Increasing concerns about inflation, supply chain constraints, a weak job figure for November, the Federal Reserve’s hawkish monetary policy, and the emergence of highly transmissible omicron coronavirus variants resulted in a market sell-off last Friday.
Although major indexes rebounded earlier this week, these factors could keep the markets under pressure in the near term. However, the U.S. Labor Department announced today that jobless claims for last week were the lowest since 1969. This, combined with falling energy prices and efforts to ease supply chain bottlenecks, should enable the markets to recover.
As a result, it is wise to bet on fundamentally-sound stocks Wipro Limited (WIT), ICL Group Ltd (ICL), Information Services Group, Inc. (III), and Radiant Logistics, Inc. (RLGT), that are each currently trading below $10. These companies have the potential to cash in on their industry tailwinds in the near term.
Wipro Limited (WIT)
Headquartered in Bengaluru, India, WIT operates as an information technology (IT), consulting, and business process services company worldwide. The company operates through IT Services; IT Products; and India State Run Enterprise Services (ISRE). It serves government, defense, IT and IT-enabled services, telecommunications, healthcare, manufacturing, retail, transportation, energy, utilities, education, and financial services sectors, primarily in the Indian market.
On December 6, 2021, WIT and Celonis, a German-based data processing company, launched the Supply Chain Command Center to help organizations drive supply-chain transformation. The solution enables companies to automatically identify and fix process bottlenecks and inefficiencies, gain powerful business insights, manage risks and maintain business continuity. Both the companies are looking forward to accelerating supply chain transformation through data-driven business execution.
For its fiscal second quarter, ended September 30, 2021, WIT’s revenues increased 30.1% year-over-year to $2.65 billion. The company’s gross profit came in at $797 million, indicating a 29.2% rise from the prior-year period. Its income from operations came in at $470 million for the quarter, representing a 24.1% year-over-year improvement. WIT’s net profit came in at $394 million, up 18% from the year-ago period. Its EPS increased 23.8% year-over-year to $0.07. The company had $1.92 billion in cash and cash equivalents as of September 30, 2021.
Analysts expect the stock’s EPS to increase 15.4% year-over-year to $0.30 in the current year. The consensus revenue estimate of $10.42 billion for the current year represents a 24.8% rise from the prior-year period. In addition, it surpassed Street EPS estimates in each of the trailing four quarters. WIT’s EPS is expected to grow at a rate of 9% per annum over the next five years. The stock has gained 54.3% year-to-date and closed yesterday’s trading session at $8.76.
WIT’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has a B grade for Momentum, Stability, Sentiment, and Quality. Click here to see the additional ratings for WIT’s Growth and Value. Of the 11 stocks in the A-rated Outsourcing - Tech Services industry, WIT is ranked #5.
ICL Group Ltd (ICL)
Headquartered in Tel Aviv, Israel, ICL produces and markets fertilizers, specialty minerals, and chemicals worldwide. The company operates through four segments: Industrial Products; Potash; Phosphate Solutions; and Innovative Ag Solutions. It sells its products through marketing companies, agents, and distributors.
On December 3, 2021, the North York Moors Park Authority Planning Committee approved ICL’s Boulby Mine’s application to continue polyhalite, multi-nutrient organic fertilizer, and salt production for an additional 25 years, which starts in 2023 when the current planning permission expires. This enables ICL to continue its role as the world’s first and only polyhalite producer and help meet its food needs across the continents.
For its fiscal first quarter, ended September 30, 2021, ICL’s sales increased 48.7% year-over-year to $1.79 billion. The company’s gross profit came in at $689 million, up 88.8% from the prior-year period. Its adjusted operating income came in at $315 million for the quarter, up 197.2% from the prior-year period. Its adjusted net income of $215 million represents a 270.7% rise from the prior-year period. Its EPS increased 325% year-over-year to $0.17. ICL had $301 million in cash and equivalents as of September 30, 2021.
The consensus EPS estimate of $0.54 for the current year represents a 170.8% rise from the prior-year period. Analysts expect ICL’s revenue to improve 33.1% year-over-year to $6.71 billion for the current year. It surpassed the consensus EPS estimates in each of the trailing four quarters. Its EPS is expected to grow at a 3.9% rate per annum over the next five years. The stock has gained 90.9% year-to-date and ended yesterday’s trading session at $9.64.
It is no surprise that ICL has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock has a B grade for Momentum, Growth, Stability, Sentiment, and Quality. Click here to see the additional ratings for ICL’s Value.
ICL is ranked #3 of 90 stocks in the A-rated Chemicals industry.
Information Services Group, Inc. (III)
III is a technology research and advisory firm specializing in digital transformation services, sourcing advisory, managed governance and risk, network carrier, technology strategy, operations design, and market intelligence and technology research and analysis services worldwide.
III’s revenues for its fiscal third quarter, ended September 30, 2021, increased 15.3% year-over-year to $71.10 million. The company’s operating income came in at $7.26 million, up 144.2% from the prior-year period. Its adjusted net income came in at $5.95 million for the quarter, representing a 14.1% year-over-year improvement. Its adjusted EPS increased 20% year-over-year to $0.12. The company had $54.50 million in cash and cash equivalents as of September 30, 2021.
Analysts expect the stock’s EPS to grow 53.6% year-over-year to $0.43 in the current year. The consensus revenue estimate of $276.22 million for the current year represents a 10.9% rise from the prior-year period. In addition, it surpassed Street EPS estimates in each of the trailing four quarters. Analysts expect the stock’s EPS to grow at a rate of 16% per annum over the next five years. The stock has gained 145.4% year-to-date and closed yesterday’s trading session at $8.05.
III’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. The stock has an A grade for Sentiment and a B grade for Growth, Value, and Quality. Click here to see the additional ratings for III (Stability and Momentum).
III is ranked #1 of 5 stocks in the A-rated Outsourcing - Management Services industry.
Radiant Logistics, Inc. (RLGT)
RLGT is a third-party logistics company that primarily provides multi-modal transportation and logistics services in the United States and Canada. The company offers domestic and international air and ocean freight forwarding services, freight brokerage services, and other value-added supply chain services. It serves consumer goods, food and beverage, manufacturing, and retail customers through a network of company-owned and strategic operating partner locations.
On December 6, 2021, RLGT acquired Navegate, Inc., a privately-held company that provides tech-enabled international and domestic logistics services, for $35 million and will operate as an RLGT’s wholly-owned subsidiary going forward. Navegate’s logistics services are delivered through RLGT’s proprietary global trade management software platform, including advanced purchase orders and vendor management tools. RLGT is looking forward to delivering a better customer experience.
RLGT’s total revenues for its fiscal first quarter, ended September 30, 2021, increased 62.7% year-over-year to $286.12 million. The company’s income from operations came in at $9.76 million for the quarter, up 103.9% from the prior-year period. While its adjusted net income increased 62% year-over-year to $10.56 million, its adjusted EPS increased 61.5% to $0.21. The company had $9.48 million in cash and cash equivalents as of September 30, 2021.
Analysts expect RLGT’s EPS to rise 6% year-over-year to $0.89 in the current year. The consensus revenue estimate of $1.07 billion for the current year represents a 20.5% rise from the prior-year period. It surpassed the consensus EPS estimates in three of the trailing four quarters. RLGT’s EPS is expected to grow at a rate of 24.6% per annum over the next five years. The stock has gained 31% year-to-date and ended yesterday’s trading session at $7.60.
RLGT’s POWR Ratings reflect its solid prospects. The stock has an overall B rating, which equates to Buy in our proprietary rating system. RLGT has an A grade for Growth and Sentiment. In addition to the POWR Ratings grades we have just highlighted, one can see the ratings for RLGT’s Value, Stability, Momentum, and Quality here.
RLGT is ranked #9 of 15 stocks in the A-rated Air Freight & Shipping Services industry.
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WIT shares were unchanged in after-hours trading Thursday. Year-to-date, WIT has gained 54.44%, versus a 25.95% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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