Since the beginning of this year, the markets have been experiencing extreme volatility due to the Ukraine-Russia tensions, multi-decade high inflation, and the Fed’s hawkish tilt. However, the sell-off is presenting opportunities for investors to scoop up high-quality stocks.
Stocks with more than $10 billion market capitalization are generally classified as large-cap stocks. These are stocks of well-established businesses with stable revenues and earnings. Also, large-cap stocks are regarded as safer investments due to their stability amid volatile market conditions, such as these.
That’s why today we're highlighting 4 stocks from our Top 10 large-cap screen, which is just 1 of the 10 outperforming screens in our POWR Screens 10 service (more on that below). Centene Corporation (CNC), Genuine Parts Company (GPC), LKQ Corporation (LKQ), and Albertsons Companies Inc. (ACI) are large-cap stocks rated Strong Buy in our proprietary rating system.
Centene Corporation (CNC)
CNC is a multinational healthcare company that provides government-sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. It also provides education and outreach programs to inform and assist members in accessing appropriate healthcare services. It operates through the Managed Care and Specialty Services segments. It has a market capitalization of $47.79 billion.
On January 4, 2022, CNC announced that it had completed the acquisition of Magellan Health, Inc. Chairman and CEO of CNC Michael Neidorff said, “This transaction establishes a strong foundation from which we will innovate and reimagine behavioral and specialty health to provide comprehensive and integrated healthcare to our members while generating value for our state partners and shareholders.”
CNC’s revenue increased 15.1% year-over-year to $32.56 billion for the fourth quarter ended December 31, 2021. The company’s adjusted net earnings grew 122.3% year-over-year to $598 million. Also, its adjusted EPS came in at $1.01, representing an increase of 119.5% year-over-year.
Analysts expect CNC’s EPS in fiscal 2023 to increase 16.8% year-over-year to $6.32. Its revenue for the quarter ending March 31, 2022, is expected to increase 16.1% year-over-year to $34.25 billion. It surpassed Street EPS estimates in three of the trailing four quarters.
CNC’s POWR Ratings reflect solid prospects. According to our proprietary rating system, it has an overall rating of A, translating to a Strong Buy. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Growth and a B grade for Value and Quality. It is ranked #2 out of 11 stocks in the B-rated Medical – Health Insurance industry. Click here to see the other ratings of CNC for Momentum, Stability, and Sentiment.
Genuine Parts Company (GPC)
GPC is a service company engaged in distributing automotive and industrial replacement parts. It operates in the Automotive Parts and Industrial Parts segments. The Automotive Parts segment distributes replacement parts for automobiles, trucks, and other vehicles. The Industrial Parts segment distributes various industrial bearings, mechanical and fluid power transmission equipment, including hydraulic and pneumatic products, material handling components, and related parts and supplies. It has a market capitalization of $18.06 billion.
On January 4, 2022, GPC announced the acquisition of Kaman Distribution Group (KDG). KDG is a leading power transmission, automation, and fluid power industrial distributor and solutions provider, providing electro-mechanical products, bearings, power transmission, motion control, and electrical and fluid power components to MRO and OEM customers. Chairman and CEO of GPC, Paul Donahue, said, “We are delighted to announce the completion of this strategic acquisition, creating significant opportunities for our customers, suppliers, teammates, and shareholders.”
For the fiscal fourth quarter ended December 31, 2021, GPC’s sales increased 12.9% year-over-year to $4.80 billion. The company’s adjusted net income increased 15.9% year-over-year to $256.22 million. Also, its adjusted EPS came in at $1.79, up 17.7% year-over-year.
For the quarter ending June 30, 2022, GPC’s EPS is expected to increase 11.5% year-over-year to $1.94. Its revenue for the quarter ending March 31, 2022, increased 10.7% year-over-year to $4.94 billion. It surpassed consensus EPS estimates in each of the trailing four quarters.
GPC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has a B grade for Growth, Stability, Sentiment, and Quality. Within the Auto Parts industry, it is ranked first out of 66 stocks. To see the other ratings of GPC for Value and Momentum, click here.
LKQ Corporation (LKQ)
LKQ is a holding company that distributes vehicle products, including replacement parts, components, and systems used to repair and maintain vehicles, specialty vehicle products and accessories, and automotive glass products. Its segments include Wholesale-North America; Europe; and Specialty. The company has a market capitalization of $14.33 billion.
LKQ’s revenue increased 7.8% year-over-year to $3.18 billion for the fourth quarter ended December 31, 2021. The company’s adjusted net income increased 19.9% year-over-year to $253.85 million. In addition, its adjusted EPS came in at $0.87, representing an increase of 26% year-over-year.
Analysts expect LKQ’s EPS and revenue for the quarter ending March 31, 2022, to increase 5.3% and 3.3% year-over-year to $0.99 and $3.28 billion, respectively. It surpassed Street EPS estimates in each of the trailing four quarters.
LKQ’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has a B grade for Growth, Value, and Quality. It is ranked #2 in the Auto Parts industry. Click here to see the additional ratings of LKQ for Momentum, Stability, and Sentiment.
Albertsons Companies, Inc. (ACI)
ACI is a food and drug retailer in the U.S. The company offers groceries, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services. It operates under twenty banners, including Tom Thumb, Carrs, Jewel-Osco, Haggen, Market Street, Kings Food Markets, Vons, Albertsons, Randalls, Acme, Safeway, and Balducci’s Food lover's market. It has a market capitalization of $14.16 billion.
On November 11, 2021, ACI announced the launch of Albertsons Media Collective, a retail media network designed to deliver digitally native, shopper-centric, and engaging branded content to the company’s network of shoppers. Kristi Argyilan, SVP Retail Media at ACI, said, “Albertsons Media Collective will further our goal of bringing brands and our customers together by delivering an unrivaled vendor and customer experience and truly reimagining marketing for what’s next.”
For the fiscal third quarter ended December 31, 2021, ACI’s net sales and other revenue increased 8.5% year-over-year to $16.72 billion. The company’s adjusted net income increased 18.2% year-over-year to $457.20 million. Also, its adjusted EPS increased 19.7% year-over-year to $0.79.
For the quarter ending February 28, 2022, ACI’s EPS is expected to increase 5% year-over-year to $0.63. Its revenue for the quarter ending May 31, 2022, is expected to increase 6.6% year-over-year to $21.81 billion. It surpassed consensus EPS estimates in each of the trailing four quarters.
ACI’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Growth and a B grade for Value, Sentiment, and Quality. Within the A-rated Grocery/Big Box Retailers industry, it is ranked first out of 39 stocks. To see the other ratings of ACI for Momentum and Stability, click here.
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CNC shares were trading at $81.27 per share on Tuesday morning, down $0.79 (-0.96%). Year-to-date, CNC has declined -1.37%, versus a -9.10% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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