3 Momentum Stocks to Buy for Big Gains in 2023

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The Fed’s hawkish stance to curb stubbornly high inflation and recession fears is weighing on investor sentiment. Despite this market uncertainty, quality momentum stocks of Jabil (JBL), Overseas Shipholding Group (OSG) and Adams Resources & Energy (AE) could yield big gains in 2023. It looks like there is. read.

The stock market has witnessed violent volatility over the last year due to high inflation and the Federal Reserve’s monetary tightening. With volatility unlikely to drop any time soon, investors may want to invest in momentum stocks, Jabil Inc. (JBL), Overseas Shipholding Group, Inc. (OSG), and Adams Resources & Energy, Inc. (AEs), we could see a steady uptick in 2023, fueled by fundamentals.

The Federal Reserve’s hawkish remarks have raised new fears. San Francisco Fed President Mary Daly recently said, “To end this episode of high inflation, Further tightening of policies, may need to be maintained for a longer period of time. “

Sustained rate hikes like this could lead to a recession this year, as many pundits have warned. Former Treasury Secretary Larry Summers recently said, resilient dataAs a result, the likelihood of an economic recession increases. He said the Fed’s persistent interest rate hikes cause a recession.

According to the American Association of Individual Investors (AAII) survey for the week ended March 1, 2023: 44.8% of investors became bearishindicating an abnormally high level.

Against this backdrop, quality momentum stocks in JBL, OSG, and AE could be solid buys in 2023.

J Building Co., Ltd. (JBL)

JBL provides products and services for manufacturers worldwide. The company operates in his two large segments, Electronics Manufacturing Services and Diversified Manufacturing Services.

On March 6, 2023, JBL announced that its Photonics Business Unit is expanding its design, manufacturing and testing capabilities, leading to the launch of its new Active Optical Cable (AOC) family.

JBL is therefore uniquely positioned to keep up with the rapid advances in optical-enabled network and data center architectures, while supporting the continuous explosion of artificial intelligence (AI), cloud, high-performance computing (HPC), and machine learning (ML). is in the position of application.

New 800G AOC products meet the growing demand for low-cost, high-performance, short-reach interconnects. This should boost the company’s growth prospects.

On January 18, JBL, in collaboration with ams OSRAM and Artilux, its renowned optical design center in Jena, Germany, is now developing next-generation 3D cameras with the ability to work seamlessly in both indoor and outdoor environments. announced that it is demonstrating a prototype. Range up to 20 meters. The company continuously innovates and adds products.

JBL’s 12-month ROCE was 41.31%, 769% higher than the industry average of 4.75%. Last 12 months ROTC is 15.90%, 396% higher than the industry average of 3.21%.

JBL’s net sales were $9.64 billion in the first quarter (ending November 30, 2022), up 12.5% ​​year-over-year.this is gross profit $743 million, up 10.1% year-on-year. Core operating profit increased 15.3% year-over-year to $461 million.

Core earnings were $319 million, up 12.3% year-over-year, and core earnings per share were $2.31, up 20.3% year-over-year. The company also raised its full-year (fiscal 2023) core EPS forecast to $8.40.

Analysts expect JBL’s third quarter (ending May 2023) revenue to be $8.17 billion. The company’s EPS is estimated to be his $1.92 in the quarter, up 11.8% year over year. It has beaten EPS and earnings estimates in all of his last four quarters. This is impressive.

Over the past six months, the stock has gained 44.8% and closed its last trading session at $84.04. Moreover, he has risen by 19.1% in the last three months. The stock is currently trading above the 50-day and 200-day moving averages of $78.29 and $65.29 respectively, indicating an upward trend.

JBL’s POWR rating reflects this promising outlook. In our own rating system, it’s an overall B rating, equivalent to a purchase. POWR Ratings evaluate stocks by 118 different factors, each with its own weighting.

Momentum is A grade, Value, Sentiment and Quality are B grades.Within Technology – Service In the industry, it is ranked 9th out of 80 stocks.

To see additional POWR ratings for growth and stability for JBL, click here.

Overseas Shipholding Group (OSG)

OSG is an ocean-going fleet owner and operator engaged in the transportation of crude oil and petroleum products on U.S. flagged vessels. The company serves independent oil traders, refinery operators and government agencies.

On December 8, 2022, OSG announced that it has exercised its option to extend six bareboat charter contracts with American Shipping Company ASA for three years from December 2023.

OSG President and CEO Sam Norton said:

On November 15, 2022, the company announced the purchase of $5 million of common stock from Cyrus Capital at $2.86 per share. The price paid for this share purchase represents an enterprise value of approximately 4.5x projected adjusted EBITDA in 2022, an implied valuation that OSG considers highly attractive.

OSG’s Last 12 Months Leveraged FCF Margin was 15.41%, 129.6% higher than the industry average of 6.71%.

For the third quarter ended September 30, 2022, OSG’s shipment revenue increased 30.9% year-over-year to $123.06 million. The company’s net profit was $13.25 million and its net loss in the same period last year was $16.01 million. Also, EPS was $0.15 and his loss per share was $0.18 in the same period last year.

Over the past three months, the stock has gained 31.3% and closed its last trading session at $3.65. It’s up 4% over the past month. The stock is currently trading above the 50- and 200-day moving averages of $3.48 and $2.87 respectively.

It’s no surprise that OSG has an overall A rating. This equates to a strong buy in our POWR rating system.

There is an A grade for Momentum and a B grade for Growth, Value, Sentiment and Quality. 42 stocks rated A Shipping No. 1 in the industry.

click here To see OSG’s additional assessment of stability,

Adams Resources & Energy, Inc. (AEs)

AE markets, transports and stores various US crude oil and natural gas basins. The company has his three business segments of crude oil marketing, transportation and storage. Tank truck transportation of liquid chemicals, pressurized gas, asphalt and dry bulk. Pipeline transportation, terminals and storage of crude oil.

On February 21, AE announced a quarterly cash dividend of $0.24 per common share for the fourth quarter of 2022, payable to shareholders on March 24, 2023. The company has paid his dividend consistently since 1994. business and the strength of the company’s financial position.

In November 2022, AE announced the repurchase of all shares of Adams common stock owned by KSA Industries, Inc. The total purchase price is approximately $70 million, or $36 per share, of existing cash on hand and a new term loan.

In addition to the company’s recent acquisitions, the share buyback is expected to enhance value for all remaining shareholders. “The company will also soon see annual savings of approximately $1.9 million in dividend payouts at its current rate,” said Kevin Roycraft, CEO of the company.

AE’s 7.84x asset turnover over the last 12 months is well above the industry average of 0.66x.

For the third quarter ended September 30, AE total revenues were $852.9 million, up 50.1% year-over-year. Operating income increased 30.1% year-over-year to $2.99 ​​million and net income increased 41.7% year-over-year to $2.19 million. The company’s net earnings per common share improved 38.9% from last year to $0.50.

The consensus EPS estimate of $4.01 for the fiscal year ending December 2023 represents a 19% year-over-year improvement. The company’s revenue is expected to be his $3.1 billion.

The stock has gained 88.2% over the past six months and 38.5% over the past three months, closing its last trading session at $53.86. The stock is currently trading above the 50-day and 200-day moving averages of $50.13 and $37.61 respectively.

AE’s POWR rating reflects a promising outlook. The stock has an overall rating of B, which translates to a ‘Buy’ in our proprietary rating system.

Stocks also have A grades for momentum and sentiment, and B grades for value and quality. Out of 91 B rated brands Energy – Oil and Gas It ranks 16th in the industry.

click here Additional POWR assessment for AE (stability and growth).

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JBL shares were unchanged in premarket trading on Wednesday. Year-to-date, JBL is up 23.34% of him, while the benchmark S&P 500 index is up 4.14% of him over the same period.

About the Author: Srithi Suman Jayaswar

As a student, he became interested in stock market dynamics and became a financial journalist. Investing in undervalued stocks with solid long-term growth prospects is her preferred strategy. With her master’s degree in Accounting and Finance, Sristi hopes to deepen her investment research experience and better guide investors.

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