Due to various macroeconomic challenges, Wall Street ended 2022 with its most significant loss since 2008. However, the Dow Jones, S&P 500, and Nasdaq Composite all saw an excellent run in January, rising 2.5%, 5.8%, and 10.8%, respectively. S&P 500 witnessed its best January in four years.
Moreover, due to "surprisingly resilient" demand in the United States and Europe, dropping energy prices, and the reopening of China's economy following the relaxation of its stringent COVID-19 restrictions, the International Monetary Fund (IMF) recently increased its growth outlook for 2023.
Following a 2% growth in 2022, the IMF now projects that the U.S. GDP will grow by 1.4% in 2023, up from its earlier estimate of 1%. In addition, CNBC's Jim Cramer believes the bull market is here. He said, "If we're in a bull market, and I think we are, you have to prepare yourself."
Given the backdrop, investors could consider buying quality stocks KT Corporation (KT), Universal Logistics Holdings, Inc. (ULH), and Genie Energy Ltd. (GNE), which look poised to deliver stable returns in the future.
KT Corporation (KT)
Headquartered in Korea, KT is a leading telecommunications service provider. The company operates through four segments: Information and Communications Technologies; Finance; Satellite Broadcasting; and Others.
KT's forward EV/Sales of 0.96x is 52.9% lower than the industry average of 2.05x. Its forward EV/EBIT of 10.07x is 35.5% lower than the industry average of 15.60x.
KT's trailing-12-month net income margin of 5.55% is 40.9% higher than the industry average of 3.94%, while its trailing-12-month EBITDA margin of 19.70% is 3.9% higher than the industry average of 18.95%.
KT's operating revenue increased 4.2% year-over-year to ₩6.48 trillion ($5.09 billion) in the third quarter of the fiscal year 2022. Its operating income increased 18.4% year-over-year to ₩452.9 billion ($355.71 million). Also, its EBITDA came in at ₩1.36 trillion ($1.07 billion), up 6.4% year-over-year.
Street expects KT's revenue to increase marginally year-over-year to $15.07 billion in 2023. Its EPS is expected to increase 3.9% year-over-year to $2.08. Over the past year, the stock has gained 10.4% to close the last trading session at $14.31.
KT's strong fundamentals are reflected in its POWR Ratings. The stock's overall A rating equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
KT has an A grade for Value and Stability. Within the A-rated Telecom – Foreign industry, it is ranked #3 out of 47 stocks. Beyond what is stated above, we've also rated KT for Momentum, Growth, Sentiment, and Quality. Get all KT ratings here.
Universal Logistics Holdings, Inc. (ULH)
ULH provides transportation and logistics solutions in the United States, Mexico, Canada, and Colombia. The business engages in the trucking; intermodal; logistics; and brokerage segments.
In terms of forward Price/Book, ULH is currently trading at 2.14x, 19.8% lower than the industry average of 2.67x. The stock's forward Price/Sales multiple of 0.47 is 66% lower than the industry average of 1.38.
ULH's EBIT margin of 11.15% is 14.8% higher than the 9.72% industry average. Its EBITDA margin of 14.33% is 10.4% higher than the 12.98% industry average.
ULH's operating revenues increased 13.5% year-over-year to $505.69 million for the third quarter ended October 1, 2022. Its operating profit came in at $48.48 million, up 371.9% year-over-year. Moreover, Its EPS came in at $1.84, up 384.2% year-over-year.
ULH's EPS is estimated to grow 3% per annum for the next five years. It surpassed EPS estimates in all four trailing quarters. The stock has gained 110.9% over the past year to close the last trading session at $35.92.
It's no surprise that ULH has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Growth and a B for Value, Sentiment, and Stability. Within the A-rated Air Freight & Shipping Services industry, it is ranked first among 16 stocks.
Beyond what is stated above, we've also rated ULH for Momentum and Quality. Get all ULH ratings here.
Genie Energy Ltd. (GNE)
GNE and its subsidiaries supply electricity and natural gas to residential and small business customers internationally. It has three operational segments: Genie Retail Energy (GRE); GRE International; and Genie Renewables.
In terms of trailing-12-month Price/Book, GNE is currently trading at 1.79x, 7.4% lower than the industry average of 1.93x. The stock's trailing-12-month Price/Sales multiple of 0.82 is 61.5% lower than the industry average of 2.12.
GNE's gross profit margin of 49.45% is 26.9% higher than the 38.98% industry average. Its EBIT margin of 26.20% is 41.9% higher than the 18.46% industry average.
GNE's gross profit came in at $43.14 million for the third quarter that ended September 30, 2022, up 24.7% year-over-year. The company's operating income increased 34.8% year-over-year to $23.54 million, while its adjusted EBITDA increased 35.4% from the year-ago value to $24.50 million.
Over the past year, the stock has gained 117.7% to close the last trading session at $10.95.
GNE's overall A rating equates to a Strong Buy in our POWR Ratings system. It has an A grade for Value and a B for Growth, Momentum, and Sentiment. The stock is ranked first among 66 stocks in the Utilities - Domestic industry. We've also rated GNE for Stability and Quality. Get all GNE ratings here.
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KT shares were trading at $14.23 per share on Wednesday afternoon, down $0.08 (-0.56%). Year-to-date, KT has gained 5.41%, versus a 5.60% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
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