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Today’s episode of Full Court Finance at Zacks explores the recent wave of selling as Wall Street once again reworks its inflation outlook. Despite the somewhat rapid downturn, there are pockets of the market and stocks that look poised to thrive in the near term and for years to come.
Today we dive into United Rentals (URI - Free Report) and The TJX Companies (URI - Free Report) to see why investors might want to buy these stocks as the calendar turns to March amid ongoing market uncertainty.
Bullish investors managed to temporarily stop some of the bleeding on Wednesday and Thursday. But the selling ramped up again on Friday following the release of the Fed’s preferred inflation gauge known as the personal consumption expenditures price index or PCE. The data came in hotter than projected, joining a long list of January economic indicators that proved Jay Powell’s inflation fight is far from over.
Wall Street has been forced once again to recalibrate its outlook for interest rates. Wall Street pushed the 2-year U.S. Treasury yield to fresh highs of 4.81% on Friday. This marks a sharp climb from 4.1% on February 1 and tops its November peaks. The short-term yield is now floating around levels it last hit in early 2007 and late 2006.
The bulls are now desperately attempting to prevent the Nasdaq from falling back under its 200-day moving average. The tech-heavy index floated right around the key technical level at the end of Friday trading after it dropped 1.7%. The hope now might be that the market chops around over the coming weeks until February’s CPI release on March 14 and the Fed’s March FOMC meeting on March 21-22.
Despite all of the worries about the growth trade quickly unraveling again, there are plenty of great stocks for investors to buy heading into March and beyond. It is also always worth remembering that the market-timing game is extremely difficult. Given this backdrop, we dive into two stocks that sit at attractive valuation levels that have also outpaced the market over the past year and look poised to continue doing so.
United Rentals ((URI - Free Report) ) is one of the world’s largest equipment rental firms. URI’s sales quickly bounced back after a pandemic dip and it posted strong 2022 results in late January. The company is able to easily raise its prices along with inflation and United Rentals completed its acquisition of Ahern Rentals in early December.
Image Source: Zacks Investment Research
URI’s upward earnings revisions help it land a Zacks Rank #2 (Buy) right now. Plus, United Rentals said last month that it plans to restart its share repurchase program and introduce a dividend. These moves highlight URI’s stability and financial firepower amid a period of wider economic uncertainty.
URI shares have soared 750% in the last 10 years and 25% so far in 2023 to hit fresh records recently. Yet the stock is far from overheated and trades at a 40% discount to its own decade-long highs at 10.5X forward 12-month earnings.
The TJX Companies, Inc. ((TJX - Free Report) ) is an off-price apparel and home décor retailer that operates roughly 4,800 stores in nine countries, including the U.S., Canada, the UK, and Germany. The company’s brands include T.J. Maxx, Marshalls, HomeGoods, and others. TJX has carved out a nice niche within a rapidly evolving retail landscape that has it thriving alongside giants such as Target ((TGT - Free Report) ).
Image Source: Zacks Investment Research
TJX’s sales skyrocketed in its FY22 (2021) to blow away its pre-covid total. It then popped 3% in its recently reported FY23. TJX’s year was highlighted by a strong fourth quarter as more consumers looked to save. TJX, which lands a Zacks Rank #3 (Hold) at the moment, plans to boost its dividend by 13% and to buy back between $2 billion to $2.5 Billion of stock in FY24. On top of that, 12 of the 15 brokerage recommendations Zacks has are “Strong Buys” and its outlook remains strong.
TJX shares have popped 20% in the last six months and 95% in the past five years to blow away the S&P 500’s 45%. A slide from its January peaks has it near oversold RSI levels. In terms of valuation, TJX is trading at a 50% discount to its own 10-year highs at 21.8X forward 12-month earnings to match the Zacks Retail Sector.
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Market-Beating Stocks to Buy for March and Hold
Today’s episode of Full Court Finance at Zacks explores the recent wave of selling as Wall Street once again reworks its inflation outlook. Despite the somewhat rapid downturn, there are pockets of the market and stocks that look poised to thrive in the near term and for years to come.
Today we dive into United Rentals (URI - Free Report) and The TJX Companies (URI - Free Report) to see why investors might want to buy these stocks as the calendar turns to March amid ongoing market uncertainty.
Bullish investors managed to temporarily stop some of the bleeding on Wednesday and Thursday. But the selling ramped up again on Friday following the release of the Fed’s preferred inflation gauge known as the personal consumption expenditures price index or PCE. The data came in hotter than projected, joining a long list of January economic indicators that proved Jay Powell’s inflation fight is far from over.
Wall Street has been forced once again to recalibrate its outlook for interest rates. Wall Street pushed the 2-year U.S. Treasury yield to fresh highs of 4.81% on Friday. This marks a sharp climb from 4.1% on February 1 and tops its November peaks. The short-term yield is now floating around levels it last hit in early 2007 and late 2006.
The bulls are now desperately attempting to prevent the Nasdaq from falling back under its 200-day moving average. The tech-heavy index floated right around the key technical level at the end of Friday trading after it dropped 1.7%. The hope now might be that the market chops around over the coming weeks until February’s CPI release on March 14 and the Fed’s March FOMC meeting on March 21-22.
Despite all of the worries about the growth trade quickly unraveling again, there are plenty of great stocks for investors to buy heading into March and beyond. It is also always worth remembering that the market-timing game is extremely difficult. Given this backdrop, we dive into two stocks that sit at attractive valuation levels that have also outpaced the market over the past year and look poised to continue doing so.
United Rentals ((URI - Free Report) ) is one of the world’s largest equipment rental firms. URI’s sales quickly bounced back after a pandemic dip and it posted strong 2022 results in late January. The company is able to easily raise its prices along with inflation and United Rentals completed its acquisition of Ahern Rentals in early December.
Image Source: Zacks Investment Research
URI’s upward earnings revisions help it land a Zacks Rank #2 (Buy) right now. Plus, United Rentals said last month that it plans to restart its share repurchase program and introduce a dividend. These moves highlight URI’s stability and financial firepower amid a period of wider economic uncertainty.
URI shares have soared 750% in the last 10 years and 25% so far in 2023 to hit fresh records recently. Yet the stock is far from overheated and trades at a 40% discount to its own decade-long highs at 10.5X forward 12-month earnings.
The TJX Companies, Inc. ((TJX - Free Report) ) is an off-price apparel and home décor retailer that operates roughly 4,800 stores in nine countries, including the U.S., Canada, the UK, and Germany. The company’s brands include T.J. Maxx, Marshalls, HomeGoods, and others. TJX has carved out a nice niche within a rapidly evolving retail landscape that has it thriving alongside giants such as Target ((TGT - Free Report) ).
Image Source: Zacks Investment Research
TJX’s sales skyrocketed in its FY22 (2021) to blow away its pre-covid total. It then popped 3% in its recently reported FY23. TJX’s year was highlighted by a strong fourth quarter as more consumers looked to save. TJX, which lands a Zacks Rank #3 (Hold) at the moment, plans to boost its dividend by 13% and to buy back between $2 billion to $2.5 Billion of stock in FY24. On top of that, 12 of the 15 brokerage recommendations Zacks has are “Strong Buys” and its outlook remains strong.
TJX shares have popped 20% in the last six months and 95% in the past five years to blow away the S&P 500’s 45%. A slide from its January peaks has it near oversold RSI levels. In terms of valuation, TJX is trading at a 50% discount to its own 10-year highs at 21.8X forward 12-month earnings to match the Zacks Retail Sector.