Benchmarks rallied on Tuesday, supported by better-than-expected third-quarter earnings in the retail sector and impressive retail sales data. The The S&P 500 gained 0.53% to reach 4,707.90, close to its all-time high, while the Dow Jones gained 133 points. The S&P 500 has gained 25% so far this year.
However, Goldman Sachs Group Inc. (SG) analysts expect benchmarks to cool down at the end of this year, modest increase of 9% until the end of 2022 due to the deceleration in economic growth and the end of monetary support from the Fed. The record rally in stock market indices amid expectations of Fed policy tightening and inflation is raise concerns about market volatility. So, in this environment, we think it might be wise to bet on stocks that have gained momentum and have the potential to keep it going regardless of market conditions.
Investor interest in dynamic stocks is evidenced by the SPDR Russell 1000 Momentum Focus ETFs (ONÉO) 32.1% gains over the past year and 5.4% returns over the past month. Shares of Canadian Natural Resources Limited (CNQ), Signet Jewelers Limited (GIS) and Covenant Logistics Group, Inc. (CVLG) have gained significant momentum in recent times, which they have the potential to sustain, avoiding market volatility. So we think these stocks could be solid additions to his portfolio for the rest of the year.
Canadian Natural Resources Limited (CNQ)
CNQ acquires, develops, produces and markets crude oil, natural gas and natural gas liquids. The company offers synthetic crude oil, light and medium crude oil, and thermal oil. He is based in Calgary, Canada.
On November 9, CNQ announced that it had reached a definitive agreement with oil and gas exploration company Storm Resources Ltd. to acquire all of its outstanding common shares at a price of $ 6.28 per share. The acquisition is expected to provide CNQ with production capacity and infrastructure that complement the company’s existing assets.
On November 4, CNQ declared a quarterly dividend of CAD 0.5875 (approximately $ 0.47) per common share, payable on January 5, 2022. The distribution reflects CNQ’s ability to reimburse its shareholders.
For its fiscal third quarter, ended September 30, CNQ revenues increased 71.2% year-on-year to C $ 7.71 billion ($ 6.15 billion). Its net income improved 439.7% from a year ago quarter to C $ 2.20 billion ($ 1.76 billion), while its net income per common share increased by 431 , 4% compared to the same period last year at C $ 1.86.
The Street expects CNQ’s EPS to increase 13.6% year-on-year to $ 5.27 next year (FY2022). Likewise, $ 24.16 billion, the consensus estimate of revenue for the coming year, indicates a 4.5% increase over the current year.
The stock has gained 99.4% going over the past year and 73.7% year-to-date to close yesterday’s trading session at $ 41.78. It is currently trading above its 50-day and 200-day moving averages of $ 41.11 and $ 35.97, respectively.
CNQ’s strong fundamentals are reflected in its POWR odds. The stock has an overall rating of A, which equates to a strong buy in our proprietary rating system. POWR scores are calculated by considering 118 separate factors, each factor being weighted to an optimal degree.
CNQ has a Momentum rating of A and a Growth, Sentiment and Quality rating of B. In stock of 49 Foreign oil and gas industry, it is ranked # 5. The industry is rated A.
Click here to see additional POWR ratings for CNQ (value and stability).
Bookmark Jewelers Limited (GIS)
SIG, based in Hamilton, Bermuda, markets diamond jewelry, watches and other products. The company operates through segments of North America; International; and other. It has multiple locations in the United States, Canada, and the United Kingdom.
On October 12, SIG announced that it had reached an agreement to acquire US non-mall destination jeweler, Diamonds Direct USA Inc. Regarding the acquisition, Signet CEO Virginia Drosos said, “The accretive addition of Diamonds Direct to our portfolio generate shareholder value with its distinct bride-focused buying experience and add a new entry point as we build lifelong customer relationships and strive to achieve our goal of revenue of $ 9 billion over time.
In August, the company announced two financial milestones. First, SIG renegotiated its $ 1.5 billion asset lending facility in an effort to increase its financial flexibility. Second, the company entered into long-term debt purchase contracts, which were to eliminate its consumer credit risk.
SIG’s sales increased 101.4% year-on-year to $ 1.79 billion in its fiscal second quarter ended July 31. Gross margin rose 220.2% from the same period last year to $ 717.60 million. Its total non-GAAP operating income and non-GAAP EPS were $ 223 million and $ 3.57, respectively, up significantly from their negative values a year ago.
A consensus EPS estimate of $ 10.16 for the current year (fiscal year ending January 2022) indicates a 381.3% year-over-year increase. Likewise, the consensus estimate of revenue of $ 7.15 billion for the current year reflects a 36.7% improvement over the previous year. In addition, SIG has an impressive history of surprise earnings; it has beaten consensus EPS estimates in each of the past four quarters.
SIG stock has gained 291.9% in the past year to close yesterday’s trading session at $ 105.03. It has gained 285.2% since the start of the year. The stock is currently trading above its 50-day moving average of $ 91.70 and its 200-day moving average of $ 75.88.
It’s no surprise that SIG has an overall A rating, which translates into a strong buy in our POWR rating system. SIG has an A rating for growth, momentum and quality, and a B rating for value. It is ranked n ° 4 out of the 63 actions of the Fashion & Luxury industry. The industry is rated A.
To see additional POWR ratings for stability and sentiment for SIG, Click here.
Covenant Logistics Group, Inc. (CVLG)
CVLG is a transportation and logistics service provider in the United States that operates through Expedited; Dedicated; Managed freight; and warehousing segments. The Chattanooga, Tennessee-based company primarily serves transportation companies and traditional truckload customers.
On September 9, CVLG announced the results of its Dutch auction takeover bid. It announced the purchase of 86,132 Class A common shares of the company at a final purchase price of $ 23.00 per share, which could improve its capital allocation.
For the fiscal third quarter, ended September 30, CVLG’s total revenue increased 30.2% year-over-year to $ 274.56 million. Its adjusted operating profit increased 58.4% from the previous year quarter to $ 21.24 million. And its adjusted net income and adjusted EPS were $ 17.27 million and $ 1.02, respectively, up 79.1% and 82.1% from the same period last year.
Analysts expect CVLG’s EPS to improve 72.1% year-on-year to $ 1.05 in the current quarter (end of December 2021). The Street expects its revenue to increase 24.2% from the previous year quarter to $ 279.73 million.
The stock has gained 77.8% of its price over the past year and 105.5% year-to-date to close yesterday’s trading session at $ 30.44. CVLG is currently trading above its 50-day and 200-day moving averages of $ 29.44 and $ 24.02 respectively.
CVLG’s POWR ratings reflect this promising outlook. The stock has an overall A rating which equates to a strong buy in our proprietary rating system.
CVLG has a B grade for growth, value, momentum and quality. It is ranked n ° 2 out of 22 stocks in the Truck freight industry. The industry is rated A.
In addition to the POWR ratings we have shown above, we can see the CVLG ratings for stability and feeling. here.
CNQ shares were trading at $ 41.29 per share on Wednesday afternoon, down $ 0.49 (-1.17%). Year-to-date, CNQ has gained 73.51%, compared to a 26.48% increase in the benchmark S&P 500 over the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. Following…