Back to top

Image: Bigstock

2 Soaring Stocks to Buy Now for Growth and Value

Read MoreHide Full Article

Wall Street posted a rather calm start to the second quarter despite some swings, including on Friday. Investors barely flinched at the Fed’s June minutes, the hot ADP jobs report, and the lower-than-projected U.S. nonfarm payroll figures.

The Fed minutes hardly provided any novel insights into what Jay Powell and the Fed plan on doing to fight inflation. The scorching hot ADP jobs report was largely ignored on Thursday, all things considered, because Wall Street focuses on the more reliable U.S. nonfarm payroll data.

U.S. employers added 209K workers in June, which came in short of the 240K Wall Street estimate. This was the first time the jobs report came in below projections in over a year and it helped investors breathe a small sigh of relief.

Of course, the labor market remains on sturdy footing despite the Fed’s best efforts to cool the economy, with the U.S. adding tons of jobs and the unemployment rate ticking down to 3.6% from 3.7%.

Zacks Investment Research
Image Source: Zacks Investment Research

Wall Street has been forced to price in slightly higher rates for slightly longer, sending bond yields higher as well. Thankfully, Wall Street and Main Street appear to be adapting to the new higher-rate environment, and the economy is stabilizing and crucially normalizing following the Covid shocks.  

Plus, all 11 S&P 500 sectors climbed in June, following a tech-heavy rally for most of 2023.

Given this backdrop, let’s dive into two stocks that have soared in 2023 and over the last decade that investors might want to buy for both near-term and long-term upside since they offer a wonderful combination of growth and value.

Jabil ((JBL - Free Report) )

Jabil provides manufacturing services to companies in telecommunications and tons of other industries. The firm’s client list includes the likes of Apple ((AAPL - Free Report) ) and other giants in critical and game-changing industries to help make everything from smartphones and home appliances to healthcare tech and beyond.

Jabil serves original equipment manufacturers and product companies across multiple industries and end markets, including compute & storage, appliances, automotive, healthcare, telecom, energy & industrial, and more.

Zacks Investment Research
Image Source: Zacks Investment Research

Jabil’s diversification and expertise helped it grow steadily for years, including 12% average revenue growth between FY18 and FY22—posted 14% sales growth in its fiscal 2022. JBL topped our Q3 FY23 estimates in mid-June and provided upbeat guidance once again as it flexes its reliance and showcases how vital its offerings are during economic booms and cooldowns.

JBL’s positive earnings revisions activity helps it land a Zacks Rank #1 (Strong Buy) right now. And Zacks estimates call for JBL’s revenue to climb again in FY23 and FY24 to help boost its adjusted earnings by 11% and 10%, respectively.

Zacks Investment Research
Image Source: Zacks Investment Research

JBL is set to benefit from a broader onshoring/reshoring push from U.S. companies and the federal government. And five out of the six brokerage recommendations Zacks has are “Strong Buys,” alongside one “Hold.”

JBL shares have soared 115% over the past 12 months and 63% YTD to nearly double the Zacks Tech sector. Jabil stock is now up 405% during the last 10 years vs. the tech sector’s 255%, and it hit fresh highs again on Friday.

Zacks Investment Research
Image Source: Zacks Investment Research

Despite its long-term and recent outperformance, Jabil trades at a 50% discount to the Zacks Tech sector at 12.8X forward 12-month earnings. This also marks 31% value compared to its own 10-year highs and only a slight premium to its median over this stretch.

JBL also pays a small dividend at the moment and its tiny payout ratio offers plenty of long-term upside for dividend expansion.

HCA Healthcare, Inc. ((HCA - Free Report) )

HCA Healthcare is a hospital chain titan that operates across roughly 20 U.S. states and the U.K. The firm currently runs around 180 hospitals and approximately 2,300 ambulatory sites of care, which includes surgery centers, freestanding emergency rooms, urgent care centers, and physician clinics.

HCA Healthcare has posted impressively steady top-line expansion over the last decade given its size and standing in an area of the economy that’s rarely impacted by wider swings in spending—outside of the initial Covid shutdowns.

HCA Healthcare has shaken off all of the Covid setbacks, with it much easier to hire nurses and other workers and retain them compared to early on during the pandemic. Plus, people are back to getting both vital as well as voluntary procedures that many held off on during 2020. HCA’s revenue climbed 14% in FY21 and another 3% in FY22.

Zacks Investment Research
Image Source: Zacks Investment Research

HCA Healthcare beat our Q1 earnings and revenue estimates and provided upbeat guidance. HCA's same facility admissions jumped 4.4% and same facility equivalent admissions popped 7.5% on the back of “strong demand” for its services.

HCA’s FY23 and FY24 consensus earnings estimates have trended higher since its last release to help it land a Zacks Rank #2 (Buy) right now. Zacks estimates call for HCA Healthcare’s revenue to climb over 5% both this year and next to help its adjusted EPS figures pop by 7% and 9%, respectively.

HCA Healthcare shares have soared 70% in the last year to top its highly-ranked Medical – Hospital industry’s (top 14% of all Zacks industries) 55% run. HCA is up 22% in 2023 and it hit fresh highs on June 30.

HCA is currently trading well above both its 50-day and 200-day moving averages. This is all part of a 680% surge over the last 10 years to more than double its industry and blow away the S&P 500’s 170%.

Zacks Investment Research
Image Source: Zacks Investment Research

HCA Healthcare currently trades at a 20% discount to the S&P 500 and a 30% discount to the Zacks Medical sector despite blowing it away over the last five years, up 177% vs. an -18% drop. Trading at 15.6X forward 12-month earnings, HCA also offers 18% value vs. its own five-year highs.

HCA Healthcare is one of the biggest hospital chains and it currently pays a dividend that yields 0.8%, with a very sustainable 14% payout ratio. Plus, it still trades 8% below its average Zacks Price target, and 16 of the 22 brokerage recommendations Zacks has are “Strong Buys,” with only one “Sell” ranking. It is worth pointing out that HCA Healthcare is set to release its Q2 earnings results on July 27.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Apple Inc. (AAPL) - free report >>

Jabil, Inc. (JBL) - free report >>

HCA Healthcare, Inc. (HCA) - free report >>

Published in