The most widely followed market indices ended June, the second quarter, and the first half of 2022, with significant losses. Concerns over soaring inflation, the Fed’s hawkish policy stance, and the prospects of a recession weighed heavily on investors' sentiments.
The S&P 500 fell by 20.6% year-to-date and registered its worst first half since 1970, while Dow and the Nasdaq dropped 15.3% and 29.5%, respectively.
Cleveland Federal Reserve Bank President Loretta Mester said that if economic conditions do not change, she will support a 75 basis points (bps) hike in interest rates at the central bank's next monetary policy meeting this month.
In addition, Goldman Sachs updated its prediction and reported that a recession is now twice as likely as it had previously forecast, and the estimate now stands at 30%.
Amid such economic uncertainties, we think it could be wise to scoop up Globus Maritime Limited (GLBS), QuidelOrtho Corporation (QDEL), and Donegal Group Inc. (DGICA), which are fundamentally well-positioned to dodge market fluctuations.
Globus Maritime Limited (GLBS)
GLBS, an integrated dry bulk shipping company, offers marine transportation services worldwide. It owns, operates, and manages a fleet of dry bulk vessels that transport iron ore, coal, grain, steel products, cement, alumina, and other dry bulk cargoes.
In May, GLBS signed two contracts for constructing and acquiring two fuel-efficient bulk carriers of about 64,000 DWT each. The sister ships will be built at Nantong COSCO KHI Ship Engineering Co., Ltd. in China, with the first one to be delivered during the third quarter of 2024 and the second one scheduled during the fourth quarter of 2024.
GLBS' voyage revenue increased 255.2% year-over-year to $18.35 million for the quarter ended March 31, 2022. Its operating income grew marginally from its year-ago value to $11.47 million, while its income amounted to $12.08 million compared to a loss of $766.00 million in the prior period. The company's EPS came in at $0.59 compared to a loss per share of $0.11 in the previous period.
Analysts expect GLBS' revenue to increase 168% year-over-year to $18.30 million for the second quarter ending June 2022. The company's EPS is expected to grow 29.7% year-over-year to $1.31 for fiscal 2022. Moreover, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in three of the trailing four quarters. The stock has a beta of 0.03.
GLBS' POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock also has a B grade for Growth, Sentiment, and Value. Within the A-rated Shipping industry, it is ranked #10 of 44 stocks.
To see additional POWR Ratings for Stability, Quality, and Momentum for GLBS, click here.
QuidelOrtho Corporation (QDEL)
Headquartered in San Diego, California, QDEL provides various in vitro diagnostics products internationally. The company's product portfolio covers a range of point-of-care tests for infectious diseases, critical cardiac health and autoimmune biomarkers, and clinical and at-home products to detect COVID-19.
In May, QDEL completed the transaction combining QDEL and Ortho Clinical Diagnostics Holdings plc (Ortho), creating QuidelOrtho, a leader in vitro diagnostics company. The new company generated more than $3.5 billion in combined revenues in 2021 and has approximately 6,000 employees.
During the first quarter ending March 31, 2022, total revenues increased 167% year-over-year to $1.00 billion. Its operating income grew 176.8% from its year-ago value to $620.66 million, while its net income improved 169.5% from its prior-year quarter to $479.94 million. The company’s EPS rose 176.5% year-over-year to $11.31.
Analysts expect QDEL's revenue to increase 180% year-over-year to $494.48 million for the second quarter ending June 2022. The consensus EPS estimate of $2.95 represents a 293.6% improvement year-over-year for the second quarter ending June 2022.
Moreover, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in three of the trailing four quarters. The stock has a beta of 0.03.
QDEL's strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The stock also has an A grade for Value and Growth and a B for Quality. Within the D-rated Medical - Diagnostics/Research industry, it is ranked #9 of 53 stocks.
In total, we rate QDEL on eight different levels. Beyond what we've stated above, we have also given QDEL grades for Sentiment, Stability, and Momentum. Click here to see the additional POWR Ratings for QDEL.
Donegal Group Inc. (DGICA)
DGICA, an insurance holding company, provides personal and commercial lines of property and casualty insurance to businesses and individuals. It has three operational segments: Investment Function; Personal Lines of Insurance; and Commercial Lines of Insurance.
In the first quarter ending March 31, 2022, DGICA's total revenues increased 4.9% year-over-year to $207.63 million. Its net income improved 24.8% from its prior-year quarter to $13.15 million. The company's EPS rose 22.9% from its previous period to $0.43.
The $0.30 consensus EPS estimate represents a 114.3% improvement year-over-year for the fourth quarter ending December 2022. Analysts expect DGICA's revenue to increase 3.2% year-over-year to $211.78 million for the second quarter ending June 2022. The stock has a beta of 0.03.
It is no surprise that DGICA has an overall B rating, equating to Buy in our POWR Ratings system. DGICA has an A grade for Stability and a B for Momentum and Sentiment. In the C-rated Insurance - Property & Casualty industry, it is ranked #6 of 55 stocks.
Click here to see the additional POWR Ratings for DGICA (Value, Growth, and Quality).
GLBS shares were unchanged in premarket trading Friday. Year-to-date, GLBS has declined -16.67%, versus a -20.14% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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