10 Solid Picks For A Rocky Market - Zen Investor

PUBLISHED Sep 12, 2022, 5:11:51 PM        SHARE

imgzen investor blog

Using the screening tools available in StockRover, I searched for companies that are inexpensive relative to their fair value (margin of safety) and have above-average price and earnings growth prospects.

Starting with a universe of 2,500 US listed names, I kept raising the bar until I whittled the list down to just ten finalists. All 10 have outperformed the S&P 500 over the past 5 years and they all have above-average ROIC compared to their industry peers.

The idea was to find high quality companies that can weather the market storm we are in today. If the market continues to decline from here, many of these stocks will also decline. But having a margin of safety and solid growth prospects should help these companies weather the storm better than most.

I begin with a brief description of each company, along with their StockRover profile. At the end of the article, I have a table that summarizes all of the metrics I used in the screening process for easy comparison.

AAP - Advance Auto Parts

Advance Auto Parts is one of the largest retailers of aftermarket automotive parts, tools, and accessories in North America. At today’s price of $172.15, it has a 12% margin of safety based on consensus fair value of $192.46. The average 12 month price target for AAP is $217.67, giving it a 26.4% upside. It pays a 3.5% dividend.

AAP profile

AMAT - Applied Materials

Applied Materials is the world's largest supplier of semiconductor manufacturing equipment. It has a 38% margin of safety and a 12 month upside target of 46.3%. It pays a 1.1% dividend.

AMAT profile

ARCB - ArcBest

ArcBest Corp is engaged in freight transportation and logistics operations. It has a margin of safety of 40% and a 12 month upside target of 56%. ARCB pays a 0.6% dividend.

ARCB profile

BLDR - Builders FirstSource

Builders FirstSource Inc. is a manufacturer and supplier of building materials. It has a 44% margin of safety and a 56% upside target. This company does not pay a dividend.

BLDR profile

DQ - Daqo New Energy

Daqo New Energy Corp is a polysilicon manufacturer based in China. At today’s price of $68.28, it has a 35% margin of safety based on consensus fair value of $92.29. The average 12 month price target for DQ is $76.98, giving it a 12.7% upside. The company does not pay a dividend.

DQ profile

MLI - Mueller Industries

Mueller Industries makes copper, brass, aluminum, and plastic products. It has a margin of safety of 18% and a 12 month upside target of 98%. It pays a 1.6% dividend.

MLI profile

MRO - Marathon Oil

Marathon Oil is an independent exploration and production company primarily focusing on unconventional resources in the United States. It has a 23% margin of safety and a 12 month upside target of 18%. It pays a 1.3% dividend.

MRO profile

MSFT - Microsoft

Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. It is the second largest company in the US, after Apple, Inc. It has a 11% margin of safety and a 27% 12 month upside target. It pays a 1% dividend.

MSFT profile

VLO - Valero Energy

Valero Energy is one of the largest independent refiners in the United States. It has a 31% margin of safety, and a 30% upside price target. It pays a 3.5% dividend.

VLO profile

WFG - West Fraser Timber

West Fraser Timber produces lumber, engineered wood products (plywood, and particleboard), pulp, newsprint, wood chips, and renewable energy. It has a 30% margin of safety and a 55% upside target. It pays a 1.4% dividend.

WFG profile

Summary table showing the key metrics for each of these ten stocks.

9-2 key metrics table

As always, do your own research before making any trading decisions. Treat this as a watchlist rather than a blanket endorsement.

Originally Posted on zeninvestor.org

AAP, Buy

Advance Auto Par...
Return: -72.27%

AAP, Buy

Return: -72.27%

Sound investments
don't happen alone

Find your crew, build teams, compete in VS MODE, and identify investment trends in our evergrowing investment ecosystem. You aren't on an island anymore, and our community is here to help you make informed decisions in a complex world.

More Reads
Another failed rally

A quick glance at the chart below tells the story. The rally-sellers dominated the action in January, February, April, June, and August. The dip-buyers tried to take back control in March, May, and July. They nearly succeeded in the two months from June 16 to August 16 by taking the market up 17.4%. It has all been downhill since then.

September 2022 Stock Considerations

With the start of a new trading month, it is time, once again, for me to highlight some of my potential stock buys for September. With all the recent market volatility there is no shortage of stocks that are looking seemingly cheaper when compared to the closing months of 2021.

A Dichotomy

Market Commentary

US CPI in Focus

The US dollar rally is of historic proportions. Its climb is relentless, though there was around a 4-7% pullback for a few weeks beginning in mid-July. Since then, the greenback has made up for lost time and appreciated to multiyear highs against most of the major currencies.

Monthly Dividend Stock In Focus: Prospect Capital

Business Development Companies — or BDCs, for short — allow investors to generate income with the potential for robust total returns while minimizing the amount of tax that is paid at the corporate level.

The 5 Best Cheap Stocks To Buy Now

Everyone loves to buy something on sale. For investors, that means finding undervalued stocks. Although available during bull markets, investors usually find more cheap stocks during bear markets. Prices drop, sometimes falling too far, making some stocks a deal, like in 2022. Hence, now is a good time for investors to scour lists and find the best cheap stocks to buy.

CLIMB USA Community Association

Join CLIMB USA for their CLIMB Community Association

Aussie Sells Off After RBA Hikes 50 bp while Sterling Bounces on UK New Initiative

Overview: A GBP130 bln initiative by the new UK government to protect households from the surge in power costs helped lift sterling from 2.5-year lows.

A Simple Plan To Pay Off Debt [Updated]

We all know how that day ended up. You were scared out of your mind before and during the ride, but after it was all over, you realized it wasn’t that bad.

Market Musing 9-6-2022, Market Volatility through the Midterms

High Volatility: VIX > 25. The Fed strikes Fear into the global markets.


Is The Market In Trouble ?

Market Commentary

How to Save for a House–5 Tips to Follow

Are you planning to buy a dream home? This is certainly a big decision for a family that demands a hefty investment.

Do great stocks go on sale during a down market?

Do great stocks go on sale during a down market? The short answer is: yes!

How to Double Your Returns by Actually Using Simple Strategies

They say the internet changed everything. Well, finally, that change has come to basic investing. It is now easy to double your returns from just a decade ago.

Dividend Stock Watch List: Lanny’s September 2022 Edition

Welcome back to another dividend stock watch list article! The stock market took a nose dive on August 26th, shedding over 3% in some instances on the overall valuation of the stock market.

3 Beaten-Down Dividend Growers for Income Investors

The bear market in 2022 has provided opportunities to buy solid companies at a discount. Fears about a recession and rising interest rates have punished equities.

Kilroy Realty (KRC): Undervalued REIT and 4.2% Yield

The markets had a wild ride down on Friday (8/26/2022). The SPDR S&P 500 ETF (SPY) saw a 14-point drop, about a 3.4% decline in a single trading day.

NextEra Energy Stock Dividend and Forecast

NextEra Energy Stock remained stable during the June lows and the growth in dividend is expected to grow annually by 10% through 2024.

The Layman’s Guide to Understanding Crypto PFP.

Find out what crypto pfps are, how they work, and why they are important for the future of digital identity.

Resources for Publishers
Resources for New Investors