Today’s stocks to watch are MSFT, EXPE, and VEEV.
Although the bear market has been terrible, one benefit is the chance to buy high-quality stocks to watch at a discount. One technique to locate such stocks is to look for growth at a fair price (GARP). The top 3 GARP stocks for investors to think about are Microsoft (NASDAQ:MSFT), Expedia (NASDAQ:EXPE), and Veeva Systems (NYSE:VEEV).
As the S&P 500 retests its annual lows of roughly 3,600, the stock market climate keeps getting increasingly difficult. The Fed’s extreme hawkishness and the inflation that appears to be plateauing at these high levels make it difficult to present a bull case at this time. Additionally, there are growing signs that the economy as a whole is deteriorating and that an impending profits recession may be near.
In these difficult times, looking at growth at a reasonable price (GARP) stocks is a suitable course of action to take into consideration. This group consists of stocks that have maintained revenue and earnings growth in spite of adverse conditions and are currently trading at favorable multiples. Here are three of the top GARP stocks now trading on the market:
3 Stocks to Watch
Veeva Systems (NYSE:VEEV)
At the confluence of multiple bullish, growing tendencies lies VEEV. These include business software, cloud computing, medicines, and healthcare. Aging populations in industrialized nations around the world, more government spending, and the ongoing flow of inventions that result in novel therapies are all driving factors in the rise of the healthcare business. From 12% of GDP in 1990 to 18% in 2020, healthcare spending as a percentage has increased.
VEEV, on the other hand, is a software and cloud computing company with greater growth potential and larger profit margins. With high entrance hurdles and little competition, the software and cloud sectors differ from many stock markets. It results in high rates of recurring revenue for investors and a deep and wide moat.
The stock price of VEEV decreased by 56% from its high to its low. However, the company’s most recent report, which showed top- and bottom-line gains and better-than-expected forecasts, shows that the profits picture is still positive.
Given these advantages, it is understandable why VEEV has an overall B grade, which corresponds to a Buy in our POWR Rating system. It also receives an A for quality because it has one of the highest stock prices in a sizable total addressable market with few rivals.
The fact that VEEV also received a B for growth is understandable considering its double-digit earnings and revenue growth and location at the nexus of two sizable and expanding businesses, cloud computing and healthcare. Visit this page to view additional POWR Ratings from VEEV, including grades for Value, Momentum, and Stability.
Expedia Group Inc (NASDAQ:EXPE)
EXPE is among the biggest online travel agencies in the world. Expedia, Vrbo, Hotels.com, Orbitz, Travelocity, and Wotif are some of the categories through which it conducts business. Additionally, it provides a variety of verticals for the travel and non-travel industries, such as corporate travel management, airlines, travel agencies, online retailers, and financial institutions.
Due to the pent-up demand for travel, EXPE is experiencing a tremendous increase in revenues and reservations, similar to many other travel-related stocks. The market’s worries about a slowdown and possible recession have caused the stock price to stagnate, nevertheless. So, since reaching its record high in February of this year, EXPE’s stock has decreased by 57%. Even so, the stock’s earnings outlook is still favorable. The corporation is predicted by analysts to earn $7 per share this year, rising to $9 per share in 2023.
The stock is highly desirable because of its combination of growth and value. It’s a significant factor in EXPE’s grade of B, which is equivalent to a Buy recommendation. Each of the 118 different elements is given an ideal amount of weight for determining the POWR Ratings. Compared favorably to the S&P 500’s average annual return of 8.0%, B-rated equities have shown a positive yearly performance of 21.1%.
Microsoft Corporation (NASDAQ:MSFT)
Given MSFT’s dominance across numerous sectors, including PC software, enterprise software, and cloud computing, MSFT doesn’t require an introduction. Additionally, it has had the best ten-year performance of any stock in the S&P 500. The market sell-off and rate hike did, however, cause the stock to retrace some of its losses. Longer-term rates are retreating as inflation forecasts drop. For equities like MSFT, this is a motivating factor.
The positive outlook is reflected in the POWR Ratings for MSFT. According to our in-house grading system, MSFT stock gets an overall B grade, which is equivalent to Buy. MSFT stock’s leadership in numerous large markets, track record of growth, and execution have earned it a B for quality. MSFT also receives a B for Sentiment since 22 of the 23 analysts who cover the stock give it a Buy rating and have an average price objective of $363, which implies a 31% increase in value.
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