The June Consumer Price Index came in higher than expected, despite the Fed’s aggressive policy tightening. However, experts believe the market will likely end the year higher, thus providing promising buy-low opportunities now. Against this backdrop, it could be wise to invest in Strong Buy-rated fundamentally sound stocks VEON (VEON), Xperi Holding (XPER), ArcelorMittal (MT), and Millicom (TIGO), which have a more than 50% upside potential. Read on….
The stock market has witnessed a significant plunge this year due to sky-rocketing inflation and Fed’s aggressive moves to tame the price hikes. The Consumer Price Index increased 9.1% year-over-year in June, outpacing the 8.8% Dow Jones estimate. Traders are betting that the red hot inflation might prompt the Fed to raise interest rates by as much as 1% later this month.
Although volatility is expected to remain in the coming months, the major indexes are expected to stand higher by the end of 2022. Moreover, experts believe the current rock-bottom share prices have started to provide promising buy-low opportunities that outweigh the risk of further declines.
Given the backdrop, investors should invest in quality stocks VEON Ltd. (VEON), Xperi Holding Corporation (XPER), ArcelorMittal SA (MT), and Millicom International Cellular SA (TIGO), which could potentially see more than 50% in the near term. These stocks are rated Strong Buy in our property POWR Ratings system.
VEON Ltd. (VEON)
Headquartered in Amsterdam, Netherlands, VEON provides mobile and fixed-line telecommunications services through a range of wireless, fixed, and broadband internet services.
On June 14, the company announced the completion of a $15 million investment in Dastgyr, a Pakistan-based B2B e-commerce marketplace platform, by its VEON Ventures division. This investment should help VEON develop a digital ecosystem that delivers a growing range of services to its customers.
In the same month, the company announced the completion of a sale agreement for VEON Georgia LLC, VEON’s operating subsidiary in Georgia, for a valuation of $45 million. This transaction is expected to streamline the company’s group operations.
VEON’s total operating revenue increased 7.5% year-over-year to ₽83.61 billion ($1.43 billion) in the fiscal quarter ended March 31, 2022. Its net cash flows from operating activities grew 58.5% from the year-ago value to ₽27.59 billion ($0.47 billion) .
Analysts expect VEON’s revenue for the fiscal year ending December 2022 to come in at $8.86 billion, indicating an increase of 13.8% year-over-year. Also, the company’s EPS is expected to grow 41.3% year-over-year to $0.39 in the same period.
VEON gained 3.2% intraday to close yesterday’s trading session at $0.44. Its 12-month median price target of $2.30 indicates a 422.7% potential upside.
VEON’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, translating to Strong Buy in our proprietary ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
VEON also has an A grade in Value and Quality. It is ranked #7 of 46 stocks in the A-rated Telecom – Foreign industry.
Beyond what is stated above, we’ve also rated VEON for Growth, Momentum, Sentiment, and Stability. Get all the VEON ratings here.
Xperi Holding Corporation (XPER)
XPER operates as a consumer and entertainment solutions licensing company worldwide. It operates through two segments, Intellectual Property Licensing; and Product.
On July 5, XPER announced the acquisition of Vewd Software Holdings Limited, an independent OTT software provider, for a valuation of $109 million. This should establish XPER as a leading independent streaming media platform through its TiVo brand and the largest independent provider of Smart TV middleware globally.
XPER’s revenue increased 16.2% year-over-year to $257.42 million in the fiscal quarter ended March 31, 2022. Its operating income grew 409.4% from the year-ago value to $52.97 million, while its net income improved by 429.7% year-over -year to $23.98 million. The company’s income per share came in at $0.24, up 380% year-over-year.
XPER’s revenue for the fiscal quarter ending December 2022 is expected to improve 6.6% year-over-year to $228.61 million. The consensus EPS estimate of $0.37 for the same quarter indicates an increase of 23.9% year-over-year. The company surpassed the consensus EPS estimates in three of the trailing four quarters.
XPER’s shares have gained 1.9% over the past month to close the last trading session at $14.89. Its 12-month median price target of $23.67 indicates a 59% potential upside.
The company has an overall rating of A, translating to Strong Buy in our proprietary ratings system. XPER is also rated A in Growth and a B in Quality. Within the B-rated Semiconductor & Wireless Chip industry, it is ranked #6 of 95 stocks.
Click here for additional POWR Ratings for Value, Stability, Momentum, and Sentiment for XPER.
ArcelorMittal SA (MT)
MT operates as an integrated steel and mining company in the Americas, Europe, Asia, and Africa.
On July 1, MT announced the acquisition of an 80% stake in voestalpine’s state-of-the-art Hot Briquetted Iron plant located near Corpus Christi, Texas. The transaction should enhance MT’s ability to produce high-quality input materials required for low-carbon emission steelmaking and reinforce the company’s position as a world leader in DRI production.
MT’s sales increased 34.8% year-over-year to $21.84 billion in the fiscal operating quarter of 2022. Its income improved 67.9% year-over-year to $4.43 billion over the period, while its net income and EPS increased 80.5% and 121.2 % from its year-ago values to $4.13 billion and $4.27, respectively.
Analysts expect MT’s EPS for the fiscal quarter ended June 2022 to come in at $4.14, indicating a 19.5% increase year-over-year. The consensus revenue estimate of $21.92 billion represents a year-over-year increase of 13.3% for the same period. MT also beat the consensus EPS estimates in all the trailing four quarters, which is impressive.
The stock has gained marginally intraday to close the last trading session at $22.19. Its 12-month median price target of $42.90 indicates a 93.3% potential upside.
It is no surprise that MT has an overall rating of A, equating to Strong Buy in our POWR Ratings system. The stock also has an A grade in Value and a B in Sentiment and Quality. Out of the 32 stocks in the A-rated Steel industry, MT is ranked #3.
In addition to the POWR Rating grades I’ve just highlighted, you can see MT’s Momentum, Growth, and Stability ratings here.
Millicom International Cellular SA (TIGO)
TIGO provides cable and mobile services in Latin America and Africa. It markets its products and services under Tigo and Tigo Business brands.
TIGO’s revenue increased 40.9% year-over-year to $1.41 billion in the fiscal first operating quarter of 2022. Its operating profit grew 126.3% from the year-ago value to $234 million, while its EBITDA increased 55.8% year-over-year to $564 million.
TIGO’s revenue is expected to grow 5.7% year-over-year to $6.12 billion in the fiscal year ending December 2023. Street expects its EPS to grow 95.4% year-over-year to $1.48 in the same period.
The stock has slumped 3.3% intraday to close the last trading session at $13.49. TIGO’s 12-month median price target of $20.65 indicates a 53.1% potential upside.
TIGO’s POWR Ratings reflects this promising outlook. The company has an overall rating of B, translating to Buy in our proprietary rating system.
TIGO is also rated B in Value, Growth, and Stability. The stock is ranked #9 in the Telecom – Foreign industry. To see additional POWR Ratings for Momentum, Quality, and Sentiment for TIGO, click here.
VEON shares were trading at $0.44 per share on Thursday morning, down $0.01 (-1.71%). Year-to-date, VEON has declined -74.27%, versus a -20.96% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal’s passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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