The October inflation report raised optimism as the Consumer Price Index (CPI) grew 7.7% year-over-year, lower than expected. Furthermore, wholesale prices climbed less than anticipated, with the Producer Price Index (PPI) increasing 0.2% for the month, compared to the Dow Jones forecast of 0.4%.
Amid favorable inflation data, the Fed is expected to loosen its monetary tightening in the near future. Federal Reserve Vice Chair Lael Brainard said, “I think it will probably be appropriate soon to move to a slower pace of rate increases.”
The market rejoiced at the inflation report, and CNBC’s Jim Cramer believes the stock market’s current rally could last through the middle of next month.
Given the backdrop, investors could buy quality stocks Gilead Sciences, Inc. (GILD), Biogen Inc. (BIIB), Hillenbrand, Inc. (HI), and TravelCenters of America Inc. (TA) this month.
Gilead Sciences, Inc. (GILD)
Biopharmaceutical company GILD discovers, develops, and commercializes medicines in the areas of unmet medical need in the United States, Europe, and internationally for over three decades.
On November 2, 2022, GILD announced that the U.S. Food and Drug Administration (FDA) approved its supplemental new drug application for Vemlidy® (tenofovir alafenamide) for treating chronic hepatitis B virus (HBV) infection and compensated liver disease. This approval marks a significant development in GILD’s research and portfolio diversification.
Moreover, last month, Kite, a GILD company, and Refuge Biotechnologies, Inc. signed an exclusive, worldwide license agreement to create potential treatments for blood cancers.
GILD’s trodelvy’s sales came in at $180 million for the third quarter that ended September 30, up 78.2% year-over-year. The company’s current liabilities came in at $10.42 billion for the period September 30, 2022, compared to $11.61 billion for the period ended December 31, 2021.
Also, its total liabilities and equity came in at $62.56 billion, compared to $67.95 billion for the same period.
Street expects GILD’s revenue to come in at $6.65 billion for the quarter ending December 2022. Its EPS is expected to increase 115.3% year-over-year to $1.49 for the same period. It surpassed EPS estimates in three of the four trailing quarters. Over the past nine months, the stock has gained 33.9% to close the last trading session at $82.88.
GILD’s strong fundamentals are reflected in its POWR Ratings. The stock’s overall A rating indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
GILD has an A grade for Value and Sentiment and a B for Quality. In the Biotech industry, it is ranked #3 out of 380 stocks. Click here for the additional POWR Ratings for Stability, Growth, and Momentum for GILD.
Biogen Inc. (BIIB)
BIIB discovers, develops, manufactures, and delivers therapies for treating neurological and neurodegenerative diseases.
On October 13, 2022, BIIB and GoodRx Holdings, Inc. (GDRX), a leading consumer-focused digital healthcare platform, announced their partnership to improve the patient and healthcare provider experience at the commencement of a new specialized therapy. This collaboration is expected to offer mutual benefits to both companies.
BIIB’s net income came in at $1.13 billion for the third quarter that ended September 30, 2022, up 256.8% year-over-year. Moreover, its EPS came in at $7.84, up 253.2% year-over-year. Its total assets came in at $24.85 billion for the period September 30, 2022, compared to $23.88 billion for the period ended December 31, 2021.
BIIB’s revenue is expected to come in at $2.44 billion for the quarter ending December 2022. Its EPS is expected to increase 10.5% year-over-year to $4.04 for the same period. It surpassed EPS estimates in three of four trailing quarters. Over the past six months, the stock has gained 51.2% to close the last trading session at $300.01.
BIIB’s POWR Ratings reflect this promising outlook. The stock’s overall A rating equates to a Strong Buy in our POWR Ratings system. It also has an A grade for Value, Quality, and Sentiment.
BIIB is ranked #5 in the Biotech industry. We’ve also rated BIIB for Stability, Momentum, and Growth. Get all BIIB ratings here.
Hillenbrand, Inc. (HI)
HI is a diversified industrial company in the United States and globally. The company operates through three segments: Advanced Process Solutions; Molding Technology Solutions; and Batesville.
On November 17, 2022, Kim Ryan, HI’s President, and CEO, said, “We built upon our track record of execution as we delivered top-line growth and margin expansion in our industrial segments despite unprecedented macro headwinds from inflation, supply chain disruption, and foreign currency.”
On October 6, 2022, HI acquired LINXIS Group from IBERIS INTERNATIONAL S. R.L, an associate of IK Partners and other vendors. The company expects this acquisition to help it grow as a world-class industrial company and deliver long-term value to our shareholders.
HI’s gross profit came in at $242.7 million for the fourth quarter that ended September 30, 2022, which increased marginally year-over-year. Moreover, its net income came in at $56.8 million, up 3.3% year-over-year, while its EPS came in at $0.81, up 9.5% year-over-year.
Analysts expect HI’s revenue to increase by 4.1% year-over-year to $3.04 billion in 2023. Its EPS is expected to grow 8.3% year-over-year to $4.18 in 2023. It surpassed EPS estimates in all four trailing quarters. Over the past month, the stock has gained 17.9% to close the last trading session at $44.49.
HI has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has a B for Growth, Value, Quality, and Sentiment. It is ranked #3 out of 36 stocks in the A-rated Industrial - Manufacturing industry.
Beyond what is stated above, we’ve also rated HI for Stability and Momentum. Get all HI ratings here.
TravelCenters of America Inc. (TA)
TA operates travel centers, truck service facilities, and restaurants in the United States and Canada. It offers diesel and gasoline fuel, truck maintenance and repair, full-service and quick-service restaurants, travel stores, car and truck parking, and other services.
On October 26, TA announced the opening of four new travel centers, the planned opening of four additional locations by the end of 2022, and the completed enhancements of over 50 travel centers as part of a site upgrade plan announced last year. The company’s expansionary policies should boost revenues.
TA’s total revenues came in at $2.81 billion for the third quarter that ended September 30, 2022, up 44.9% year-over-year. Its net income increased 66.5% year-over-year to $36.98 million. In addition, its EPS increased 63.8% year-over-year to $2.49.
TA’s revenue is expected to increase 48.4% year-over-year to $10.89 billion in 2022. Its EPS is estimated to increase 124.6% year-over-year to $9.23 in 2022. It has surpassed EPS estimates in three of four trailing quarters. Over the past six months, the stock has gained 40.3% to close the last trading session at $51.
TA’s overall B rating equates to a Buy in our POWR Ratings system. It has an A grade for Value and a B grade for Growth. It is ranked #3 out of 46 stocks in the Specialty Retailers industry.
We’ve also rated TA for Momentum, Sentiment, Stability, and Quality. Get all TA ratings here.
GILD shares were trading at $82.83 per share on Thursday morning, down $0.05 (-0.06%). Year-to-date, GILD has gained 18.30%, versus a -16.66% 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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