Concerns over high inflation and the Fed’s aggressive monetary tightening kept the market under immense pressure in the year's first half. However, equities have rebounded since July thanks to better-than-expected corporate earnings and the expectation that inflation will cool off.
The U.S. consumer price index rose 8.5% year-over-year in July, slightly declining from the 40-year high level. However, this level is still uncomfortable for the policymakers, indicating the possibility of continued aggressive rate hikes.
"Rates still have to move higher even though in the very short run the market is reacting positively... Inflation is a bit more moderate, but inflation has not disappeared as a problem as yet," said Chuck Lieberman, chief investment officer at Advisors Capital Management.
Given this backdrop, the market is expected to remain volatile. Therefore, it could be wise to invest in quality stocks Progress Software Corporation (PRGS), Crane Holdings, Co. (CR), and Forrester Research, Inc. (FORR), which are currently trading at reasonable price levels.
Progress Software Corporation (PRGS)
PRGS offers software products to develop, deploy and manage high-impact business applications. Its offerings include OpenEdge, Developer Tools, Sitefinity, Corticon, DataDirect Connect, MOVEit, Chef, WhatsUp Gold, Kemp Loadmaster, and Kemp Flowmon Network Visibility, which aids businesses in innovating and fueling momentum.
With the latest release of the Flowmon network solution, on June 29, 2022, PRGS extends its multi-cloud monitoring and threat detection capabilities. Organizations can now achieve unified monitoring of their multi-cloud ecosystems from a single location while improving their cybersecurity posture.
During the second quarter (ended May 31, 2022), PRGS’ total revenue increased 21.4% year-over-year to $148.75 million. Its non-GAAP operating income grew 23.3% from the year-ago value to $61.30 million, while its non-GAAP net income increased 25.7% year-over-year to $45.89 million. The company’s non-GAAP EPS came in at $1.04, representing a 26.8% increase year-over-year.
Analysts expect PRGS’ EPS and revenue for the fourth quarter (ending November 30, 2022) to increase 20.1% and 14.9% year-over-year to $1.10 and $165.19 million, respectively. The company surpassed the consensus EPS estimates in each of the trailing four quarters.
The stock has gained 12.7% over the past month to close the last trading session at $59.58.
PRGS’ strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Quality and a B for Value and Growth. Of the 155 stocks in the Software - Application industry, it is ranked #3. To see the other ratings of PRGS for Momentum, Stability, and Sentiment, click here.
Crane Holdings, Co. (CR)
CR is a diversified manufacturer of engineered industrial products operating through four business segments: Aerospace & Electronics, Process Flow Technologies, and Payment & Merchandising Technologies.
On July 25, 2022, CR announced a quarterly dividend of $0.47, payable on September 14, 2022.
CR’s net sales increased 1% year-over-year to $864.30 million for the second quarter ended June 30, 2022. The company’s adjusted net income increased 5.3% year-over-year to $223.50 million, while its adjusted EPS increased 8.3% year-over-year to $3.89 for the six months ended June 30, 2022.
The consensus revenue estimate of $848.88 million for the fourth quarter ending December 31, 2022, represents a growth of 10.2% from the same period last year. The consensus EPS estimate of $1.95 for the next quarter indicates a 55.6% year-over-year increase. The company has an excellent earning surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past month, the stock has gained 17.4% to close the last trading session at $105.48.
CR’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
It has an A grade for Quality and a B for Value and Stability. It is ranked #2 of 79 stocks in the B-rated Industrial - Machinery industry. Click here to see the other ratings of CR for Growth, Momentum, and Sentiment.
Forrester Research, Inc. (FORR)
FORR is an independent research and advisory firm operating through the Research, Consulting, and Events segments. Its primary subscription research product is Research, which offers clients access to its research designed to inform their strategic decision-making.
On June 7, 2022, the company announced Forrester Decisions for Digital Business & Strategy, a new research service designed to help digital leaders across industries deliver business-wide digital strategies to increase customer acquisition and profitability. Service addresses digital leaders' utmost priorities to deliver stronger CX and drive customer retention and loyalty.
In the fiscal second quarter ended June 30, 2022, FORR’s net revenues increased 15.2% year-over-year to $148.25 million. Its adjusted income from operations grew 41.8% from the year-ago value to $27.89 million, while its adjusted net income increased 51.4% from the prior year period to $19.22 million. In addition, FORR’s non-GAAP EPS came in at $1, registering an increase of 51.5% year-over-year.
Analysts expect FORR’s EPS to increase 10.1% year-over-year to $2.30 in fiscal 2022 (ending December 31, 2022). Its revenue for the quarter ending September 30, 2022, is expected to increase 7.3% year-over-year to $126.80 million. The stock has surpassed the consensus EPS estimates in each of the trailing four quarters.
FORR’s shares have declined 0.8% over the past month to close the last trading session at $44.96.
FORR’s POWR Ratings reflect solid prospects. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Growth and Quality and a B for Value, Stability, and Sentiment. In the Financial Services (Enterprise) industry, it is ranked first of 106 stocks. Click here to see the FORR’s rating for Momentum.
PRGS shares were trading at $49.74 per share on Monday morning, up $0.16 (+0.32%). Year-to-date, PRGS has gained 3.83%, versus a -9.68% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
3 Quality Stocks to Buy at Reasonable Price Levels Right Now StockNews.com
