Two major benchmark indexes slipped marginally yesterday, with investors preparing for a busy week of inflation data. The S&P 500 and Nasdaq Composite fell 0.1% each to close the last trading session at 4,140.06 and 12,644.46, respectively. However, the Dow Jones Industrial Average was up marginally to close at 32,832.54.
The red-hot July jobs report has raised the possibility of a higher interest rate increase in the Fed’s next meeting. Therefore, investors might want to wait for a better indication on that front. Overall, the market is expected to remain under pressure in the near term.
Thus, we think it could be wise to invest in quality stocks The Kroger Co. (KR), AudioCodes Ltd. (AUDC), Movado Group, Inc. (MOV), Progress Software Corporation (PRGS), and Viemed Healthcare, Inc. (VMD), which are trading currently under $50.
The Kroger Co. (KR)
KR is a food retailer that owns and operates combination food and drug stores, supermarkets, multi-department stores, and fulfillment centers. It sells its products under seven brand names: Private Selection, The Kroger, Big K, Check This Out, Heritage Farm, Simple Truth, and Simple Truth Organic.
On August 2, 2022, announced the opening of a new spoke location in Louisville, Kentucky. On July 14, KR expanded its footprint in Greater Nashville and the Chicago Metro Area by adding new facilities. Such expansions should enable the company to serve more customers and boost its revenues.
KR’s sales increased 8% year-over-year to $44.60 billion in the first quarter ended May 21, 2022. Its operating profit increased 87% year-over-year to $1.50 billion. The company’s adjusted EBITDA grew 9.5% year-over-year to $7.44 billion, while its adjusted net earnings rose 17% from the prior-year quarter to $1.07 billion. KR’s adjusted EPS came in at $1.45, representing 21.9% year-over-year.
The consensus EPS estimate of $0.78 for the fiscal third quarter (ending October 2022) represents a marginal improvement year-over-year. The consensus revenue estimate of $33.74 billion for the ongoing quarter indicates a 5.9% increase from the same period last year. The company has an excellent earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past nine months, the stock has gained 12.9% to close the last trading session at $47.09.
KR’s POWR Ratings reflect this promising outlook. The company's overall A rating translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has a B grade for Growth, Value, and Quality. Within the A-rated Grocery/Big Box Retailers industry, it is ranked #4 of 38 stocks. To see the additional POWR Ratings of KR for Momentum, Stability, and Sentiment, click here.
AudioCodes Ltd. (AUDC)
Headquartered in Lod, Israel, AUDC is a leading vendor of advanced voice networking and media processing solutions for the digital workplace. It offers solutions, products, and services for unified communications, contact centers, VoiceAI business lines, and service provider businesses.
On April 25, 2022, the company announced that it had been approved as a partner for Microsoft’s Operator Connect Accelerator. “AudioCodes Live Cloud is the ideal SaaS solution for assisting service providers in accelerating Operator Connect customer onboarding and operations, all on a per-user per-month plan,” said Lior Aldema, Chief Business Officer at AudioCodes.
AUDC’s total revenues increased 12.8% year-over-year to $68.36 million for the second quarter ended June 30, 2022. The company’s gross profit grew 5.8% year-over-year to $44.51 million.
Analysts expect AUDC’s revenue for the fiscal third quarter (ending September 2022) to increase 11.1% to $70.41 million. Its EPS for fiscal 2023 is expected to increase 19.9% year-over-year to $1.67.
Over the past month, the stock has lost 3.9% to close the last trading session at $22.09.
AUDC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
It has an A grade for Quality and a B for Value and Stability. It is ranked first of 53 stocks in the Technology - Communication/Networking industry. Click here to see the other ratings of AUDC for Growth, Momentum, and Sentiment.
Movado Group, Inc. (MOV)
MOV designs, markets, and distributes watches through its two operating segments: Watch and Accessory Brands and Company Stores. Its customers include department stores, independent regional jewelers, online marketplaces, licensors’ retail stores, and third-party e-commerce retailers.
In the fiscal first quarter ended April 30, 2022, MOV’s net sales increased 21.2% year-over-year to $163.42 million. Its gross profit grew 30.3% from the year-ago value to $96.68 million.
Its non-GAAP operating income improved 84.7% year-over-year to $26.06 million, while its non-GAAP net income increased 89.6% from the prior year period to $19.13 million. In addition, MOV’s non-GAAP EPS came in at $0.82, registering an increase of 90.7% year-over-year.
Analysts expect MOV’s EPS to increase 3.5% year-over-year to $4.08 in fiscal 2022 (ending January 31, 2023). Its revenue for the quarter ended July 31, 2022, is expected to increase 4.1% year-over-year to $181 million. The stock has surpassed the consensus EPS estimates in each of the trailing four quarters.
MOV’s shares have gained 18% over the past year to close the last trading session at $36.84.
MOV’s POWR Ratings reflect solid prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
It has an A grade for Quality and a B for Value and Sentiment. In the B-rated Fashion & Luxury industry, it is ranked #4 of 67 stocks. Click here to see the other ratings of MOV for Growth, Momentum, and Stability.
Progress Software Corporation (PRGS)
PRGS offers software products to develop, deploy and manage high-impact business applications. Its offerings include OpenEdge, Developer Tools, Sitefinity, Corticon, DataDirect Connect, MOVEit, Chef, WhatsUp Gold, Kemp Loadmaster, and Kemp Flowmon Network Visibility, which aids businesses in innovating and fueling momentum.
With the latest release of the Flowmon network solution, on June 29, 2022, PRGS extends its multi-cloud monitoring and threat detection capabilities. Organizations can now achieve unified monitoring of their multi-cloud ecosystems from a single location while improving their cybersecurity posture.
During the second quarter (ended May 31, 2022), PRGS’ total revenue increased 21.4% year-over-year to $148.75 million. Its non-GAAP operating income grew 23.3% from the year-ago value to $61.30 million, while its non-GAAP net income increased 25.7% year-over-year to $45.89 million. The company’s non-GAAP EPS came in at $1.04, representing a 26.8% increase year-over-year.
Analysts expect PRGS’ EPS and revenue for the fourth quarter (ending November 30, 2022) to increase 20% and 14.7% year-over-year to $1.10 and $164.91 million, respectively. The company surpassed the consensus EPS estimates in each of the trailing four quarters.
The stock has gained 4.7% over the past month to close the last trading session at $47.23.
PRGS’ strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our POWR Ratings system.
It has an A grade for Quality and a B for Growth and Value. Of the 154 stocks in the Software - Application industry, it is ranked #2. To see the other ratings of PRGS for Momentum, Stability, and Sentiment, click here.
Viemed Healthcare, Inc. (VMD)
VMD provides in-home durable medical equipment (DME) and post-acute respiratory healthcare services to patients. It also offers respiratory disease management solutions to chronic obstructive pulmonary disease (COPD) patients, neuromuscular care, oxygen therapy services, sleep apnea management solutions, and related equipment.
For the fiscal second quarter ended June 30, 2022, VMD’s revenue increased 21.6% year-over-year to $33.31 million. Its gross profit grew 15.7% year-over-year to $20.39 million. Also, its net cash from operating activities for six months ended June 30, 2022, increased 37.2% year-over-year to $12.09 million.
For fiscal 2022, VMD’s EPS is expected to increase 7.6% year-over-year to $0.24. Its revenue for the quarter ending September 30, 2022, is expected to increase 18.8% year-over-year to $34.80 million. Over the past six months, the stock has gained 40.6% to close the last trading session at $6.55
VMD's POWR Ratings reflect solid prospects. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. It has a B grade for Sentiment and Quality. The stock is ranked #11 of 83 in the Medical – Services industry.
In addition to the POWR Ratings grades I've just highlighted, you can see VMD’s Growth, Value, Momentum, and Stability ratings here.
KR shares were trading at $46.87 per share on Tuesday afternoon, down $0.22 (-0.47%). Year-to-date, KR has gained 4.43%, versus a -12.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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