The resurgence of COVID-19 cases due to the rapid spread of the virus’ highly contagious Delta variant has fueled severe stock market volatility. In addition, high inflation has been a concern for investors. The consumer price index increased 5.4% in June, and the International Monetary Fund (IMF) warned that inflation could be persistent.
The S&P 500 declined from a record high yesterday on a slowdown in job growth last month. Amid this scenario, momentum investing could help investors dodge short-term market volatility because stocks that have gained momentum will likely maintain it for some time irrespective of market conditions. Investors’ interest in momentum stocks is evident in the iShares MSCI USA Momentum Factor ETF’s (MTUM) 5.3% gains over the past three months.
Philip Morris International Inc. (PM), ArcelorMittal (MT), Norsk Hydro ASA (NHYDY), and Aperam S.A. (APEMY) have generated decent momentum over the past few months, which they are well-positioned to maintain. In addition, each of the stocks has an A grade for Momentum and an overall Strong Buy or Buy rating in our proprietary POWR Ratings system. So, it could be wise to scoop up these stocks now.
Philip Morris International Inc. (PM)
PM manufactures and sells cigarettes, other nicotine-containing products, smoke-free products, and related electronic devices and accessories. The company’s international and local brands portfolio includes Marlboro, Bond Street, Chesterfield, and Dji Sam Soe.
PM announced on July 9that it had agreed to acquire Vectura Group plc (VEC). The acquisition is expected to help accelerate PM’s beyond nicotine strategy and expands its product pipeline development capabilities in inhaled therapeutics space.
The company’s adjusted net revenue surged 17.9% year-over-year to $7.84 billion for the fiscal second quarter, ended June 30, 2021. Its adjusted operating income grew 23.3% year-over-year to $3.45 billion. And its adjusted EPS came in at $1.57, up 21.7% year-over-year.
Analysts expect PM’s EPS to be $6.10 in its fiscal year 2021, representing an 18% year-over-year increase. It surpassed the Street’s EPS estimates in each of the trailing four quarters. In addition, the company’s revenue is expected to increase 9% year-over-year to $8.12 billion for the quarter ending September 30, 2021. Over the past nine months, the stock has gained 39.1% to close yesterday’s trading session at $99.49. Also, it has gained 19% over the past six months.
PM’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting. It has an A grade for Momentum and Quality, and a B grade for Stability.
MT owns and operates steel manufacturing and mining facilities. The company's main steel products include semi-finished flat products, finished flat products, semi-finished long products, and seamless and welded pipes and tubes. Its mining products comprise iron ore lumps, fines, concentrates, pellets, and sinter feeds.
On July 29, MT announced a new, $2.2 billion, share buyback program. The shares acquired under the program are intended to meet the company’s obligations under debt obligations exchangeable into equity securities and to reduce its share capital.
The company’s sales surged 76.2% year-over-year to $19.34 billion for the second quarter ended June 30, 2021. MT’s EBITDA grew 614.6% year-over-year to $5.05 billion. Its net income came in at $4 billion, representing a 75.3% sequential increase. MT’s EPS was $3.47, up 78.9% sequentially.
Analysts expect MT’s EPS and revenue to increase 1,915.8% and 40.3% year-over-year to $3.45 and $18.61 billion, respectively, for the quarter ending September 30, 2021. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. The stock has gained 56.2% over the past six months and 13.7% over the past three months to close yesterday’s trading session at $34.34.
MT’s POWR Ratings reflect solid prospects. The company has an overall A rating, which translates to Strong Buy in our proprietary ratings system. In addition, it has an A grade for Growth, Value, and Momentum, and a B grade for Sentiment and Quality.
Note that MT is one of the few stocks handpicked currently in the Reitmeister Total Return portfolio. Learn more here.
Norsk Hydro ASA (NHYDY)
Based in Oslo, Norway, NHYDY is an integrated aluminum company that operates through six segments: Bauxite & Alumina; Aluminum Metal; Metal Markets; Rolling; Extrusions; and Energy.
On July 27, 2021, NHYDY announced plans to invest $48.3 million in Cressona, Pa., to support the growing transportation, distribution, and industrial market segments in North America. Mike Hammer, Senior Director of Operations for Hydro’s Cressona and North Liberty facilities, said, “We are very excited about the decision to continue investing in new assets at Cressona, and I am certain that our history of delivering strong results on past investments was a key factor.”
NHYDY’s revenue surged 36% year-over-year to kr34.56 billion ($3.92 billion) for its fiscal second quarter ended June 30, 2021. The company’s adjusted EBITDA grew 136.1% year-over-year to kr6.60 billion ($747.80 million). Its adjusted net income came in at kr3.15 billion ($357.01 million), representing an 890.6% year-over-year increase. Its adjusted EPS was kr1.45 ($0.16), up 752.9% year-over-year.
For its fiscal year 2021, analysts expect NHYDY’s EPS to be $0.58, representing a 360.1% year-over-year increase. In addition, the company’s revenue is expected to increase 12.8% year-over-year to $4.05 billion for the quarter ending September 30, 2021. The stock has gained 127.3% over the past nine months and 46.4% over the past six months to close yesterday’s trading session at $6.75.
NHYDY’s POWR Ratings reflect this promising outlook. The company has an overall A rating, which translates to Strong Buy in our proprietary ratings system.
The stock has an A grade for Growth and Momentum, and a B grade for Quality and Stability. Within the Industrial - Metals industry, NHYDY is ranked #3 of 39 stocks. To see the additional POWR Ratings for NHYDY (Value and Sentiment), click here.
Apreas S.A. (APEMY)
Headquartered in Luxembourg City, Luxembourg, APEMY, through its subsidiaries, produces and sells stainless and specialty steel products worldwide. It operates through three segments: Stainless & Electrical Steel; Services & Solutions; and Alloys & Specialties.
APEMY announced a strategic transaction in May 2021 to further strengthen its cost and ESG leadership position through the acquisition of Franz Haniel & Cie. Gmbh to acquire ELG. The acquisition is expected to place APEMY at the center of the circular economy to capture value in the global recycling industry.
APEMY’s sales surged 55.5% year-over-year to €1.27 billion ($1.51 billion) for its fiscal second quarter, ended June 30, 2021. The company’s adjusted EBITDA grew 434.7% year-over-year to €262 million ($310.62 million). Its net income came in at €213 million ($252.53 million), representing a 914.3% year-over-year increase. Its EPS was €2.66 ($3.15), up 885.2% year-over-year.
APEMY’s revenue is expected to increase 57.2% year-over-year to $1.55 billion for the quarter ending September 30, 2021. The stock has gained 35.3% over the past six months and 13.3% over the past month.
It’s no surprise that APEMY has an overall A rating, which equates to Strong Buy in our POWR Ratings system. In addition, the stock has an A grade for Momentum, and a B grade for Growth, Sentiment, and Quality.
Click here to see APEMY’s ratings for Stability and Value as well. APEMY is ranked #5 in the Steel industry.
PM shares were trading at $99.45 per share on Thursday morning, down $0.04 (-0.04%). Year-to-date, PM has gained 23.21%, versus a 18.70% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.Ride the Momentum of These 4 Top Stocks in August appeared first on StockNews.com