Persistent inflation and uncertainty about when the US central bank (Fed) will cut interest rates continue to create headwinds for the stock market.
Surprisingly good results in the first quarter reports, weak labor market data and indications from the Fed that the next interest rate change is unlikely to be a hike have boosted investor optimism, however. CNBC.
In uncertain times and a challenging macroeconomic landscape, Wolfe Research identifies a selection of stocks that are determined to outperform the market.
“These stocks are attractive not only because of their strong dividend growth, but also because of their strong cash flow,” emphasizes Wolfe Research analyst Chris Senyek.
Opportunities in the energy sector
The energy company Constellation Power has seen a staggering 85 percent growth in share value so far this year, and has doubled its shares in the past year.
The company, which is major in electric power and natural gas, also beat expectations for earnings for the first quarter. The management has also announced that more shares are being bought for 1 billion dollars.
The technology company HP Inc also made the list, which itself has seen a more modest decline in share value of 1.2 percent so far this year.
Despite this, the company has increased its shares by 5 percent in the past year. The Tek company expects a free cash flow yield of 9 percent for 2024.
The company’s chief executive, Enrique Lores, is optimistic about stronger demand driven by AI and other technology, which could set HP up for further growth.
Growth despite challenges
The pharmaceutical company Johnson & Johnson also stand out, despite falling 4 percent so far this year. The company recently surpassed consensus on first-quarter revenue, thanks to an increase in medical device sales.
The company has also recently announced that it plans to invest 6.5 billion dollars to resolve ongoing litigation, the newspaper writes.
Other selected stocks were on Wolfe Research’s list eBay and Power of Vista.
2024-05-13 16:55:18
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