With the consumer price index coming in below expectations for October, markets widely expect the Fed to slow down its pace of interest rate hikes from 0.75 percentage points to 0.5 percentage points in December. Although many reaffirm hopes of a soft landing, BlackRock’s top strategists disagree and remain underweight developed market stocks.
Moreover, Fed Governor Chris Waller said that markets had overestimated the significance of a single data point and that the U.S. central bank still has “a ways to go” on interest rate hikes.
However, on the other hand, Wharton professor Jeremy Siegel expects 2023 to be a strong year with the stock market poised to surge. According to him, 90% of inflation is gone, and as soon as the Fed understands this, the market will experience a big increase in stock prices.
Given the economic uncertainties, it could be wise for investors to buy fundamentally solid stocks, Bristol-Myers Squibb Company (BMY), Biogen Inc. (BIIB), and Spok Holdings, Inc. (SPOK) now.
Bristol-Myers Squibb Company (BMY)
BMY engages in discovering, developing, licensing, manufacturing, and selling biopharmaceutical products globally. The company’s offerings include products for hematology, oncology, cardiovascular, immunology, fibrotic, neuroscience, and COVID-19 diseases.
On November 10, BMY announced that Health Canada approved CAMZYOS™ (mavacamten capsules) for treating adults with Symptomatic Obstructive Hypertrophic Cardiomyopathy (oHCM).
CAMZYOS™ is the first Canadian-approved allosteric and selective cardiac myosin inhibitor that targets the underlying pathophysiology of oHCM. This should help the company provide a new treatment option to patients and thus expand its revenue stream.
On November 1, BMY paid its quarterly dividend of $0.54 per share. The company pays a $2.16 per share dividend annually, which yields 2.74%. It has a record of six consecutive years of dividend growth.
In the fiscal third quarter ended September 30, BMY’s EBIT increased 2.4% year-over-year to $2.21 billion. The company’s net earnings amounted to $1.61 billion, up 3.6% year-over-year, while the non-GAAP EPS improved 3.1% from the prior-year quarter to $1.99.
Analysts expect BMY’s EPS for the fiscal second quarter ending June 2023 to be $2.07, indicating a 7.4% year-over-year growth. The company’s revenue is expected to increase by 1% from the prior year to $12 billion in the same period. The company has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past year, BMY has gained 38.3% to close its last trading session at $78.86. The stock has gained 26.5% year-to-date.
BMY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by accounting for 118 distinct factors, with each factor weighted to an optimal degree.
The stock also has an A grade for Value and a B for Stability, Sentiment, and Quality. It is ranked #3 of 162 stocks in the Medical – Pharmaceuticals industry.
Beyond what we’ve stated above, we have also given BMY grades for Growth and Momentum. Get all BMY ratings here.
Biogen Inc. (BIIB)
BIIB, a biotech company, discovers, manufactures, and delivers therapies for treating neurological and neurodegenerative diseases. The company has strategic collaborations and license agreements with various companies, including Acorda Therapeutics, Inc.; Alkermes Pharma Ireland Limited; and Denali Therapeutics Inc.
During the fiscal third quarter ended September 30, 2022, BIIB’s total revenue came in at $2.51 billion. The company’s net income increased 256.8% from the year-ago value to $1.13 billion, while its EPS grew 253.2% from the prior-year quarter to $7.84. Moreover, its net cash provided by investing activities grew 815.8% year-over-year to $1.67 million.
BIIB’s EPS is expected to grow to 3% in the fiscal quarter ending December 2022 to $3.49. Its revenue is expected to be $2.44 billion in the same quarter. The stock also surpassed the consensus EPS estimates in three of the trailing four quarters, which is impressive.
The stock has gained 53.6% over the past six months and 27.8% year-to-date to close the last trading session at 306.56.
It is no surprise that BIIB has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock also has an A grade for Value and Quality and a B for Sentiment. Out of the 379 stocks in the Biotech industry, BIIB is ranked #9.
To see additional POWR Ratings for Growth, Momentum, and Stability for BIIB, click here.
Spok Holdings, Inc. (SPOK)
SPOK provides healthcare communication solutions in the United States, Europe, Canada, Australia, Asia, and the Middle East. It delivers clinical information to care teams. The company also offers subscriptions to one-way or two-way messaging and ancillary services and sells devices to resellers who lease or resell them to their subscribers.
On October 26, SPOK declared a quarterly dividend of $0.31, payable to its shareholders on December 9, 2022. The company’s $1.25 annual dividend yields 15.30% at its current share price. Over the last three years, SPOK’s dividend payouts have grown at a 35.7% CAGR and a 10.8% CAGR over the last five years.
SPOK’s total revenue came in at $33.74 million for the third quarter that ended September 30, 2022. Its operating income came in at $3.54 million, compared to a loss of $3.56 million in the year-ago period. Moreover, its net income came in at $2.92 million, compared to a loss of $2.49 million in the previous period.
Street expects SPOK’s revenue and EPS to come in at $32.50 million and $0.07, respectively, for the quarter ending December 2022. Over the past six months, the stock has gained 11.3% to close the last trading session at $8.17.
SPOK’s overall A rating equates to a Strong Buy in our proprietary rating system. It also has an A grade for Growth and a B for Sentiment and Quality.
Within the Telecom – Domestic industry, it is ranked first among 19 stocks. Click here for the additional POWR Ratings for Value, Momentum, and Stability for SPOK.
BMY shares were trading at $79.07 per share on Wednesday afternoon, up $0.21 (+0.27%). Year-to-date, BMY has gained 30.76%, versus a -14.30% 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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