The stock market moved higher on Tuesday. The S&P 500 and the Dow moved higher and recovered some of their losses. During intraday trading, the Dow Jones Industrial Average gained more than 285 points, while the S&P 500 gained about 1%. Investors are currently looking ahead to the Federal Reserve’s decision this week on monetary policy.
The inflation-ridden United States economy is set to withstand the Russian invasion of Ukraine. Bruce Kasman, the chief economist at JPMorgan Chase & Co. (JPM), said, “The U.S. economy has shown already pretty significant resilience in the face of shocks — the underpinnings are healthy.”
With this in mind, today we're highlighting 3 exciting stocks from our Top 10 Under $10 screen, which is just 1 of the 10 screens in our POWR Screens 10 service (more on that below). We believe the fundamentally strong stocks Telefônica Brasil S.A. (VIV), Universal Technical Institute, Inc. (UTI), and ARC Document Solutions, Inc. (ARC), which are currently trading under $10, might be worth buying.
Telefônica Brasil S.A. (VIV)
VIV is a mobile and fixed telecom services provider to residential and corporate consumers in Brazil. Its fixed-line services portfolio includes local, domestic long-distance, and international long-distance calls, while its mobile portfolio comprises voice and broadband internet access. It is headquartered in Sao Paolo, Brazil.
For the fiscal fourth quarter, VIV’s net operating revenue increased 2.8% year-over-year to R$11.50 billion ($2.27 billion). Recurring EBITDA rose 1.1% from the prior-year quarter to R$4.93 billion ($971.75 million), while its net income improved 103.2% from the same period last year to R$2.63 billion ($517.69 million).
The consensus EPS estimate of $0.15 for the fiscal quarter ending March 2022 indicates a 50% year-over-year increase. Likewise, the consensus revenue estimate for the same period of $2.05 billion reflects an improvement of 3.4% from the prior-year quarter.
The stock has gained 21.2% over the past six months and 13.5% year-to-date to close Friday’s trading session at $9.82.
VIV’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
VIV has a Stability, Sentiment, and Quality grade of B. In the 46-stock Telecom – Foreign industry, it is ranked #5. The industry is rated A.
Click here to see the additional POWR Ratings for VIV (Growth, Value, and Momentum).
Universal Technical Institute, Inc. (UTI)
UTI operates as a transportation and technical programs provider in the United States. The company provides post-secondary education for aspirants seeking careers as professional automotive, diesel, collision repair, and marine technicians.
On February 28, UTI announced that it had launched the first session in its Bayerische Motoren Werke Aktiengesellschaft (BMWYY) FastTrack technician training programs at the Orlando, Florida campus, with a second location to begin offering the 12-week advanced training program. This might prove to be beneficial for the company.
On February 22, UTI announced the rolling out of its Ford Motor Co. (F) FACT (Ford Accelerated Credential Training Program) for training its students in keeping the next generation of vehicles on the road, as the electric vehicle (EV) market continues to grow. This is expected to mark a step in the company’s overall EV strategy.
UTI’s revenues increased 38% year-over-year to $105.08 million in the fiscal first quarter ended December 31. Net income per share came in at $0.25, up substantially from its negative year-ago value. Adjusted net income rose 1,321.3% from the prior-year period to $15.39 million.
Street EPS estimate for the fiscal year 2022 of $0.58 reflects a rise of 93.3% year-over-year. Likewise, Street revenue estimate of $412.88 million for the same period indicates an increase of 23.2% from the prior year. Moreover, UTI has an impressive surprise earnings history, as it has topped consensus EPS estimates in three out of the trailing four quarters.
Over the past year, the stock has gained 32.6% to close Friday’s trading session at $8.29. It has gained 23% over the past six months.
It’s no surprise that UTI has an overall A rating, which translates to Strong Buy in our POWR Ratings system.
UTI has an A grade for Growth and a B grade for Value, Sentiment, and Quality. It is ranked #1 out of the 24 stocks in the Outsourcing – Education Services industry.
Click here to see the additional UTI ratings for Momentum and Stability.
ARC Document Solutions, Inc. (ARC)
ARC operates as a digital printing company that provides digital printing and document-related services in the U.S. The company’s offerings include managed print services, cloud-based document management software, and other digital hosting services.
On February 10, ARC announced a quarterly dividend of $0.05 per share, payable to shareholders on May 31. This reflects upon the company’s ability to pay back its shareholders.
For the fiscal fourth quarter ended December 31, ARC’s total net sales increased 7.6% year-over-year to $69.25 million. Adjusted net income attributable to ARC came in at $2.72 million, up 168.3% from the prior-year quarter, while EPS attributable to ARC shareholders rose 200% from the prior-year period to $0.06.
Analysts expect ARC’s EPS to increase 36.4% year-over-year to $0.30 for fiscal 2022, while Street expects revenue for the same period to improve 5.8% from the same period the prior year to $288.03 million.
ARC’s shares have gained 43.7% over the past year and 35% over the past six months to close Friday’s trading session at $3.55.
This promising outlook is reflected in ARC’s POWR Ratings. The stock has an overall A rating equating to Strong Buy in our proprietary rating system.
ARC has a Value, Sentiment, and Quality grade of A and a Growth grade of B. In the 44-stock Outsourcing – Business Services industry, it is ranked #1. The industry is rated B.
In addition to the POWR Rating grades we’ve stated above, one can see ARC ratings for Momentum and Stability here.
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VIV shares were trading at $9.83 per share on Tuesday afternoon, up $0.05 (+0.51%). Year-to-date, VIV has gained 13.85%, versus a -11.02% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
3 Stocks Under $10 That are Screaming Buys: Telefonica Brasil, ARC Document Solutions, and Universal Technical Institute StockNews.com
