The U.S. economy is on the path to recovery thanks to the current COVID-19 vaccine distribution, the recently passed huge federal recovery package, and the low-interest-rate environment. In anticipation of the recovery, investors are rotating away from the expensive pandemic gainers to potential post-pandemic winners that are trading at discounts. Hopes for a faster economic recovery are leading to increased market volatility, with the majority of the market-driving technology stocks experiencing a sell-off.
However, this correction may be short-lived because most of the pandemic gainers have strong business models, and several pandemic-driven trends are here to stay. So, now may be an opportune time to invest in high-potential large-cap stocks at reasonable prices.
Thanks to the broader market correction, shares of Eli Lilly and Company (LLY), Southern Copper Corporation (SCCO), and Darling Ingredients, Inc. (DAR) have lost some value lately. So, we think it could be wise to buy the dip in these stocks now to benefit from their strong fundamentals and time-proven business models.
Eli Lilly and Company (LLY)
LLY develops, manufactures, and markets pharmaceutical products. The company has worldwide operations. LLY has gained 50.6% over the past year to close Friday’s trading session at $184.29. However, the stock is down 8.3% over the past month.
LLY is currently collaborating with Welldoc to develop BlueStar app capabilities into connected insulin solutions. The company has partnered with Rigel to develop RIPK1 inhibitors for the treatment of immunological and neurodegenerative diseases.
For the quarter ended January 31, 2021, the company’s revenue increased 22% versus the same period last year. Its net income grew 42% over the same period.
LLY is expected to see a revenue growth of 21.4% for the quarter ended March 31, 2021 and 14.1% in 2021. Its EPS is estimated to grow 5.4% in 2021 and at a rate of 11.6% per annum over the next five years.
LLY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates 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.
It has a grade of B for Quality, Growth, Value, and Sentiment. In the Medical - Pharmaceuticals industry, it is ranked #5 of 239 stocks.
In total, we rate LLY on eight different levels. Beyond what we’ve stated above we have also given LLY grades for Momentum and Stability. Get all the LLY ratings here.
Click here to checkout our Healthcare Sector Report for 2021
Southern Copper Corporation (SCCO)
SCCO explores, mines, smelts, and refines copper and other minerals. The company has operations in Mexico, Chile, Ecuador, Argentina, and Peru.
SCCO’s revenue is estimated to increase 34.9% for the quarter ended March 31, 2021 and 12.7% in 2021. Its EPS is expected to rise 49.3% in 2021 and 7.3% per annum over the next five years.
SCCO recently achieved record production of copper, which topped 1 million tonnes. The company also saw record production of 21.5 million ounces of silver.
For the quarter ended December 31, 2020, the company’s net sales grew 26.7% compared to the same period last year. Its net income grew 93.1% during the same period.
SCCO’s stock has returned 183.9% over the past year but declined 9.2% over the past month to close Friday’s trading session at $72.14.
It’s no surprise that SCCO has an overall A rating, which equates to Strong Buy in our POWR Ratings system. SCCO has a B grade of B for Growth, Momentum, Quality, and Sentiment. In the Industrial - Metals industry, it is ranked #4 of 42 stocks.
Click here to see the additional POWR Ratings for SCCO (Value and Stability).
Darling Ingredients, Inc. (DAR)
DAR is involved in the production of natural ingredients from edible and inedible bio-nutrients. The company’s products find application in the food, pet food, pharmaceutical, and other sectors.
For the quarter ended December 31, 2020, the company’s net sales have grown 16.4% versus the same period last year. The company’s cash and cash equivalents grew 12.5% during the same period. DAR’s stock has returned 373.7% over the past year and its last closing price was $71.87. However, the stock lost 9.3% over the past week.
DAR recently started collaborating with the European ENLIGHT project to develop a living 3D model of the pancreatic tissue. It has recently released MSC-certified Marine collagen peptides.
DAR is expected to see a revenue growth of 18.2% for the quarter ended March 31st, 2021 and 11.9% in 2022. Its s EPS is estimated to grow 23.5% in 2021 and 11.8% for the quarter ended March 31, 2021.
DAR’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B, which equates to Buy in our proprietary ratings system. DAR has a B grade for Momentum, Sentiment, and Quality. In the B-rated Food Makers industry, it is ranked #14 of 82 stocks.
Beyond what we stated above we also have given DAR’s grades for Growth, Value, and Stability. Get all the DAR ratings here.
The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
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LLY shares were trading at $185.84 per share on Monday afternoon, up $1.55 (+0.84%). Year-to-date, LLY has gained 10.53%, versus a 4.99% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks.
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