The Federal Reserve’s unrelenting fight against inflation over the past year has started to show results, with March’s CPI easing to 5% annually. However, concerns about a recession remain as the Fed looks to raise interest rates further to rein in inflation.
In this scenario, investors could consider buying Subaru Corporation (FUJHY), PT United Tractors Tbk (PUTKY), and Akbank T.A.S. (AKBTY), given their strong fundamentals, solid growth prospects, and discounted valuation.
Before diving deeper into the fundamentals of these stocks, let’s look at the factors currently affecting investor sentiments.
Following the recent bank failures, the Fed remains hawkish to curb inflation. Although prices have cooled considerably since last year, thanks to the aggressive interest rate hikes, inflation remains well above the Fed’s target of 2%.
Moreover, Federal Reserve policymakers have pencilled in an additional quarter-point hike for May this year, raising their benchmark rate to 5.1%. Bank of America CEO Brian Moynihan expects the U.S. economy to slide into a mild recession later this year as unemployment figures remain low and wage pressures ease.
Despite the uncertainties, the stocks mentioned above look poised for a bullish April. Additionally, April is usually considered the best month for stocks.
Subaru Corporation (FUJHY)
Headquartered in Tokyo, Japan, FUJHY manufactures and sells automobiles and aerospace products worldwide. It operates through three segments: Automotive, Aerospace, and Others.
In terms of forward P/E, FUJHY’s 7.17x is 50.2% lower than the 14.38x industry average. Its 0.18x forward EV/Sales is 83.5% lower than the 1.12x industry average. Likewise, its 2.28x forward EV/EBIT is 82.5% lower than the 13.06x industry average.
FUJHY’s revenue for the nine months ended December 31, 2022, increased 39.9% year-over-year to ¥2.81 trillion ($20.94 billion). The company’s gross profit increased 45% year-over-year to ¥552.11 billion ($4.11 billion).
Its profit for the period attributable to owners of the parent increased 145.6% year-over-year to ¥154.42 billion ($1.15 billion). Additionally, its EPS attributable to owners of parent came in at ¥201.34.
FUJHY’s revenue for the quarter that ended March 31, 2023, is expected to increase 21.2% year-over-year to $6.95 billion. Its EPS for fiscal 2023 is expected to increase 207% year-over-year to $1.09. Over the past year, the stock has gained 10.4% to close the last trading session at $7.83.
FUJHY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Within the Auto & Vehicle Manufacturers industry, it is ranked #4 out of 58 stocks. It has an A grade for Growth and Value and a B for Momentum, Stability, and Quality. We have also given FUJHY grades for Sentiment. Get all FUJHY ratings here.
PT United Tractors Tbk (PUTKY)
Headquartered in Jakarta Timur, Indonesia, PUTKY sells and rents heavy equipment. The company operates through six segments: Construction Machinery, Mining Contracting, Coal Mining, Gold Mining, Construction Industry, and Energy.
On March 21st, 2023, PUTKY collaborated with Tribun Network and BKKBN in a stunting prevention program. Through this program, PUTKY hopes to increase public awareness in Indonesia of the importance of preventing stunting and is committed to delivering genuine societal benefits through implementing the Social Responsibility in Health program.
This is a form of ESG (Environmental, Social, and Governance) implementation in the company that could attract investors and give PUTKY a competitive advantage.
In terms of forward EV/Sales, PUTKY’s 0.75x is 59.6% lower than the 1.85x industry average. Its 3.67x forward EV/EBIT is 54.6% lower than the industry average of 8.10x. Likewise, its 1.02x forward Price/Sales is 21.7% lower than the 1.31x industry average.
PUTKY’s net revenue increased 24.7% year-over-year to Rp34.89 trillion ($2.35 billion) for the first quarter that ended March 31, 2023. The company’s gross profit increased 23.2% year-over-year to Rp8.67 trillion ($582.90 million).
Its profit for the periods increased 24.3% year-over-year to Rp5.86 trillion ($394.08 million), while its EPS came in at Rp1,466, representing a 26.6% increase from the prior-year quarter.
Over the past three months, the stock has gained 28.4% to close the last trading session at $42.45.
It is no surprise that PUTKY has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
Within the A-rated Industrial - Services industry, it is ranked #4 out of 78 stocks. The stock has an A grade for Quality and a B for Growth, Value, Momentum, and Stability. In total, we rate PUTKY on eight different levels. Beyond what we stated above, we have also given PUTKY a grade for Sentiment. Click here to access all the ratings.
Akbank T.A.S. (AKBTY)
Headquartered in Istanbul, Turkey, AKBTY provides various banking products and services worldwide. It operates through: Retail Banking; Commercial Banking, SME Banking, Corporate-Investment and Private Banking; and Treasury segments.
In terms of trailing-12-month GAAP P/E, AKBTY’s 1.50x is 84.2% lower than the 9.48x industry average. Likewise, its 0.99x forward Price/Sales is 52.5% lower than the industry average of 2.09x.
AKBTY’s total assets for fiscal 2022 increased 50.4% year-over-year to TL1.15 trillion ($59.12 billion).
The company’s net interest income for the fourth quarter increased 32% sequentially to TL28.90 ($1.49 billion). Its revenue increased 38.7% from the third quarter to TL32.17 billion ($1.66 billion). Moreover, its net income increased 27.8% year-over-year to TL21.80 billion ($1.12 billion).
AKBTY’s revenue for fiscal 2024, is expected to increase 11.1% year-over-year to $5.40 billion. Over the past nine months, the stock has gained 83.9% to close the last trading session at $1.78.
AKBTY’s POWR Ratings reflect its positive outlook. It has an overall rating of B, which equates to a Buy.
It is ranked #17 out of 95 stocks in the Foreign Banks industry. In addition, it has a B grade for Growth, Value, Momentum, Stability, and Sentiment. Click here to see AKBTY’s rating for Quality.
Consider This Before Placing Your Next Trade…
We are still in the midst of a bear market.
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FUJHY shares were unchanged in premarket trading Wednesday. Year-to-date, FUJHY has gained 3.57%, versus a 8.05% rise in the benchmark S&P 500 index during the same period.
About the Author: Malaika Alphonsus
Malaika's passion for writing and interest in financial markets led her to pursue a career in investment research. With a degree in Economics and Psychology, she intends to assist investors in making informed investment decisions.
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