Rising inflation has prompted the Federal Reserve to raise the interest rates by 75 basis points yesterday for the second straight month. The expectation of further rate hikes in the upcoming months could lead to the economy tipping into a recession.
According to the U.S. Senator Elizabeth Warren, this year's fast and big interest rate increases by the Federal Reserve put the economy at risk of a recession and won't curb the hot inflation.
The International Monetary Fund has cut its global growth projections for 2022 and 2023, stating the outlook for the world economy is "gloomy and more uncertain." However, better-than-expected corporate earnings and a strong job market could support the market’s downtrend.
Nokia Oyj (NOK), Ambev S.A. (ABEV), and Lumen Technologies, Inc. (LUMN) have been some of the most active stocks on Wall Street lately with high trading volume. Considering their fundamental strength, it could be wise to invest in these stocks amid these uncertain times.
Nokia Oyj (NOK)
NOK provides mobile, fixed, and cloud network solutions worldwide. The company has four operating segments: Mobile Networks; Network Infrastructure; Cloud and Network Services; and Nokia Technologies. It offers products and services for radio access networks covering technologies from 2G to 5G and microwave radio links for transport networks. NOK has traded at an average trading volume of 32,929,639 over the past three months.
This month, NOK extended its partnership with Hill Air Force Base and the National Spectrum Consortium to ensure that incumbent radar and 5G networks can co-exist smoothly in a shared spectrum by controlling the behavior in real-time of the 5G system when the incumbent radar is present.
Last month, NOK announced an FTTH deal with all-fiber service provider Wire 3. The Florida-based operator is rolling out a 10Gb/second network along Florida’s Atlantic Coast, including Edgewater and New Smyrna Beach. The deal includes fiber access nodes for the central office, fiber modems for customer homes, service routers, Wi-Fi gateways, and Nokia’s Altiplano broadband network controller.
For the second quarter of fiscal 2022, NOK’s net sales increased 11% year-over-year to €5.87 billion ($5.96 billion). Its operating profit increased 17% year-over-year to €564.00 million ($572.58 million), while the profit grew 31% from its year-ago value to €460.00 million ($467.00 million). The company’s EPS amounted to €0.08, up 33% from its year-ago value.
The consensus EPS estimate of $0.10 for the third quarter ending September 2022 indicates an 8.1% improvement year-over-year. Analysts expect NOK’s revenue to increase 3.1% year-over-year to $5.79 billion for the first quarter ending March 2023. Moreover, it has an impressive earnings history, as it surpassed the consensus EPS estimate in all of the trailing four quarters.
The stock has gained 7.3% over the past month.
NOK’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock also has an A grade for Value and a B for Sentiment. Within the B-rated Technology - Communication/Networking industry, it is ranked #12 of 54 stocks
Click here to see additional POWR Ratings for Growth, Stability, Quality, and Momentum for NOK.
Ambev S.A. (ABEV)
Headquartered in São Paulo, Brazil, ABEV produces, distributes, and sells beer, draft beer, carbonated soft drinks, other non-alcoholic beverages, malt, and food products in the Americas. The company has four operating segments: Brazil; Central America and the Caribbean; Latin America South; and Canada. The stock has traded at an average volume of 34,561,862 over the past three months.
During the first quarter ending March 31, 2022, ABEV’s net revenue increased 10.8% year-over-year to R$16.64 billion ($3.13 billion). Its income from operations grew 4.3% from its year-ago value to R$4.16 billion ($782.13 million), while its profit improved 28.6% from its prior-year quarter to R$3.56 billion ($669.33 million). The company’s EPS rose 29.4% year-over-year to R$0.22.
The $0.06 consensus EPS estimate for the fourth quarter, ending December 2022, represents a 20.9% improvement year-over-year. Analysts expect its revenue to increase 2.8% year-over-year to $3.18 billion for the second quarter ending December 2022. The company’s shares have surged 1.1% year-to-date and 9.3% over the past month.
ABEV’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, equating to Buy in our POWR Ratings system. The stock also has a B for Quality. Within the A-rated Beverages industry, it is ranked #12 of 35 stocks.
In total, we rate ABEV on eight different levels. Beyond what we've stated above, we have also given ABEV grades for Stability, Sentiment, Growth, Value, and Momentum. Get all the ABEV ratings here.
Lumen Technologies, Inc. (LUMN)
Headquartered in Monroe, Louisiana, LUMN, a facilities-based technology, and communications company, offers various integrated products and services under the Lumen, Quantum Fiber, and CenturyLink brands to business and residential customers worldwide. The stock has traded at an average volume of 12,028,221 over the past three months.
This month, LUMN announced that it would invest in its global Edge network and augment its Edge Computing Solutions in Europe, offering the low latency platform businesses need to extend their high-bandwidth, data-intensive applications out to the cloud edge. This expansion is part of Lumen's continued investment in next-generation solutions that transform digital experiences and meet the demands of today's global businesses.
LUMN's net operating revenue amounted to $4.68 billion for the first quarter ending March 31, 2022. The operating income increased 10% year-over-year to $1.08 billion, while its net income stood at $599.00 million, up 26% from its prior-year quarter. The company's EPS rose 43% from its year-ago value to $0.63.
The stock has gained 5.6% over the past three months.
It is no surprise that LUMN has an overall B rating, equating to Buy in our POWR Ratings system. LUMN has an A grade for Value and a B for Quality. In the D-rated Telecom - Domestic industry, it is ranked #3 of 19 stocks
Click here to see the additional POWR Ratings for LUMN (Sentiment, Growth, Stability, and Momentum).
NOK shares were trading at $5.17 per share on Thursday afternoon, down $0.00 (0.00%). Year-to-date, NOK has declined -16.44%, versus a -13.83% 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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