The stocks dropped in the last trading session, reversing the last week’s gains. The Dow Jones Industrial Average declined 1.6%, while the S&P 500 and the Nasdaq Composite plunged 2% and 3%, respectively. Also, the stock market seems on track to mark its worst first half in decades.
The major market indices have been under pressure since the beginning of this year due to concerns over the persistently high inflation, the Federal Reserve’s brutal interest rate hikes to tame it, geopolitical instability, and the recession fears.
Despite the risk-off environment, some stocks managed to gain strong momentum owing to their solid fundamentals and bright growth prospects. These stocks have shown significant resilience against recent market fluctuations and are expected to maintain an upward trend.
We think investing in fundamentally sound stocks Amalgamated Financial Corp. (AMAL), Consolidated Water Co. Ltd. (CWCO), and VAALCO Energy, Inc. (EGY), which gained solid momentum despite the market volatility, could be wise now. These stocks are trading close to their 52-week highs and possess impressive momentum attributes.
Amalgamated Financial Corp. (AMAL)
AMAL operates as a bank holding company for Amalgamated Bank. The company provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. It operates through its five branches across New York City, Washington, D.C., and San Francisco, one commercial office in Boston, and a digital banking platform.
On February 25, AMAL’s Board of Directors approved an increase in the Bank’s common stock share repurchase authorization to an aggregate amount of up to $40 million. The share repurchases are expected to boost the company’s shareholder returns.
In the same month, AMAL and Almika Renewable Finance, a leading renewable energy platform, announced the launch of a new suite of financial services focusing on the residential solar and energy storage market. This partnership might strengthen the bank’s platform offering in the energy market while helping it achieve new zero targets by 2045.
“Almika and Amalgamated share the same goal of reducing greenhouse gas emissions. By making a strategic investment in clean solar energy, Amalgamated will tap into a growing market and accelerate our efforts to mitigate climate change,” said Priscilla Sims Brown, AMAL’s President, and CEO.
In the fiscal 2022 first quarter ended March 31, 2022, AMAL's interest and dividend income increased 16.2% year-over-year to $50.46 million. Its net interest income grew 15.6% from the year-ago value to $48.37 million. The company's net income and earnings per common share came in at $14.17 million and $0.45, registering increases of 16.2% and 15.4%, respectively, from the prior-year period.
The consensus revenue estimate of $59.75 million for the fiscal 2022 second quarter, ending June 2022, represents an increase of 27.1% from the same period in 2021. The $0.55 consensus EPS estimate for the current quarter indicates a 71.6% year-over-year rise. Furthermore, it has surpassed the consensus revenue and EPS estimates in three of the trailing four quarters, which is impressive.
The stock has gained 18.6% year-to-date and 31.4% over the past year to close the last trading session at $19.88. It is currently trading above its 50-day and 200-day moving averages of $19.60 and $17.68, respectively, indicating an uptrend. Moreover, AMAL is currently trading 9.4% below its 52-week high of $21.94, which it hit on May 31, 2022.
AMAL's POWR Ratings reflect this promising outlook. The stock has an overall grade of B, equating to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
AMAL has a B grade for Momentum, Growth, Value, Stability, and Sentiment. Within the Northeast Regional Banks industry, it is ranked #2 of 63 stocks. To see additional POWR Ratings (Quality) for AMAL, click here.
Consolidated Water Co. Ltd. (CWCO)
Headquartered in Grand Cayman, the Cayman Islands, CWCO designs, manages, and operates water production and water treatment plants primarily in the Cayman Islands, the Bahamas, and the United States. The company operates through four segments: Retail; Bulk; Services; and Manufacturing.
In February, CWCO was awarded two major contracts for water treatment facilities in Arizona and Florida. The Arizona contract was given to the company’s subsidiary, PERC Water Corporation, which currently operates two advanced reclamation facilities (WRF) in Southern California.
In addition, CWCO’s specialty manufacturing subsidiary was awarded a contract by the City of Port St. Lucie, Florida, to replace membrane elements and upgrade equipment at the city’s 20 million gallons-per-day J.E. Anderson Reverse Osmosis Water Treatment Plant. These contracts should add to the company’s revenue stream.
CWCO's revenue increased 14.4% year-over-year to $19.56 million, and its gross profit grew 16.6% year-over-year to $7.15 million in the fiscal 2022 first quarter, ended March 31, 2022. The company’s income from operations rose 105.9% from the prior-year period to $2.29 million. Also, net income attributable to CWCO stockholders stood at $1.72 million, up 73.6% year-over-year.
Analysts expect CWCO’s EPS to grow 700% year-over-year to $0.16 for its fiscal 2022 third quarter, ending September 2022. The $20.60 million consensus revenue estimate for the next quarter represents a 25.5% rise from the prior-year period. The company has topped the consensus revenue estimates in three of the trailing four quarters.
CWCO has gained 28.4% over the past six months and 32.7% year-to-date to close the last trading session at $14.12. The stock is currently trading above its 50-day and 200-day moving averages of $12.52 and $11.23, respectively, indicating an uptrend. Also, it is trading 4.4% below its 52-week high of $14.77, which it hit on June 8, 2022.
CWCO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall grade of A, equating to a Strong Buy in our proprietary rating system.
CWCO has a grade of A for Sentiment and B for Momentum and Growth. Within the Water industry, it is ranked #1 of 13 stocks. To see additional POWR Ratings (Stability, Value, and Quality) for CWCO, click here.
VAALCO Energy, Inc. (EGY)
EGY is an independent energy company. It acquires, explores, develops, and produces crude oil and natural gas. The company holds an Etame production sharing contract related to the Etame Marin block located offshore in the Republic of Gabon, West Africa. Also, it owns interests in an undeveloped block offshore Equatorial Guinea, West Africa.
On June 2, EGY announced the successful drilling of the South Tchibala 1HB-ST well and the addition of new reserves to EGY’s 1P reserves. The continued success of the company’s drilling campaign demonstrates the quality of its premier Etame asset. This newly drilled well is expected to be online this month, further boosting EGY’s production and revenues.
On May 16, EGY entered a new credit agreement for a new five-year, $50 million Reserve Based Lending facility with Glencore Energy UK Ltd. The new low-cost lending facility is expected to strengthen the company’s financial position, bolster its robust and debt-free balance sheet, and growing cash position.
In the fiscal 2022 second quarter ended February 28, 2022, EGY's crude oil and natural gas sales grew 72.6% year-over-year to $68.66 million. Its operating income improved 178.9% from the year-ago value to $40.01 million. The company's adjusted EBITDAX rose 85.9% year-over-year to $33.53 million.
In addition, its adjusted net income and adjusted net income per share came in at $21.12 million and $0.36, up 144.1% and 140%, respectively, year-over-year.
The $97.64 million consensus revenue estimate for the fiscal 2022 second quarter, ending June 2022, represents a 107.6% improvement from the same period last year. Analysts expect EGY’s EPS for the current quarter to increase 700% year-over-year to $0.80. The company has topped the consensus revenue in each of the trailing four quarters.
The stock has gained 151.7% year-to-date and 144.9% over the past year to close the last trading session at $8.08. It is currently trading above its 50-day and 200-day moving averages of $7.16 and $5.01, respectively, indicating an uptrend. Moreover, it is trading 7.9% below its 52-week high of $8.77, which it hit on June 3, 2022.
EGY's POWR Ratings reflect a strong outlook. The stock has an overall grade of B, which translates to a Buy in our proprietary rating system.
EGY has a grade of A for Momentum and Sentiment. It has a B grade for Quality and Growth. Within the B-rated Energy - Oil & Gas industry, it is ranked #19 of 99 stocks. To see additional POWR Ratings (Stability and Value) for EGY, click here.
AMAL shares were trading at $19.92 per share on Wednesday morning, up $0.04 (+0.20%). Year-to-date, AMAL has gained 19.84%, versus a -18.98% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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