Stocks finished higher last week, with the three major indexes posting weekly gains of around 2% to 3%, rebounding from declines of roughly 3% the previous week. After a solid start to the year, volatility seems to have returned to the market. Despite moving higher last week, the S&P 500’s year-to-date return has gone from 9.0% earlier in the year to around 4.5% now, about a 5% correction from recent highs.
Next week, the US labor market will be in the spotlight with the latest Job Openings and Labor Turnover Survey (JOLTS) report scheduled for Wednesday, along with ADP’s National Employment Report tracking private sector payrolls. February’s nonfarm payrolls report, slated for release on Friday, will likely be the week’s most closely watched economic report. The release follows a report that showed that the US economy generated 517,000 new jobs in January—far more than expected and the most since last July. The unemployment rate also slipped to 3.4%, the lowest since 1969.
Concerns about inflation and further interest-rate hikes will likely continue to impact investor sentiment in the coming weeks. The first stock recommendation on our list is a recession-resistant name currently trading at a discount compared to peers, but it may not be much longer.
Bunge (BG)
No matter what’s going on with the economy, civilizations need access to sustenance. Bunge Limited is an agribusiness and food company headquartered in Missouri, USA. In its Q4 earnings report (published in February 2022), the company announced revenue growth of over 32%.
Bargain hunters will appreciate the value proposition that Bunge brings to the table—currently, the market prices BG at a trailing multiple of 9.06. As a discount to earnings, Bunge ranks better than 76.36% of the competition. Further, BG trades at 8.04 times forward earnings, which sits well below the industry median of 16.97 times. The stock also provides some decent passive income with a forward yield of 2.63%, backed by a 22.1% payout ratio, indicating a highly sustainable yield.
BG has a consensus strong buy rating and an average price target of $123, implying over 29% upside potential.
General Motors (GM)
Fundamentally, GM is firing on all cylinders. Most notably, the company made substantial investments in the electric vehicle space. Further, by electrifying marquee models such as the Hummer, GM can feed nostalgia with current-generation technologies. The automaker represents an attractive proposition for bargain hunters. Right now, the market prices GM at a forward multiple of 6.32. As a discount to earnings, General Motors ranks better than 84.18% of its competition. Wall Street analysts peg GM as a consensus moderate buy with an average price target of $53.45, implying 38% upside potential.
UPS (UPS)
UPS stands to benefit from the current global supply chain disruptions, as the company’s expertise in logistics and supply chain management makes it well-positioned to navigate these challenges. As consumers increasingly turn to online shopping and same-day delivery options, UPS is poised to capitalize on these trends and continue its strong growth trajectory. With a 3.54% yield to sweeten the deal, it’s attractive to investors looking for stocks to hold long-term.
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and then