsidiaries in Energy, Automotive, Consumer Durables, Finance, Other Business, and other business sectors.
The company expanded its partnership with Turkiye on March 1 by offering the best products and services possible to its customers and partners. This collaboration will bring industry-leading, efficient products and services to Turkish customers.
KHOLY and Ford signed a nonbinding Memorandum of Understanding on February 21. The MoU outlines plans to build one of Europe's largest battery production facilities for commercial electric vehicles near Ankara. This will strengthen the foundation of Ford's future electric strategy in Europe. Analysts believe that such collaborations will strengthen Ford's business.
KHOLY's forward non-GAAP price/sales is 0.23x. This is 81.8% less than the average industry of 1.27x. The stock's EV/Sales of 0.56x is 64.6% less than the industry average of 1.60x. Similarly, its EV/EBITDA forward of 3.10x is 70.6% less than the industry standard of 10.52x.
KHOLY’s total revenue grew 160.1% from the previous year to TL901.86 ($46.64) billion. The gross profit increased by 183.3% compared to the previous year, reaching TL226.84 ($11.73 billion). Operating profit and profit of the company for the period were TL149.35 ($7.72) billion and TL118.22 ($6.11 billion), respectively, representing a 330.7% increase and 351.5% increase year-over-year.
Analysts expect KHOLY to have a revenue increase of 29.7% over the previous year, to $60.51 Billion for the fiscal year that ends December 2024. It is a great thing that the company has exceeded revenue estimates for each of the last four quarters. KHOLY has seen its revenue grow at CAGRs of 80.4% over the last three years and 55.6% in the past five. Its EPS has also grown at a CAGR of 151.5% over the last three years.
The stock's 12-month trailing FCF margin is 10.06%, which is 129.2% more than the industry average of 4.39%. The stock's trailing-12 month ROCE and ROTC are 65.55%, 17.91%, and 373.9% higher than the average industry of 13.83%.
The stock closed the last trading day at $20.90, a 102.3% gain over the nine-month period.
The strong fundamentals of KHOLY are reflected by its POWR ratings. The company's overall A rating translates into a Strong Purchase in our proprietary rating system.
It is rated A for Momentum, Value, and Growth and B for Stability, Sentiment and Quality. It is ranked number one out of 78 stocks within the A-rated industrial - services industry. All KHOLY ratings are available here.
We are still in a bearish market.
Some stocks, like those discussed in this article, may rise. Most will fall as the bear markets claws lower and lower.
Steve Reitmeister, a 40-year investment veteran, has just released the "REVISED:2023 Stock Market Outlook". He explains it as follows:
GLNCY's shares traded at $12.18 on Friday morning. This was down $0.01 (0.08%). GLNCY shares have declined -8.56% year-to-date compared to the benchmark S&P 500 index which has risen 8.06% during the same time period.
Shweta K. Kumari
Shweta pursued a career in investment analysis because of her deep interest in quantitative and financial research. She uses her expertise to help retail investors take informed investment decisions.