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Add Diversity to Your Portfolio with These 3 Stocks
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With the second-quarter earnings season set to hit its peak in a couple of weeks, investors will be looking for management commentary on the outlook for the rest of the year. The atmosphere of caution that the Fed has injected into the markets is hard to shake off and both market watchers and stock analysts are sounding incrementally pessimistic.
And you can hardly blame them. It really is difficult to predict this market. Not only have interest rates been ratcheted up at record speed, but inflation, the thing that this action was supposed to attack, remains well above targeted levels. The Fed is watching the numbers to decide its next course of action.
Jobs data is a big part of the numbers they’re watching and the JOLTS report indicates that things are headed in the right direction. May job openings dropped across most sectors with education, transportation, real estate/rental leasing, information and construction in that order, seeing some increases. The ADP jobs data for June, however, shows an increase in private payrolls of 497,000, roughly double expectations and the biggest jump since last July. The Fed is not going to like this. We should expect a 25bp hike at the July meeting.
So where should investors keep their money? Cash is really not a bad option, as I’m sure some people have already figured out.
For the average person, their homes are their biggest investment. But housing prices and mortgage rates being where they are, the entry-level still looks difficult. For the move-up category, the sector looks less and less attractive with the 30-year mortgage rate rising to its highest level in several years. Existing mortgages being at far more attractive rates, there’s no incentive to move up.
Bonds are another option. Despite the bloodbath last year, this market is likely to be more stable in 2023. That’s because bond prices generally move in an inverse relation to interest rates. When interest rates increase, bond prices go down because newer bonds carry higher rates of interest. But if the rate hikes are small and spread out as they’re likely to be this year, bonds become the stable asset that they’re typically known for. Particularly when equities look headed for a correction with the recession warning in the air.
That said, you still need stocks if you want to grow your capital. And if you can stomach the volatility, downturns are of course the best time to buy. Another way to lower your risk is by diversification. This could be by holding different kinds of assets, by holding stocks or ETFs with exposure to different markets, or by holding multi-sector conglomerates.
Bunzl plc is a distribution and services company that operates globally, providing a wide range of products to various sectors. It offers food packaging, cleaning supplies, personal protection equipment and other related items to grocery stores, hotels, restaurants and catering businesses. The company also supplies workwear and safety products to industrial and construction sectors, as well as healthcare equipment and supplies to hospitals and care facilities. Additionally, Bunzl provides packaging and store supplies to retail chains and e-commerce platforms. The company is headquartered in London, UK.
Bunzl belongs to the Zacks-classified Diversified Operations industry, which is in the top 33% of industries. Combined with the Zacks #1 (Strong Buy) rank, this is a good indication of upside.
The company is expected to grow its revenue both in 2023 and 2024 although earnings growth will positive only next year.
The Zacks Consensus Estimate for 2023 is up 4.2% in the last 60 days. The 2024 estimate is up 6.9%.
Greenwich, CT-based Star Equity is a healthcare solutions provider with global operations. Its four segments are Diagnostic Services, Diagnostic Imaging, Construction and Investments. It offers imaging services and systems primarily to healthcare professionals, including cardiologists and internal medicine physicians.
The company also develops and sells solid-state gamma cameras and provides camera maintenance services. Additionally, Star Equity Holdings manufactures modular housing units and supplies building materials to general contractors. It also holds real estate assets and manages investments.
Another member of the Diversified operations industry, this Zacks Rank #1 stock is expected to grow its earnings 5.3% this year. 2024 estimates are not yet available.
In the last 60 days, the Zacks Consensus Estimate for this company’s earnings has gone from 5 cents to 20 cents, a 300% increase.
Based in New York City, Griffon Corp. is a provider of consumer and professional, as well as home and building products all over the world. Its two operating segments are Consumer and Professional Products, and Home and Building Products. The Consumer and Professional Products segment manufactures and markets various tools, landscaping products, storage solutions, cleaning products and more. The Home and Building Products segment manufactures and sells residential and commercial garage doors, as well as rolling steel door and grille products.
A member of the same industry, Griffon is expected to see slight declines in revenue and earnings this year. But in the year ending September 2024, revenue and earnings are expected to grow a respective 5.6% and 1.5%.
The Zacks Consensus Estimate for 2023 is up 5.0% in the last 60 days. The estimate for 2024 is up 1.8%.
The shares carry a Zacks #1 rank.
One-Month Price Performance
Image Source: Zacks Investment Research
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Add Diversity to Your Portfolio with These 3 Stocks
With the second-quarter earnings season set to hit its peak in a couple of weeks, investors will be looking for management commentary on the outlook for the rest of the year. The atmosphere of caution that the Fed has injected into the markets is hard to shake off and both market watchers and stock analysts are sounding incrementally pessimistic.
And you can hardly blame them. It really is difficult to predict this market. Not only have interest rates been ratcheted up at record speed, but inflation, the thing that this action was supposed to attack, remains well above targeted levels. The Fed is watching the numbers to decide its next course of action.
Jobs data is a big part of the numbers they’re watching and the JOLTS report indicates that things are headed in the right direction. May job openings dropped across most sectors with education, transportation, real estate/rental leasing, information and construction in that order, seeing some increases. The ADP jobs data for June, however, shows an increase in private payrolls of 497,000, roughly double expectations and the biggest jump since last July. The Fed is not going to like this. We should expect a 25bp hike at the July meeting.
So where should investors keep their money? Cash is really not a bad option, as I’m sure some people have already figured out.
For the average person, their homes are their biggest investment. But housing prices and mortgage rates being where they are, the entry-level still looks difficult. For the move-up category, the sector looks less and less attractive with the 30-year mortgage rate rising to its highest level in several years. Existing mortgages being at far more attractive rates, there’s no incentive to move up.
Bonds are another option. Despite the bloodbath last year, this market is likely to be more stable in 2023. That’s because bond prices generally move in an inverse relation to interest rates. When interest rates increase, bond prices go down because newer bonds carry higher rates of interest. But if the rate hikes are small and spread out as they’re likely to be this year, bonds become the stable asset that they’re typically known for. Particularly when equities look headed for a correction with the recession warning in the air.
That said, you still need stocks if you want to grow your capital. And if you can stomach the volatility, downturns are of course the best time to buy. Another way to lower your risk is by diversification. This could be by holding different kinds of assets, by holding stocks or ETFs with exposure to different markets, or by holding multi-sector conglomerates.
Here are three examples:
Bunzl plc (BZLFY - Free Report)
Bunzl plc is a distribution and services company that operates globally, providing a wide range of products to various sectors. It offers food packaging, cleaning supplies, personal protection equipment and other related items to grocery stores, hotels, restaurants and catering businesses. The company also supplies workwear and safety products to industrial and construction sectors, as well as healthcare equipment and supplies to hospitals and care facilities. Additionally, Bunzl provides packaging and store supplies to retail chains and e-commerce platforms. The company is headquartered in London, UK.
Bunzl belongs to the Zacks-classified Diversified Operations industry, which is in the top 33% of industries. Combined with the Zacks #1 (Strong Buy) rank, this is a good indication of upside.
The company is expected to grow its revenue both in 2023 and 2024 although earnings growth will positive only next year.
The Zacks Consensus Estimate for 2023 is up 4.2% in the last 60 days. The 2024 estimate is up 6.9%.
Star Equity Holdings, Inc. (STRR - Free Report)
Greenwich, CT-based Star Equity is a healthcare solutions provider with global operations. Its four segments are Diagnostic Services, Diagnostic Imaging, Construction and Investments. It offers imaging services and systems primarily to healthcare professionals, including cardiologists and internal medicine physicians.
The company also develops and sells solid-state gamma cameras and provides camera maintenance services. Additionally, Star Equity Holdings manufactures modular housing units and supplies building materials to general contractors. It also holds real estate assets and manages investments.
Another member of the Diversified operations industry, this Zacks Rank #1 stock is expected to grow its earnings 5.3% this year. 2024 estimates are not yet available.
In the last 60 days, the Zacks Consensus Estimate for this company’s earnings has gone from 5 cents to 20 cents, a 300% increase.
Griffon Corporation (GFF - Free Report)
Based in New York City, Griffon Corp. is a provider of consumer and professional, as well as home and building products all over the world. Its two operating segments are Consumer and Professional Products, and Home and Building Products. The Consumer and Professional Products segment manufactures and markets various tools, landscaping products, storage solutions, cleaning products and more. The Home and Building Products segment manufactures and sells residential and commercial garage doors, as well as rolling steel door and grille products.
A member of the same industry, Griffon is expected to see slight declines in revenue and earnings this year. But in the year ending September 2024, revenue and earnings are expected to grow a respective 5.6% and 1.5%.
The Zacks Consensus Estimate for 2023 is up 5.0% in the last 60 days. The estimate for 2024 is up 1.8%.
The shares carry a Zacks #1 rank.
One-Month Price Performance
Image Source: Zacks Investment Research