Despite the lingering macroeconomic concerns, the stock market is rallying, with the S&P 500 registering its best eight-week period earlier this month in more than a year and retracing almost 50% of its bear market loss. Slightly lower inflation in July, a red-hot job market, and better-than-expected corporate earnings have fueled the market’s momentum.

As per Refinitiv, earnings of S&P 500 companies are expected to have increased 9.7% year-over-year in the second quarter, much stronger than the 5.6% predicted.

Additionally, consumer sentiment has been improving, with the University of Michigan’s preliminary August reading on the overall index on consumer sentiment coming at 55.1, significantly higher than 51.5 in the prior month. “All components of the expectations index improved this month, particularly among low- and middle-income consumers for whom inflation is particularly salient,” said survey director Joanne Hsu.

Given the backdrop, we think investors could consider investing in fundamentally sound stocks, Good Times Restaurants Inc. (GTIM), Hill International, Inc. (HIL), TransGlobe Energy Corporation (TGA), and Overseas Shipholding Group, Inc. (OSG), which are currently trading under $5.

Good Times Restaurants Inc. (GTIM)

GTIM engages in the restaurant business in the United States. The company operates and franchises Good Times Burgers & Frozen Custard; and Bad Daddy’s Burger Bar.

The company completed the acquisition of a Bad Daddy’s restaurant in Greenville, South Carolina, earlier this year. “This acquisition expands our presence in the Greenville market to two company-owned restaurants,” Ryan Zink, President, and CEO, said.

GTIM’s total net revenues increased 7.5% year-over-year to $36.50 million in the fiscal quarter ended June 28, 2022.

GTIM’s shares have gained 11.2% over the past month to close the last trading session at $3.01.

Its strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, translating to 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.

GTIM also has an A grade in Value and a B in Growth, Momentum, Sentiment, and Quality. It is ranked #1 of 47 stocks in the A-rated Restaurants industry.

Beyond what is stated above, we’ve also rated GTIM for Stability. Get all the GTIM ratings here.

Hill International, Inc. (HIL)

HIL provides project and construction management and other consulting services primarily for buildings, transportation, environmental, energy, and industrial markets. 

On August 17, HIL and Global Infrastructure Solutions Inc. (GISI) announced a definitive agreement to merge the diversified construction management companies, setting the stage for increased competitiveness and accelerated global organic growth for-fee infrastructure consulting markets. This should be strategically beneficial for HIL.

For the fiscal quarter ended June 30, 2022, HIL’s total revenue came in at $ 105.73 million, up 4.1% year-over-year. Its gross profit was $37.43 million, up 19.6% year-over-year, while its EPS came in at $0.02, up 300% year-over-year. Also, its operating profit was $4.48 million in the same period.

HIL has gained 89.8% over the past three months to close the last trading session at $2.79. The stock gained 43.1% year-to-date.

It is no surprise that HIL has an overall A rating, which equates to Strong Buy in our proprietary rating system.

The stock has a B grade for Quality and Growth. HIL is ranked #4 out of the 89 stocks in the B-rated Industrial - Services industry.

Click here to see the additional POWR Ratings for HIL (Stability, Sentiment, Value, and Momentum).

TransGlobe Energy Corporation (TGA)

Headquartered in Calgary, Canada, TGA engages in acquiring, exploring, developing, and producing crude oil and natural gas in Egypt and Canada. 

TGA’s revenues increased 47.5% from the prior-year quarter to $74.69 million in the fiscal quarter ended June 30, 2022. Net earnings for the quarter came in at $32.13 million, reflecting an increase of 316.1% year-over-year, while the net earnings per share stood at $0.44, up 300% year-over-year.

The consensus EPS estimate of $1.23 for the fiscal year ending December 2022 represents a 348.8% improvement year-over-year. The consensus revenue estimate of $339.50 million for the same year represents a 100.9% increase year-over-year. It has an impressive earnings surprise history, as it topped Street EPS estimates in three of the trailing four quarters.

TGA’s shares have gained 112.3% over the past year to close the last trading session at $3.29.

TGA’s POWR Ratings reflect its promising outlook. The stock has an overall B rating, equating to Buy in our proprietary rating system.

The stock has an A grade in Value and Momentum and a B in Quality. Out of the 42 stocks in the A-rated  Foreign Oil & Gas industry, TGA is ranked #10.

Click here to get TGA’s Sentiment, Stability, and Growth ratings.

Overseas Shipholding Group, Inc. (OSG)

OSG owns and operates a fleet of oceangoing vessels engaged in transporting crude oil and petroleum products in the United States flag trade.

On June 13, OSG announced a repurchase program of up to 5 million shares of the company’s common stock with its excess cash. The company may purchase the shares from time to time in open market transactions or privately negotiated transactions. This should enhance shareholder returns.

For the fiscal quarter ended June 30, 2022, OSG’s shipping revenues increased 33.5% year-over-year to $117.99 million. Its operating income grew 318.6% from the year-ago value to $ 12.64 million. Net income for the quarter stood at $3.74 million, reflecting a 135% increase year-over-year.

The stock has gained 50.3% over the past six months to close the last trading session at $2.71. It gained 43.1% year-to-date.

The stock has an overall rating of A, translating to Strong Buy in our proprietary rating system. OSG also has an A grade in Momentum and a B in Sentiment and Quality. It is ranked #2 out of the 44 stocks in the A-rated Shipping industry.

Click here for additional POWR Ratings for Growth, Value, and Stability for OSG.

GTIM shares were trading at $3.35 per share on Thursday morning, up $0.34 (+11.30%). Year-to-date, GTIM has declined -22.81%, versus a -9.53% rise in the benchmark S&P 500 index during the same period.

Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.

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