The U.S. economy remains riddled with high prices, aggressive federal rate hikes, and rising recession fears. However, Goldman Sachs expects inflation to drop substantially in the long term. The bank expects core personal consumption expenditure to fall to 2.9% by December 2023 from the current 5.1%.
Moreover, Wharton professor Jeremy Siegel expects 2023 to be a strong year for equities. According to him, 90% of the inflation has ended. He said, "It's taken way too long for the Fed to get it, and they haven't gotten it yet that inflation is basically over, but they will, and I think they're going to get it maybe very late this year or early next year."
Given the market’s favorable long-term outlook, investors could buy quality stocks Microsoft Corporation (MSFT), Vertex Pharmaceuticals Incorporated (VRTX), Centene Corporation (CNC), Agilent Technologies, Inc. (A), and Myers Industries, Inc. (MYE), which have gained significantly over the past decade and seem poised to deliver stable returns in the future.
Microsoft Corporation (MSFT)
MSFT develops, licenses, and supports software, services, devices, and solutions worldwide. The company operates in three segments: Productivity and Business Processes; Intelligent Cloud; and More Personal Computing.
On November 16, 2022, MSFT and Lockheed Martin Corporation (LMT) announced a historic expansion of their strategic partnership to help power the Department of Defense's next generation of technology (DOD). This one-of-a-kind collaboration will bring classified cloud technologies, AI, and DOD digital transformation.
On November 14, 2022, MSFT announced the MSFT Supply Chain Platform launch and the Microsoft Supply Chain Center preview. The platform aims to help organizations minimize the carbon impact on supply chains, and amid the growing decarbonization initiatives, this should gain popularity.
MSFT's total revenues came in at $50.12 billion for the first quarter that ended September 30, 2022, up 10.6% year-over-year. Moreover, its gross margin came in at $34.67 billion, up 9.5% year-over-year. Also, its operating income came in at $21.52 billion, up 6.3% year-over-year.
Analysts expect MSFT's revenue to increase 7.2% year-over-year to $212.46 billion in 2023. Its EPS is expected to increase 3.7% year-over-year to $9.55 in 2023. It surpassed EPS estimates in three of four trailing quarters.
MSFT's shares have gained marginally intraday to close the last trading session at $242.05. Over the past ten years, the stock has gained 798.1%.
MSFT's strong fundamentals are reflected in its POWR Ratings. The stock's overall B rating indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
MSFT has a B grade for Stability and Quality. In the Software – Business industry, it is ranked #9 of 53 stocks. Click here for the additional POWR Ratings for Value, Growth, Momentum, and Sentiment for MSFT.
Vertex Pharmaceuticals Incorporated (VRTX)
Biotechnology company VRTX develops and commercializes therapies for treating cystic fibrosis. It also works with investigational small molecules, cell, and genetic therapies, for other severe diseases like sickle cell disease, beta-thalassemia, type 1 diabetes, and others.
On October 27, 2022, Reshma Kewalramani, VRTX's M.D., CEO, and President, said, "We are executing on our goal of serial innovation for patients, which will drive significant growth for the company for years to come."
VRTX's total revenues came in at $2.33 billion for the third quarter that ended September 30, 2022, up 17.7% year-over-year. Its net income came in at $930.5 million, up 9.2% year-over-year. Moreover, its EPS came in at $3.59, up 9.5% year-over-year.
VRTX's revenue is expected to increase 17.8% year-over-year to $8.93 billion in 2022. Its EPS is expected to increase 12.5% year-over-year to $14.65 in 2022. It surpassed EPS estimates in three of four trailing quarters. Over the past year, the stock has gained 72.9% to close the last trading session at $316.20. Also, it has gained 669.2% over the past ten years.
VRTX's POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our rating system. It has an A grade for Quality and Sentiment and a B for Value. The stock is ranked first among 380 stocks in the Biotech industry.
We've also rated VRTX for Stability, Momentum, and Growth. Get all VRTX ratings here.
Centene Corporation (CNC)
CNC provides government-sponsored and commercial healthcare programs focusing on underinsured and uninsured individuals. It also provides education and outreach programs to inform and assist members in accessing appropriate healthcare services. Its segments are Managed Care and Specialty Services.
On October 25, 2022, CNC and Express Scripts, Cigna Corporation's (CI) Evernorth's pharmaceutical benefits management business, announced a new strategic relationship to make prescription medications more accessible and inexpensive for clients. This collaboration might increase the consumer count for both companies.
CNC's total revenue came in at $35.87 billion for the third quarter that ended September 30, 2022, up 10.7% year-over-year. Moreover, its net income came in at $738 million, up 26.4% year-over-year, while its EPS came in at $1.27, up 28.3% year-over-year.
Street expects CNC's revenue to increase 14.8% year-over-year to $144.57 billion in 2022. Its EPS is expected to grow 11.5% year-over-year to $5.74 in 2022. It surpassed EPS estimates in all four trailing quarters. The stock has gained 12.5% over the past year and 662.1% over the past ten years to close the last trading session at $82.12.
CNC's overall A rating equates to a Strong Buy in our POWR Ratings system. It has a B grade for Value and Quality. CNC is ranked #6 out of 11 stocks in the A-rated Medical - Health Insurance industry.
Beyond what is stated above, we've also rated CNC for Growth, Sentiment, Stability, and Momentum. Get all CNC ratings here.
Agilent Technologies, Inc. (A)
A provides application-focused solutions to the life sciences, diagnostics, and applied chemical markets worldwide. Its segments are Life Sciences and Applied Markets; Diagnostics and Genomics; and Agilent CrossLab.
On November 14, 2022, A released the AssayMAP Bravo Protein Sample Prep Workbench 4.0 software, which includes 21 CFR Part 11 compliance capabilities that enable AssayMAP Bravo-based automated sample preparation in biopharma drug development processes.
Lars Kristiansen, general manager of A's Automation Solutions business, said, "These enhancements align with our focus to provide new solutions to our biopharma partners that enable them to bring biotherapeutics to market faster and more cost-effectively."
A's net revenue came in at $1.85 billion for the fourth quarter that ended October 31, 2022, up 11.4% year-over-year. Its income from operations came in at $471 million, up 19.2% year-over-year.
A's revenue is expected to increase by 7% year-over-year to $6.76 billion in 2022. Its EPS is expected to grow 15.4% year-over-year to $5.01 in 2022. It surpassed EPS estimates in all four trailing quarters. Over the past six months, the stock has gained 16% to close the last trading session at $145.14. Moreover, it has gained 466.3% over the past ten years.
It’s no surprise that A is rated Strong Buy in our POWR Ratings system. It has a B grade for Stability, Sentiment, and Quality. A is ranked #2 of 52 stocks in the Medical - Diagnostics/Research industry.
Beyond what is stated above, we've also rated A for Value, Growth, and Momentum. Get all A's ratings here.
Myers Industries, Inc. (MYE)
MYE is involved in manufacturing and distribution internationally. The company operates through two segments: Material Handling and Distribution.
On October 27, Mike McGaugh, MYE's President and CEO, said, "Our sustained performance over several quarters, and across a variety of economic conditions, supports our confidence that we can continue to successfully execute on our transformation across future market and economic cycles."
MYE's net sales came in at $2.28 billion for the third quarter that ended September 30, 2022, up 14% year-over-year. Its net income increased 73% year-over-year to $13.67 million. In addition, its EPS increased 68.2% year-over-year to $0.37.
MYE's revenue is expected to increase 19.2% year-over-year to $907.33 million in 2022. Its EPS is estimated to increase 70.1% year-over-year to $1.65 in 2022. It has surpassed EPS estimates in three of four trailing quarters.
Over the past nine months, the stock has gained 29.7% to close the last trading session at $22.43, while the stock has gained 54.9% over the past ten years.
MYE's overall A rating equates to a Strong Buy in our POWR Ratings system. It has a B grade for Growth, Stability, and Quality. It is ranked #4 out of 36 stocks in the A-rated Industrial - Manufacturing industry.
We've also rated MYE for Value, Momentum, and Sentiment. Get all MYE ratings here.
MSFT shares were trading at $243.91 per share on Tuesday afternoon, up $1.86 (+0.77%). Year-to-date, MSFT has declined -26.80%, versus a -15.14% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
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