The stock market faced a challenging 2022 filled with macroeconomic and geopolitical issues. Inflation touched a 40-year high, and the Fed raised the benchmark interest rate seven times to combat it.
Minutes from the Fed’s December policy meeting indicate that interest rate hikes will continue until more progress is made on bringing inflation down. Analysts, CEOs of companies, and consumers are worried about a recession this year. However, Moody’s Analytics expects a ‘slowcession’ to play out this year and the economy to narrowly avoid a recession.
In addition, Goldman Sachs believes that the economy will avoid a recession and make a “soft landing” where inflation moderates and growth continues.
Amid this backdrop, it could be wise to buy trending stocks Salesforce, Inc. (CRM), Altria Group, Inc. (MO), and General Motors Company (GM) because of their fundamental strength.
Salesforce, Inc. (CRM)
CRM is a customer relationship management technology provider. The company’s Customer 360 platform enables its customers to work together to deliver connected experiences. The stock trades at an average volume of 8.90 million.
CRM’s total revenues increased 14.2% year-over-year to $7.84 billion for the third quarter ended October 31, 2022. Its gross profit increased 14.5% year-over-year to $5.75 billion. In addition, its cash and cash equivalents, end of the period, increased 27.8% year-over-year to $6.08 billion.
The company’s non-GAAP net income increased 9.8% year-over-year to $1.40 billion. Its non-GAAP EPS came in at $1.40, representing an increase of 10.2% year-over-year.
Analysts expect CRM’s EPS and revenue to increase 61.8% and 9.2% year-over-year to $1.36 and $8 billion, respectively. It has surpassed the Street EPS estimates in each of the trailing four quarters. Over the past month, CRM has declined 3.4% to close the last trading session at $139.59.
CRM’s POWR Ratings reflect solid prospects. 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.
It is ranked #17 out of 137 stocks in the Software – Application industry. It has an A grade for Growth and a B for Sentiment. Click here to see the other ratings of CRM for Value, Momentum, Stability, and Quality.
Altria Group, Inc. (MO)
MO manufactures and sells smokable and oral tobacco products in the United States. It sells cigars, pipe tobacco, and moist smokeless tobacco under various brand names. The stock trades at an average volume of 8.26 million.
For the fiscal third quarter ended September 30, 2022, MO’s operating income increased 5.5% year-over-year to $3.11 billion. Its adjusted net earnings rose 1.9% year-over-year to $2.30 billion. In addition, its adjusted EPS came in at $1.28, representing an increase of 4.9% year-over-year.
For the quarter ended December 31, 2022, MO’s EPS and revenue are expected to increase 6% and 1.1% year-over-year to $1.16 and $5.14 billion, respectively. It surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past six months, the stock has gained 7.5% to close the last trading session at $45.41.
MO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It has an A grade for Quality. Within the A-rated Tobacco industry, it is ranked #4 out of nine stocks. To see the other ratings of MO for Growth, Value, Momentum, Stability, and Sentiment, click here.
General Motors Company (GM)
GM manufactures and distributes cars, trucks, crossovers, and auto parts and accessories worldwide. The business operates through four segments, GM North America; GM International; Cruise; and GM Financial. It primarily sells cars under Buick, Cadillac, Chevrolet, GMC, Holden, Baojun, and Wuling names. The stock trades at an average volume of 13.37 million.
On November 17, 2022, GM and Vale Canada Limited, a subsidiary of Vale S.A. (VALE), signed an agreement for the long-term supply of battery-grade nickel sulfate to enhance North American EV supply chains. This deal is expected to help GM reach its target of building 1 million EVs annually in North America in 2025.
GM’s total net sales and revenue increased 56.4% year-over-year to $41.89 billion for the third quarter ended September 30, 2022. Its adjusted net earnings increased 47.5% year-over-year to $3.28 billion. In addition, its adjusted EPS came in at $2.25, representing an increase of 48% year-over-year.
Analysts expect GM’s EPS and revenue for the quarter ended December 31, 2022, to increase 23.9% and 21.2% year-over-year to $1.67 and $40.71 billion, respectively. It surpassed Street EPS estimates in three of the trailing four quarters. Over the past six months, the stock has gained 7.8% to close the last trading session at $34.69.
It’s no surprise that GM has an overall rating of B, which equates to a Buy in our POWR Ratings system.
It is ranked #18 out of 61 stocks in the Auto & Vehicle Manufacturers industry. It has an A grade for Growth and a B for Value and Sentiment. To see the additional ratings of GM for Momentum, Stability, and Quality, click here.
CRM shares rose $0.38 (+0.27%) in premarket trading Thursday. Year-to-date, CRM has gained 5.28%, versus a 0.35% 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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