Buy the Dip: Scoop Up These 4 Top-Rated Stocks Trading Near 52-Week Lows Because the Fed appears to be ready to raise interest rates as soon as March, the current market correction is expected to continue. So, we think investors should take advantage...
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Because the Fed appears to be ready to raise interest rates as soon as March, the current market correction is expected to continue. So, we think investors should take advantage of the dip in share prices to benefit from upside in the future. Starbucks (SBUX), Align Technology (ALGN), The Toro Company (TTC), and CEMEX (CX) are currently trading near their 52-week lows, but they hold solid upside potential. Also, these stocks are rated Buy in our proprietary rating system. Read on.
The Fed hinted at a possible interest rate hike in March 2022, its first such increase since December 2018, owing to record-high inflation. Consequently, the market is expected to remain in the correction mode for some time.
However, history shows markets seldom fail to become bullish after a significant dip. So, we think now could be an opportune time to bet on quality stocks that are currently on sale. According to strategists from Goldman Sachs to Citigroup, it's now time to buy.
So, it could be wise to bet on quality stocks Starbucks Corporation (SBUX), Align Technology, Inc. (ALGN), The Toro Company (TTC), and CEMEX, S.A.B. de C.V. (CX), which are currently trading near their 52-week lows. These stocks are rated Buy in our POWR Ratings system.
Starbucks Corporation (SBUX)
SBUX in Seattle, Wash., is one of the world's largest coffeehouse chains. It operates through three segments: Americas, International, and Channel Development. Its offerings include coffee and tea beverages, roasted whole bean and ground coffees, single-serve, and ready-to-drink beverages.
On Nov.18, 2021, Starbucks Pickup and Amazon Go announced a collaboration to launch their new store concept in New York. Katie Young, senior vice president of global growth and development at SBUX, said, "Our goal with this new store concept is to give our customers the ability to choose which experience is right for them as they go through their day, whether it is utilizing the Starbucks and Amazon apps to purchase food and beverages on the go, or deciding to stay in the lounge for the traditional third place experience Starbucks is known for."
For its fourth fiscal quarter, ended Oct.3, 2021, SBUX's total net revenues increased 31.3% year-over-year to $8.15 billion. The company's non-GAAP operating income came in at $1.6 billion, up 95.3% year-over-year, and its non-GAAP EPS was $1.00, up 96.1% year-over-year.
Analysts expect SBUX's revenue to be $32.65 billion in its fiscal 2022, representing a 12.3% year-over-year increase. The company's EPS is expected to rise 16% to $3.99 for fiscal 2023. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. The stock closed yesterday's trading session at $95.58. It is currently trading 1.2% above its 52-week low of $94.41, which it hit on Jan. 24, 2022.
SBUX's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
SBUX has an A grade for Quality. It is ranked #14 of 44 stocks within the B-Rated Restaurants industry. Click here to see the additional POWR Ratings for Growth, Momentum, Sentiment, Value, and Stability for SBUX.
Align Technology, Inc. (ALGN)
ALGN, a San Jose, Calif.-based medical device company, designs, manufactures and markets Invisalign clear aligners, iTero intraoral scanners and services for orthodontists and general practitioner dentists, and restorative and aesthetic dentistry. It has two segments, Clear Aligner and Scanners & Services.
On Oct. 27, 2021, ALGN President and CEO Joe Hogan said, "Our third quarter revenues reflect the growing confidence of doctors and patients with Invisalign treatment, iTero scanners and exocad software, as more doctors discover the benefits of digital treatment and transform their practices with the Align digital platform."
ALGN's net revenues for the third quarter, ended Sept. 30, 2021, came in at $1.02 billion, up 38.4% year-over-year. The company's non-GAAP net income was $228.57 million, up 28.5% year-over-year. Its non-GAAP EPS increased 27.6% year-over-year to $2.87.
For its fiscal 2022, analysts expect ALGN's revenue to increase 22.2% year-over-year to $4.82 billion. Its EPS is estimated to increase 20.8% to $13.41 for fiscal 2022. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. The stock closed yesterday's trading session at $457.36 and is currently trading 5.8% above its 52-week low of $432.09, which it hit on Jan. 24, 2022.
ALGN's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system.
It has a B grade for Sentiment and Quality. Within the Medical - Devices & Equipment industry, it is ranked #35 of 164 stocks. Click here to see the additional POWR Ratings for Growth, Value, Momentum, and Stability for ALGN.
The Toro Company (TTC)
TTC designs, manufactures, markets, and sells professional and residential equipment. Its segments are Professional and Residential. The company's global presence extends to more than 125 countries and it is a leading worldwide provider of innovative solutions for the outdoor environment.
On Jan.14, 2022, TTC announced that it had acquired a privately-held Intimidator Group based in Batesville, Ark. Robert and Becky Foster, owners of Intimidator Group, said, "The Toro Company has a rich history and proven track record of growing brands with the resources to fuel our future growth. With a shared commitment to furthering innovation, serving customers, and supporting our people and communities, we look forward to joining The Toro Company and continuing to provide best-in-class products and service to our customers."
TTC's net sales for the fourth quarter, ended Oct. 31, 2021, came in at $960.65 million, up 14.2% year-over-year. The company's total assets were$2.94 billion for the period ended Oct. 31, 2021, versus $2.85 billion at the end of October2020. In addition, its other assets were $24.04 million, compared to $20.32 million for the same period.
TTC's revenue is expected to increase 10.7% for its fiscal 2022 to $4.38 billion. Its EPS is estimated to increase 15.9% to $4.59 for fiscal 2023. And it surpassed EPS estimates in each of the trailing four quarters.
The stock closed yesterday's trading session at $93.40. It is trading 3.5% above its 52-week low of $90.26, which it hit on Jan. 24, 2022.
TTC has an overall B grade equating to a Buy in our POWR Ratings system. It also has a B grade for Quality. The stock is ranked #15 of 62 in the Home Improvement & Goods industry. Click here to check additional ratings for Growth, Value, Momentum, Stability, and Sentiment for TTC.
CEMEX, S.A.B. de C.V. (CX)
Headquartered in San Pedro Garza GarcÃa, Mexico, CX, together with its subsidiaries, produces, markets, distributes, and sells cement, ready-mix concrete, aggregates, clinker, and other construction materials worldwide.
On Oct. 21, 2021, CX's subsidiary, CEMEX Ventures, and Taronga Ventures announced their investment in Voyage Control to facilitate construction logistics and on-site coordination. Gonzalo Galindo, Head of CEMEX Ventures, said, "The investment from CEMEX Ventures aims to integrate Voyage Control with CEMEX's digital assets, allowing us to provide a better and more complete service to our clients."
CX's net sales increased 10% year-over-year to $3.77 billion in the third quarter, ended Sept. 30, 2021. Its operating EBITDA increased 1.8% year-over-year to $739.66 million. Furthermore, its consolidated net loss came in at $377.97 million, versus $1.53 billion in the year-ago period.
Analysts expect CX's revenue to grow 5.5% year-over-year to $15.45 billion in its fiscal 2022. Its EPS is estimated to grow 33.2% per annum for the next five years. The stock closed yesterday's trading session at $5.98. It is currently trading 13.3% above its 52-week low of $5.28, which it hit on January 24, 2022.
CX's strong fundamentals are reflected in its POWR ratings. The stock has an overall B rating, which translates to a Buy in our proprietary rating system.
In addition, it has a grade of B for Value, Momentum, and Quality. It is ranked #5 of 54 stocks in the Industrial - Building Materials industry. Click here to see the additional POWR Ratings for CX (Growth, Stability, and Sentiment).
SBUX shares fell $0.02 (-0.02%) in premarket trading Thursday. Year-to-date, SBUX has declined -18.29%, versus a -8.75% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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