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Today’s episode of Full Court Finance at Zacks dives into where the stock market stands as we kick off the busy stretch of first quarter earnings season. The episode then explores two giants of key industries—Taiwan Semiconductor (TSM - Free Report) and Union Pacific (UNP - Free Report) —that are sitting at beaten-down levels heading into earnings that might make them attractive to long-term investors.
The next several weeks are likely to prove pivotal for the stock market since a lot is riding on corporate earnings outlooks holding steady.
Outside of earnings, Wall Street appears to like what it saw from the March CPI and PPI data. Inflation is clearly cooling from its summer peaks. Investors are pricing in that the Fed is nearly done with rate hikes and will start pivoting to a more dovish tone by the end of 2023.
Stocks were down through late-afternoon trading on Friday after the market surged higher on Thursday. The S&P 500 and the Nasdaq remain well above their 50-day moving averages as JPMorgan, Citi, and others unofficially kicked off second quarter earnings season.
Image Source: Zacks Investment Research
Despite the resurgence, the S&P 500 still trades 15% below its highs and not too far above its 10-year median in terms of forward earnings. The market is, however, looking a little overheated, especially in certain pockets and specific stocks.
Investors might instead want to search for long-term value via great, proven companies trading at very attractive levels in terms of price and value.
It is always worth remembering that some of the best times to buy great stocks is when other people seemingly don’t want them for various short-term reasons, and then sell some when everyone craves them again.
Taiwan Semiconductor Manufacturing Company ((TSM - Free Report) ) is set to report its first quarter 2023 earnings on Thursday, April 20. TSM is the world’s largest chip manufacturer and it is expanding its footprint outside of Taiwan in the U.S. Taiwan Semi is working on rolling out next-gen, 3-nanometer transistors as chip firms race to improve speeds
Taiwan Semi stands to benefit for decades to come from the never-ending tech revolution that’s fueled by chips. TSM, which grabs a Zacks Rank #3 (Hold) right now, is trading around 40% from its highs as Wall Street worries about tensions between the U.S. and China. In the long-term, TSM will likely prove too valuable to both economic giants for either to negatively impact TSM's crucial chip production.
Image Source: Zacks Investment Research
TSM’s valuation is fantastic, with it trading at a 55% discount to own highs at 14.9X forward 12-month earnings. Alongside its valuation and upside, TSM’s dividend yields around 1.6% at the moment and it boasts a strong balance sheet.
Union Pacific Corporation ((UNP - Free Report) ) is also set to report first quarter 2023 financial results on April 20. Union Pacific is a rail freight titan that’s a rather straightforward long-term play into the wider world of transportation and shipping. And it seems highly unlikely that railroad shipping goes out of style no matter what the economy or energy infrastructure looks like 50 or even 100 years from now.
UNP and the wider group ofrailroad operators have subdued outlooks for 2023 as they brace for a slowdown in demand. Union Pacific also announced in late February that its CEO would be stepping down amid a push to shake things up and encourage UNP to boost its operations and profits.
Image Source: Zacks Investment Research
Union Pacific has paid a dividend for 124 years in a row and it has raised its payout by 12% annualized over the past five years. UNP has crushed the S&P 500 over the last 25 years, up 1,300% vs. 350%. UNP has climbed 45% in the past five years and currently trades roughly 30% below its all-time highs, and its valuation is looking solid. And its mixed earnings revisions activity helps UNP land a Zacks Rank #3 (Hold) right now.
Disclosure: Ben Rains own TSM shares in his personal portfolio.
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2 Beaten-Down Stocks to Buy and Hold for Years
Today’s episode of Full Court Finance at Zacks dives into where the stock market stands as we kick off the busy stretch of first quarter earnings season. The episode then explores two giants of key industries—Taiwan Semiconductor (TSM - Free Report) and Union Pacific (UNP - Free Report) —that are sitting at beaten-down levels heading into earnings that might make them attractive to long-term investors.
The next several weeks are likely to prove pivotal for the stock market since a lot is riding on corporate earnings outlooks holding steady.
Outside of earnings, Wall Street appears to like what it saw from the March CPI and PPI data. Inflation is clearly cooling from its summer peaks. Investors are pricing in that the Fed is nearly done with rate hikes and will start pivoting to a more dovish tone by the end of 2023.
Stocks were down through late-afternoon trading on Friday after the market surged higher on Thursday. The S&P 500 and the Nasdaq remain well above their 50-day moving averages as JPMorgan, Citi, and others unofficially kicked off second quarter earnings season.
Image Source: Zacks Investment Research
Despite the resurgence, the S&P 500 still trades 15% below its highs and not too far above its 10-year median in terms of forward earnings. The market is, however, looking a little overheated, especially in certain pockets and specific stocks.
Investors might instead want to search for long-term value via great, proven companies trading at very attractive levels in terms of price and value.
It is always worth remembering that some of the best times to buy great stocks is when other people seemingly don’t want them for various short-term reasons, and then sell some when everyone craves them again.
Taiwan Semiconductor Manufacturing Company ((TSM - Free Report) ) is set to report its first quarter 2023 earnings on Thursday, April 20. TSM is the world’s largest chip manufacturer and it is expanding its footprint outside of Taiwan in the U.S. Taiwan Semi is working on rolling out next-gen, 3-nanometer transistors as chip firms race to improve speeds
Taiwan Semi stands to benefit for decades to come from the never-ending tech revolution that’s fueled by chips. TSM, which grabs a Zacks Rank #3 (Hold) right now, is trading around 40% from its highs as Wall Street worries about tensions between the U.S. and China. In the long-term, TSM will likely prove too valuable to both economic giants for either to negatively impact TSM's crucial chip production.
Image Source: Zacks Investment Research
TSM’s valuation is fantastic, with it trading at a 55% discount to own highs at 14.9X forward 12-month earnings. Alongside its valuation and upside, TSM’s dividend yields around 1.6% at the moment and it boasts a strong balance sheet.
Union Pacific Corporation ((UNP - Free Report) ) is also set to report first quarter 2023 financial results on April 20. Union Pacific is a rail freight titan that’s a rather straightforward long-term play into the wider world of transportation and shipping. And it seems highly unlikely that railroad shipping goes out of style no matter what the economy or energy infrastructure looks like 50 or even 100 years from now.
UNP and the wider group ofrailroad operators have subdued outlooks for 2023 as they brace for a slowdown in demand. Union Pacific also announced in late February that its CEO would be stepping down amid a push to shake things up and encourage UNP to boost its operations and profits.
Image Source: Zacks Investment Research
Union Pacific has paid a dividend for 124 years in a row and it has raised its payout by 12% annualized over the past five years. UNP has crushed the S&P 500 over the last 25 years, up 1,300% vs. 350%. UNP has climbed 45% in the past five years and currently trades roughly 30% below its all-time highs, and its valuation is looking solid. And its mixed earnings revisions activity helps UNP land a Zacks Rank #3 (Hold) right now.
Disclosure: Ben Rains own TSM shares in his personal portfolio.