Surging inflation and the rising oil and gas prices have dampened investor sentiment. After announcing its first-rate hike in more than three years recently, the Fed plans to raise interest rates more aggressively to control the multi-decade high inflation. Moreover, the sanctions on Russia may lead to a further increase in oil and gas prices. These factors may keep the stock market under pressure.
Betting on momentum stocks could be a good strategy during such volatile market conditions. Stocks with impressive momentum during times like these, often maintain their upwards inertia for some time. Investors’ interest in momentum stocks is evident from the Virtus Terranova U.S. Quality Momentum ETF’s (JOET) 15.9% returns over the past year.
That’s why today we're highlighting 4 exciting stocks from our Top 10 Momentum screen, which is just 1 of the 10 screens in our POWR Screens 10 service (more on that below). Eni S.p.A. (E), Alpha Metallurgical Resources, Inc. (AMR), Natural Resource Partners L.P. (NRP), and Grindrod Shipping Holdings Ltd. (GRIN) are attractive momentum stocks that deserve a place in your portfolio. In addition, these stocks are currently trading at discounts to their peers.
Eni S.p.A. (E)
Headquartered in Rome, Italy, E is engaged in the exploration, development, and production of hydrocarbons, in the supply and marketing of gas, liquefied natural gas (LNG) and power, in the refining and marketing of petroleum products, the production and marketing of basic petrochemicals, plastics, and elastomers and commodity trading. The company’s segments include Exploration & Production, Gas & Power, and Refining & Marketing.
On March 14, 2022, E announced that it had reached an agreement with Sixth Street to sell a 49% stake in Enipower, Italy’s second-largest electricity producer. E’s Chief Financial Officer, Francesco Gattei, said, “The deal is part of Eni’s strategy to enhance our assets and free up new resources for the energy transition.”
E’s adjusted operating profit increased 681% year-over-year to €3.80 billion ($4.17 billion) for the fourth quarter ended December 31, 2021. The company’s adjusted net profit increased 4,120% year-over-year to €2.11 billion ($2.31 billion). Also, the company’s net cash from operations increased 489.5% year-over-year to €5.82 billion ($6.39 billion). In addition, its total revenues increased 126.8% year-over-year to €27.07 billion ($29.73 billion).
In terms of forward EV/S and P/S, E’s 0.67x and 0.48x are lower than the industry averages of 2.37x and 1.65x, respectively. Moreover, its forward non-GAAP P/E of 4.80x is 54.4% lower than the industry average of 10.53x.
Analysts expect E’s EPS and revenue for fiscal 2022 to increase 109.6% and 25.5% year-over-year to $6.19 and $108.91, respectively. Over the past year, the stock has gained 23.4% to close the last trading session at $29.71. Its 50-day moving average of $29.93 is above its 200-day moving average of $27.13.
E’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has an A grade for Momentum and a B grade for Growth, Value, Sentiment, and Quality. It is ranked #3 out of 43 stocks in the A-rated Foreign Oil & Gas industry. Click here to see the rating of E for Stability.
Alpha Metallurgical Resources, Inc. (AMR)
AMR is a mining company with operations across Virginia and West Virginia. The company is principally engaged in supplying metallurgical products to the steel industry. It extracts, processes, and markets met and thermal coal from deep and surface mines for sale to steel and coke producers, industrial customers, and electric utilities. It operates in one reportable segment: Met.
On December 6, 2021, AMR announced the successful refinancing of its Asset-Based Revolving Credit Facility. The new $155 million facilities will mature in December 2024 and include $125 million committed availability for letters of credit and another $25 million uncommitted on a cash collateralized basis. AMR’s President and CFO, Andy Eidson, said, “Continuing our efforts to strengthen the company’s balance sheet, we are pleased to close on this refinancing, which amends and extends our ABL until December 2024.”
For the fiscal fourth quarter ended December 31, 2021, AMR’s total revenues increased 155.7% year-over-year to $828.21 million. The company’s net income came in at $257.44 million, compared to a net loss of $100.15 million in the year-ago period. Also, its adjusted EBITDA increased 4,167.5% year-over-year to $315.80 million.
In terms of forward EV/S and P/S, AMR’s 0.83x and 0.72x are lower than the industry averages of 1.74x and 1.46x, respectively. Moreover, its forward EV/EBITDA of 1.86x is 76.5% lower than the industry average of 7.95x.
For the quarter ending June 30, 2022, AMR’s EPS is expected to increase 1,836.9% year-over-year to $17.89. Its revenue for the quarter ending March 31, 2022, is expected to increase 173.4% year-over-year to $944.95 million. It surpassed Street EPS estimates in three of the trailing four quarters. Over the past year, the stock has gained 949.7% to close the last trading session at $132.06. The stock is trading 41.7% above its 50-day moving average of $93.14.
AMR’s POWR Ratings reflect solid prospects. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Growth and Momentum and a B grade for Value and Quality. Within the B-rated Industrial – Services industry, it is ranked #8 out of 89 stocks. To see the other ratings of AMR for Stability and Sentiment, click here.
Natural Resource Partners L.P. (NRP)
NRP is engaged in owning, managing, and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources. The company operates through the Coal Royalty and Other and Soda Ash segments.
On February 7, 2022, NRP announced the execution of a CO2 Sequestration Agreement with Denbury Carbon Solutions, LLC, for the evaluation and potential development of a permanent CO2 sequestration site located on Alabama’s Gulf Coast. NRP’s President and Chief Operating Officer, Craig Nunez, said, “We are very pleased to partner with Denbury on this world-class carbon sequestration project, which has the potential to provide important benefits to the environment and add significant value to NRP.”
NRP’s total revenues and other income increased 114.2% year-over-year to $83.90 million for the fourth quarter ended December 31, 2021. The company’s net income increased 278.8% year-over-year to $55.64 million. Also, its EPS came in at $2.42, representing an increase of 332.1% year-over-year. In addition, its adjusted EBITDA increased 168.2% year-over-year to $66.85 million.
In terms of trailing-12-month non-GAAP P/E and trailing-12-month EV/EBITDA, NRP’s 13.82x and 6.89x are lower than the industry averages of 14.48x and 10.06x, respectively.
Analysts expect NRP’s revenue for fiscal 2022 to increase 7.1% year-over-year to $208.10 million. Over the past year, the stock has gained 179.4% to close the last trading session at $43.59. The stock is trading 14.7% above its 50-day moving average of $38.
NRP’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.
It has an A grade for Momentum and a B grade for Growth, Sentiment, and Quality. It is ranked #2 out of 11 stocks in the A-rated MLPs – Other industry. Click here to see the other ratings of NRP for Value and Stability.
Grindrod Shipping Holdings Ltd. (GRIN)
GRIN is an international shipping company based in Singapore that owns, charters in, and operates a fleet of dry bulk carriers and tankers worldwide.
For the fiscal fourth quarter ended December 31, 2021, GRIN’s revenues increased 155.7% year-over-year to $142.45 million. The company’s adjusted EBITDA increased 667.9% year-over-year to $72.73 million. Also, the company’s adjusted net income came in at $54.49 million, compared to an adjusted net loss of $6.81 million in the year-ago period.
In terms of forward EV/EBITDA and EV/EBIT, GRIN’s 3.20x and 4.84x are lower than the industry averages of 11.10x and 15.99x, respectively. Moreover, its forward P/CF of 2.52x is 82.1% lower than the industry average of 14.14x.
Over the past year, the stock has gained 233.9% to close the last trading session at $23.54. The stock is trading 50% above its 200-day moving average of $15.70.
GRIN’s POWR Ratings reflect solid prospects. The stock has an overall B rating, equating to a Buy in our proprietary rating system.
It has an A grade for Momentum and Sentiment and a B grade for Value and Quality. Within the B-rated Shipping industry, it is ranked #3 out of 48 stocks. To see the other ratings of GRIN for Growth and Stability, click here.
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E shares were trading at $29.18 per share on Monday afternoon, down $0.53 (-1.78%). Year-to-date, E has gained 5.53%, versus a -4.08% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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