The stock market has been under pressure due to various macroeconomic and geopolitical factors. Concerns over the multi-decade high inflation, continued Russia-Ukraine crisis, skyrocketing energy and commodity prices, and lingering supply chain disruptions are making investors pull money out of the stock market.
The May consumer price index witnessed the highest increase in four decades, which is expected to bring in further aggressive monetary tightening by the Federal Reserve. Investors have been fearful of the Fed’s aggressive interest rate hikes. Many analysts believe that raising the benchmark interest rates more aggressively may lead to the economy slipping into a recession.
Shares of many prominent companies belonging to different industries crucial for the economy’s functioning have lost significantly due to the market correction. However, once the concerns over the economic issues subside, these fundamentally strong stocks are expected to bounce back strongly due to their solid fundamentals and growth prospects.
Shell plc (SHEL), Cheniere Energy, Inc. (LNG), QUALCOMM Incorporated (QCOM), AT&T Inc. (T), and Taiwan Semiconductor Manufacturing Company Limited (TSM) are five such stocks well-positioned to see a big rebound from their current price levels. So, these stocks could be solid additions to your portfolio. These stocks are rated ‘Strong Buy’ or ‘Buy’ in our proprietary POWR Ratings system.
Shell plc (SHEL)
Headquartered in London, the United Kingdom, SHEL is an international energy and petrochemical company. The company is engaged in the exploration, production, refining, and marketing of oil and natural gas and the manufacturing and marketing of chemicals. Its businesses include Upstream, Integrated Gas, Renewables and Energy Solutions, and Downstream.
On March 31, 2022, SHEL announced that Shell Trinidad and Tobago had started production on Block 22 and NCMA-4 in Trinidad and Tobago's North Coast Marine Area.
Wael Sawan, SHEL’s Director of Integrated Gas, Renewable and Energy Solutions, said, “Colibri, along with other development projects, will see natural gas going into both the domestic petrochemical markets and into LNG exports, in line with energy ambitions of Trinidad and Tobago.”
SHEL’s revenue increased 51.2% year-over-year to $84.20 billion for the first quarter ended March 31, 2022. The company’s income attributable increased 25.7% year-over-year to $7.11 billion. Also, its EPS came in at $0.93, representing an increase of 29.1% year-over-year.
Analysts expect SHEL’s EPS for the quarter ending September 30, 2022, to increase 122.6% year-over-year to $2.36. Its revenue for the quarter ending June 30, 2022, is expected to increase 87.5% year-over-year to $95.95 billion. It surpassed Street EPS estimates in three of the trailing four quarters. Over the past month, the stock has lost 12.8% to close the last trading session at $50.83.
SHEL’s POWR Ratings reflect solid prospects. The company has an overall B rating, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Momentum and a B grade for Growth, Sentiment, and Quality. It is ranked #7 out of 100 stocks in the B-rated Energy – Oil & Gas industry. Click here to see the other ratings of SHEL for Value and Stability.
Cheniere Energy, Inc. (LNG)
LNG is an energy infrastructure company that is engaged in LNG-related businesses. The company provides clean, secure LNG to integrated energy companies, utilities, and energy trading companies worldwide. The company owns and operates two natural gas liquefaction and export facilities at the Sabine Pass LNG and Corpus Christi LNG terminal.
On June 23, 2022, LNG announced that it had authorized the $8 billion expansion of its Corpus Christi plant and has also signaled further expansions in the future. The expansion will enable it to expand its liquefied natural gas production and help cater to the rising demand.
For the fiscal first quarter ended March 31, 2022, LNG’s revenues increased 142% year-over-year to $7.48 billion. The company’s adjusted EBITDA increased 117% year-over-year to $3.15 billion. Also, its total current assets came in at $5.70 billion, compared to $5.05 billion for the fiscal year ended December 31, 2021.
For the quarter ending June 30, 2022, LNG’s EPS and revenue are expected to increase 354.6% and 94% year-over-year to $3.31 and $5.99 billion, respectively. Over the past month, the stock has lost 2.7% to close the last trading session at $126.84.
LNG’s strong fundamentals are reflected in its POWR Ratings. The stock's overall B rating translates to a Buy in our proprietary rating system.
It has an A grade for Momentum. It is ranked #35 in the same industry. To see the other ratings of LNG for Growth, Value, Stability, Sentiment, and Quality, click here.
QUALCOMM Incorporated (QCOM)
Wireless technology company QCOM provides technologies and products for mobiles, wireless devices, automotive, computing, Internet of Things (IoT), and networking. It is also currently engaged in developing, launching, and expanding 5G technology.
On February 9, 2022, QCOM announced the opening of Extended Reality Labs in Europe. QCOM’s VP and GM of XR, Hugo Swart, said, “These labs will be the key to building out our XR portfolio, which encompasses best-in-class platforms, software, and innovative technology features and to make it available to all developers helping to build out the metaverse through Snapdragon Spaces.”
QCOM’s total revenues increased 40.7% year-over-year to $11.16 billion for the second quarter ended March 27, 2022. The company’s net income increased 66.5% year-over-year to $2.93 billion. Also, its EPS came in at $2.57, representing an increase of 67.9% year-over-year.
Analysts expect QCOM’s EPS for the quarter ending June 30, 2022, to increase 50% year-over-year to $2.88. The company’s revenue for fiscal 2022 is expected to increase 33.4% year-over-year to $44.63 billion. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past month, the stock has lost 7.1% to close the last trading session at $122.16.
QCOM’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
It has a B grade for Growth, Value, and Quality. It is ranked #10 out of 96 stocks in the B-rated Semiconductor & Wireless Chip industry. Click here to see the other ratings of QCOM for Momentum, Stability, and Sentiment.
AT&T Inc. (T)
T provides telecommunications, media, and technology services globally. The company operates through three segments: Communication, WarnerMedia, and Latin America.
For the fiscal first quarter ended March 31, 2022, T’s communications segment operating revenues increased 2.5% year-over-year to $28.87 billion. The company’s total operating expenses declined 10.5% year-over-year to $32.46 billion. Also, its total current assets came in at $76.85 billion, compared to $59.99 billion for the fiscal year ended December 31, 2021.
Over the past month, the stock has declined 0.3% to close the last trading session at $20.32.
T’s POWR Ratings reflect solid prospects. The stock has an overall B rating, equating to a Buy in our proprietary rating system.
It has a B grade for Sentiment. Within the Telecom – Domestic industry, it is ranked #5 out of 21 stocks. To see the other ratings of T for Growth, Value, Momentum, Stability, and Quality, click here.
Taiwan Semiconductor Manufacturing Company Limited (TSM)
Headquartered in Taiwan, TSM is engaged in manufacturing and selling integrated circuits and semiconductor products. Its products apply to personal computers, peripheral products, information applications, wired and wireless communication systems, industrial equipment, digital TVs, and others.
TSM’s net revenue increased 35.5% year-over-year to NT$ 491.07 billion ($16.47 billion) for the first quarter ended March 31, 2022. The company’s net income increased 45.1% year-over-year to NT$202.87 billion ($6.80 billion). Also, its EPS came in at NT$7.82, representing an increase of 45% year-over-year.
Analysts expect TSM’s EPS and revenue for the quarter ending June 30, 2022, to increase 58.1% and 36.2% year-over-year to $1.47 and $18.10 billion, respectively. It surpassed Street EPS estimates in three of the trailing four quarters. Over the past month, the stock has lost 6.4% to close the last trading session at $84.91.
TSM’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.
It has an A grade for Quality and a B grade for Growth, Stability, and Sentiment. It is ranked #24 in the Semiconductor & Wireless Chip industry. Click here to see the other ratings of TSM for Value and Momentum.
SHEL shares rose $0.42 (+0.83%) in premarket trading Thursday. Year-to-date, SHEL has declined -1.81%, versus a -20.59% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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