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5 Solid Stocks to Buy Despite Adverse Economic Data
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On Apr 25, the Department of Commerce reported a series of economic data for first-quarter 2024, which raised concerns regarding the health of the economy and persisting inflation. U.S. GDP grew at a 1.6% annualized pace, well below the consensus estimate of 2.5%. GDP increased 3.4% and 4.9% year over year, respectively, in the fourth and third quarters 2023. In 2023, the economy grew 2.5% year over year.
Consumer spending – the largest driver of GDP – increased 2.5% in first-quarter 2024, lagging the 3% consensus estimate and 3.3% rise in fourth-quarter 2023. The personal consumption expenditure (PCE) price index climbed 3.4% year over year in the first quarter compared with the 1.8% rise in the previous quarter. This marked the biggest gain in PCE inflation in a year.
The core (excluding volatile food and energy items) PCE inflation — the Fed’s favorite inflation gauge — jumped 3.7% year over year in first-quarter 2024, significantly above the Fed’s 2% target rate. The price index for GDP — popularly known as the “chain-weighted” level — increased at a 3.1% annualized pace in the first quarter, above the consensus estimate of 3%.
Meanwhile, a long list of stocks have popped year to date despite adverse economic data. Many of these stocks carry the top Zacks Rank with more upside left. Investment in these stocks should be fruitful in the near term.
Our Top Picks
We have narrowed our search to five large-cap stocks with more than 20% returns year to date. These stocks have seen positive earnings estimate revisions in the last 30 days and have more room to run. Finally, each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Crane Co. (CR - Free Report) manufactures and sells engineered industrial products in the Americas, Europe, the Middle East, Asia, and Australia. CR has three segments: Aerospace & Electronics, Process Flow Technologies, and Engineered Materials.
Crane has an expected revenue and earnings growth rate of 9.9% and 15.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the last seven days.
Spotify Technology S.A. (SPOT - Free Report) provides audio streaming services worldwide. SPOT operates through two segments, Premium and Ad-Supported. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers.
The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its subscribers on their computers, tablets, and compatible mobile devices. SPOT also offers sales, distribution and marketing, contract research and development, and customer support services.
Spotify Technology has an expected revenue and earnings growth rate of 16.2% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 28.3% over the last seven days.
Wells Fargo & Co.’s (WFC - Free Report) first-quarter 2024 results show improvement in non-interest income and a decline in provisions. Progress on efficiency initiatives, such as branch footprint reduction, will continue to support expense reduction and drive WFC’s bottom line.
A decent deposit balance will keep supporting WFC’s financials, given the strength in the consumer banking and lending segment and will aid its liquid profile. Additionally, WFC’s strong liquidity position will support its capital distribution activities.
Wells Fargo has an expected revenue and earnings growth rate of 1.8% and 9.5%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 2.8% over the last 30 days.
Westinghouse Air Brake Technologies Corp. (WAB - Free Report) continues to benefit from solid growth across its Freight and Transit segments. While the Freight segment benefits from growth in services and components, the Transit segment gains from strong aftermarket and original equipment manufacturing sales.
For full-year 2024, WAB expects sales in the $10.05-$10.35 billion band. Adjusted earnings per share for 2024 are estimated between $6.50 and $6.90. Management anticipates strong cash flow generation, with operating cash flow conversion exceeding 90%. WAB’s pro-investor stance, which is evident from its announcements of a 17.6% dividend hike and a $1 billion share buyback authorization, looks encouraging.
Westinghouse Air Brake Technologies has an expected revenue and earnings growth rate of 6.5% and 19.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.3% over the last seven days.
Gold Fields Ltd. (GFI - Free Report) operates as a gold producer with reserves and resources in Chile, South Africa, Ghana, Canada, Australia, and Peru. GFI also explores copper and silver deposits.
GFI has an expected revenue and earnings growth rate of 32.6% and 64.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the last 30 days.
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5 Solid Stocks to Buy Despite Adverse Economic Data
On Apr 25, the Department of Commerce reported a series of economic data for first-quarter 2024, which raised concerns regarding the health of the economy and persisting inflation. U.S. GDP grew at a 1.6% annualized pace, well below the consensus estimate of 2.5%. GDP increased 3.4% and 4.9% year over year, respectively, in the fourth and third quarters 2023. In 2023, the economy grew 2.5% year over year.
Consumer spending – the largest driver of GDP – increased 2.5% in first-quarter 2024, lagging the 3% consensus estimate and 3.3% rise in fourth-quarter 2023. The personal consumption expenditure (PCE) price index climbed 3.4% year over year in the first quarter compared with the 1.8% rise in the previous quarter. This marked the biggest gain in PCE inflation in a year.
The core (excluding volatile food and energy items) PCE inflation — the Fed’s favorite inflation gauge — jumped 3.7% year over year in first-quarter 2024, significantly above the Fed’s 2% target rate. The price index for GDP — popularly known as the “chain-weighted” level — increased at a 3.1% annualized pace in the first quarter, above the consensus estimate of 3%.
Meanwhile, a long list of stocks have popped year to date despite adverse economic data. Many of these stocks carry the top Zacks Rank with more upside left. Investment in these stocks should be fruitful in the near term.
Our Top Picks
We have narrowed our search to five large-cap stocks with more than 20% returns year to date. These stocks have seen positive earnings estimate revisions in the last 30 days and have more room to run. Finally, each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Crane Co. (CR - Free Report) manufactures and sells engineered industrial products in the Americas, Europe, the Middle East, Asia, and Australia. CR has three segments: Aerospace & Electronics, Process Flow Technologies, and Engineered Materials.
Crane has an expected revenue and earnings growth rate of 9.9% and 15.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the last seven days.
Spotify Technology S.A. (SPOT - Free Report) provides audio streaming services worldwide. SPOT operates through two segments, Premium and Ad-Supported. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers.
The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its subscribers on their computers, tablets, and compatible mobile devices. SPOT also offers sales, distribution and marketing, contract research and development, and customer support services.
Spotify Technology has an expected revenue and earnings growth rate of 16.2% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 28.3% over the last seven days.
Wells Fargo & Co.’s (WFC - Free Report) first-quarter 2024 results show improvement in non-interest income and a decline in provisions. Progress on efficiency initiatives, such as branch footprint reduction, will continue to support expense reduction and drive WFC’s bottom line.
A decent deposit balance will keep supporting WFC’s financials, given the strength in the consumer banking and lending segment and will aid its liquid profile. Additionally, WFC’s strong liquidity position will support its capital distribution activities.
Wells Fargo has an expected revenue and earnings growth rate of 1.8% and 9.5%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 2.8% over the last 30 days.
Westinghouse Air Brake Technologies Corp. (WAB - Free Report) continues to benefit from solid growth across its Freight and Transit segments. While the Freight segment benefits from growth in services and components, the Transit segment gains from strong aftermarket and original equipment manufacturing sales.
For full-year 2024, WAB expects sales in the $10.05-$10.35 billion band. Adjusted earnings per share for 2024 are estimated between $6.50 and $6.90. Management anticipates strong cash flow generation, with operating cash flow conversion exceeding 90%. WAB’s pro-investor stance, which is evident from its announcements of a 17.6% dividend hike and a $1 billion share buyback authorization, looks encouraging.
Westinghouse Air Brake Technologies has an expected revenue and earnings growth rate of 6.5% and 19.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.3% over the last seven days.
Gold Fields Ltd. (GFI - Free Report) operates as a gold producer with reserves and resources in Chile, South Africa, Ghana, Canada, Australia, and Peru. GFI also explores copper and silver deposits.
GFI has an expected revenue and earnings growth rate of 32.6% and 64.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the last 30 days.