Prices increased 7.1% annually in November 2022, down from the consensus estimate of 7.3%. The markets rejoiced at the better-than-expected inflation data. Ryan Sweet, the chief U.S. economist at Oxford Economics, said, “I think we’re finally getting some indication that we’re getting relief on the inflation front.”
Moreover, inflation is projected to plummet further in the coming months. According to the central bank’s Survey of Consumer Expectations, participants expect one-year inflation to run at a 5.2% pace, down 0.70 percentage points from the October reading.
Consequently, the federal rate hikes might slow down, which should bode well for the markets. Furthermore, December has mostly been a good month for stocks, and markets could perform well ahead of the Christmas and New Year’s holidays.
Therefore, quality stocks Comcast Corporation (CMCSA) and Albertsons Companies, Inc. (ACI) might be ideal buys this week. These stocks are trading under $40.
Comcast Corporation (CMCSA)
CMCSA operates as a media and technology company worldwide. It operates through Cable Communications, Media, Studios, Theme Parks, and Sky segments.
On December 12, 2022, CMCSA launched the world’s first live, multigigabit symmetrical Internet connection powered by 10G and Full Duplex DOCSIS 4.0. 10G technology. This technology promises to offer customers next-level net speed and performance and is expected to significantly boost CMCSA’s product portfolio.
CMCSA’s revenue came in at $29.85 billion for the third quarter that ended September 30, 2022, down marginally year-over-year. However, its Cable Communications revenue came in at $16.54 billion, up 2.6% year-over-year.
Moreover, its adjusted net income came in at $4.22 billion, up 4.5% year-over-year, while its adjusted EPS came in at $0.96, up 10.3% year-over-year. Also, its adjusted EBITDA came in at $9.48 billion, up 5.9% year-over-year.
CMCSA’s forward EV/EBITDA of 6.79x is 17.8% lower than the industry average of 8.26x. Its forward Price/Cash Flow of 5.79x is 34.9% lower than the industry average of 8.90x.
CMCSA’s revenue is expected to increase 4.2% year-over-year to $121.31 billion in 2022. Its EPS is expected to increase 12.1% year-over-year to $3.62 in 2022. It surpassed EPS estimates in all four trailing quarters. Over the past month, the stock has gained 7.9% to close the last trading session at $36.71.
CMCSA’s POWR Ratings reflect its promising outlook. It has an overall B rating representing a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CMCSA has a B grade for Growth and Quality. It is ranked first among the nine stocks in the Entertainment - TV & Internet Providers industry.
Click here to see the additional POWR Ratings for CMCSA (Value, Momentum, Stability, and Sentiment).
Albertsons Companies, Inc. (ACI)
ACI and its subsidiaries operate food and drug stores in the United States. As of September 10, 2022, ACI operated 2,272 retail food and drug stores with 1,722 pharmacies, 402 associated fuel centers, 22 dedicated distribution centers, and 19 manufacturing facilities.
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 worldwide and aims to leave customers with a lifetime memorable 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/EBITDA of 5.08x is 57.7% lower than the industry average of 12.03x. Its forward Price/Sales of 0.15x is 87.5% lower than the industry average of 1.17x.
ACI’s revenue is estimated to increase 6.7% year-over-year to $76.68 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. Over the past month, the stock has gained 2.6% to close the last trading session at $21.03.
ACI’s POWR Ratings reflect this promising outlook. The stock'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. ACI 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.
CMCSA shares fell $0.61 (-1.66%) in premarket trading Wednesday. Year-to-date, CMCSA has declined -25.13%, versus a -14.39% 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.
2 Stocks You Can Buy This Week for Less Than $40 StockNews.com
