The JOLTS report is out and we now know that the number of job vacancies fell by around half a million to 11.4 million in the month of April. But it was still well above the 5.94 million people looking for work. Wage growth over the 12 months to April remains within the +11% range. It is therefore reasonable to assume that labor market tensions continued in the second quarter of the year.
The ISM manufacturing report for May shows a contraction in the employment index, which would indicate less hiring. But the report states that “despite the contraction in the employment index in May, companies have improved their progress in tackling medium-term labor shortages at all levels of the supply chain. supply”.
He added that “panelists indicated an improvement in hiring capacity in May compared to April. Turnover (resignations and retirements) and resulting replacement challenges continue to hamper efforts to adequately staff organizations, but to a slightly lesser extent than April.
The bottom line on the employment front seems to be that the market is still quite tight although it is improving.
So far, demand continues to rise, according to the ISM report, despite the effects of rate hikes, which typically take about a year to kick in. Sentiment was described as “strongly bullish on demand, with five positive growth comments for every cautious comment. Panelists continue to rate supply chain and pricing issues as their top concerns.
In this environment, there should be no shortage of stocks to choose from. But if you’d rather be cautious given impending weak rate hikes weighing on demand, you’d do well to follow what the experts are saying.
And to that end, I’ve selected a few stocks that all analysts covering have a strong buy, or at least a buy recommendation. And Zacks methodology also supports their selection as detailed below-
Valero Energy VLO
A member of the Oil & Gas Industry – Refining & Marketing (8% of industries ranked by Zacks), Valero has an impressive track record of exceeding analysts’ expectations in each of the past four quarters at an average rate of 84, 3%. Analysts enthusiastically raised their estimates: from $7.33 90 days ago to $8.69 a month later, to $12.75 thereafter, then to the current level of $14.30. This equates to a 12.2% increase for the 2022 estimate in the past 30 days alone.
Estimates for the following year have also increased and have increased by 16.9% in the last 30 days. Zacks Rank #2 (Buy) stock with Value, Growth and Momentum scores of B, A and A, respectively, is expected to increase revenue and earnings by 33.0% and 408.9% respectively.
Univar Solutions UNVR
Univar has a No. 2 Zacks Rank and Value, Growth, and Momentum scores of A, D, and B, respectively. It belongs to the Chemicals – Diversified (top 28%) industry. Univar’s surprise story is also good at 28.5% and analysts continue to raise its estimates.
The past 30 days have seen the Zacks consensus estimate for the stock jump 63 cents, or 24.0%. The 2023 estimate is also up 28 cents (10.1%) over the same period. Univar’s revenue and profit are expected to grow 16.7% and 46.9% this year.
Cumulus Media CMLS
Ranked #1 (Strong Buy) Cumulus Media belongs to the Broadcasting & Television industry (top 40%) and Zacks gave it Value, Growth and Dynamism scores of A, A and D. So the company missed estimates in any of the previous four quarters, the average positive surprise was still 108.1%.
Over the past 30 days, the Zacks consensus estimate for 2022 has risen 18 cents, or 9.6%. The 2023 estimate fell 21 cents (7.4%). But analysts continue to expect the company to increase revenue and earnings over the two years. In 2022, growth should be 9.1% and 441.7% respectively. Next year increases are expected to be 2.8% and 28.1% respectively.
GTN Gray Television
Gray Television, ranked number 1, belongs to the same industry. It has Value, Growth, and Momentum scores of A, C, and A, respectively. The company started to surprise positively a few quarters ago and its four-quarter average positive surprise is 37.5%.
Analysts turned bullish on the company’s outlook 30 days ago. Since then, its 2022 estimate has climbed $1.12 (27.0) while its 2023 estimate has jumped $1.17 (50.9%). However, current estimates still represent a drop in revenue and profit in 2023 after solid growth of 55.7% in revenue and 1,217.5% in profit this year.
One month price performance
Image source: Zacks Investment Research
Zacks names ‘only one best choice for doubling up’
From thousands of stocks, 5 Zacks experts have each picked their favorite to skyrocket by +100% or more in the coming months. Of these 5, Research Director Sheraz Mian selects one to have the most explosive advantage of all.
It’s a little-known chemical company that’s up 65% year-on-year, but still very cheap. With relentless demand, rising earnings estimates for 2022 and $1.5 billion for stock buybacks, retail investors could jump in at any moment.
This company could rival or surpass other recent Zacks stocks which are expected to double, such as Boston Beer Company which jumped +143.0% in just over 9 months and NVIDIA which jumped +175.9% in one. year.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.