The major benchmark stock indexes are witnessing significant volatility lately. While the market is in the green today on investors’ optimism looking at impressive quarterly reports from some U.S. banks, the consumer price index’s 8.5% year-over-year jump in March may not keep the enthusiasm alive for long.
With inflation hitting a fresh 40-year high and the Fed's plans to raise interest rates aggressively later this year, long-term investors might want to take advantage of the current market dip and invest in stocks that could provide them with exceptional returns.
High-conviction stocks ArcelorMittal S.A. (MT) and Ryerson Holding Corporation (RYI) could be wise bets now, given their solid growth prospects. These stocks also have an overall A rating, which equates to Strong Buy in our POWR Ratings system.
ArcelorMittal S.A. (MT)
MT operates as an integrated steel and mining company in Europe, North and South America, Asia, and Africa, together with its subsidiaries. Its principal steel products include semi-finished flat products, including slabs; finished flat products comprising plates, hot- and cold-rolled coils and sheets, hot-dipped and electro-galvanized coils and sheets, tinplate, and color coated coils and sheets.
MT's sales increased 46.7% year-over-year to $20.81 billion during the fourth quarter ending December 31, 2021. The operating income grew 128.1% from its year-ago value to $4.56 billion, while its net income amounted to $4.05 billion, up 235.1% from its prior-year quarter. The company's EPS rose 292% year-over-year to $3.92.
The consensus EPS estimate of $3.31 during the first quarter ending March 2022 represents year-over-year growth of 71.2%. Analysts expect MT's revenue to increase 29.1% year-over-year to $20.91 billion during the first quarter ending March 2022. In addition, the company has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in all of the trailing four quarters.
The stock has gained 8% over the past year and 4.9% over the past month.
MT's POWR Ratings reflect this promising outlook. The company has an overall A rating, which translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
MT is also rated an A for Value and Momentum and a B for Quality. Within the A-rated Steel industry, it is ranked #3 of 34 stocks.
To see additional POWR Ratings for Growth, Stability, and Sentiment for MT, click here.
Ryerson Holding Corporation (RYI)
RYI processes and distributes industrial metals in the United States, Canada, Mexico, and China. It offers a line of products in carbon steel, stainless steel, alloy steels, aluminum, nickel, and red metals in various shapes and forms, including coils, sheets, rounds, hexagons, square and flat bars, and plates, structural, and tubing.
For the fourth quarter ending December 31, 2021, RYI's revenue increased 79.8% year-over-year to $1.53 billion. Its operating profit grew 2989.6% from its year-ago value to $148.3 million. Its net income amounted to $106.4 million compared to a net loss of $16.7 million in the previous-year quarter. The company's EPS came in at $2.71 compared to a loss per share of $0.44 in the prior-year quarter.
The consensus EPS estimate of $3.95 during the first quarter ending March 2022 represents a 1419.2% improvement year-over-year. In addition, the company has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in three of the trailing four quarters.
The stock has surged 125.8% over the past year and 148.6% over the past nine months.
RYI's POWR Ratings reflect this promising outlook. The company has an overall rating of A, translating to Strong Buy in our proprietary rating system. RYI is also rated an A for Growth and Momentum and a B for Value. Within the Industrial –Metals industry, it is ranked #2 of 37 stocks.
Click here to see additional POWR Ratings for Stability, Sentiment, and Quality for RYI.
MT shares were trading at $32.72 per share on Wednesday afternoon, up $1.45 (+4.64%). Year-to-date, MT has gained 2.80%, versus a -6.36% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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