Since the beginning of the year, the stock market has experienced severe volatility due to supply chain constraints, rising energy and crude oil prices, and the ongoing war between Ukraine and Russia.
The major market indexes have faced selling pressure of late due to the higher-than-expected rise in inflation in May. The World Bank has slashed the global economic expansion forecast by 1.2 % to 2.9% this year. It also warned that economies are inching closer to stagflation.
Persistent supply chain issues, surging inflation, and the Fed’s aggressive monetary tightening dampen the economic outlook. Amid such an uncertain environment, investors can consider investing in quality mid-cap stocks that have improved their fundamentals and can deliver stable returns in the upcoming months.
It could be wise to add Grindrod Shipping Holdings Ltd. (GRIN), Perion Network Ltd. (PERI), and Mitek Systems, Inc. (MITK) to your portfolio as these stocks have been recently upgraded from ‘Buy’ to ‘Strong Buy’ in our proprietary POWR Ratings system.
Grindrod Shipping Holdings Ltd. (GRIN)
GRIN is an international shipping company based in Singapore that owns, charters in, and operates a fleet of dry bulk carriers and tankers worldwide. It has a market capitalization of $364.94 million.
On May 17, 2022, GRIN announced that it had entered into a contract to sell the medium-range product tanker Matuku for $30 million. Anticipating its sale, the company exercised the purchase option for the tanker under the existing lease financing arrangement at the cost of $25.40 million following the expiration of the bareboat charter.
GRIN’s revenue increased 61.1% year-over-year to $110.28 million for the first quarter ended March 31, 2022. The company’s adjusted EBITDA increased 137% year-over-year to $50.15 million. Also, its adjusted net income increased 1,119.3% year-over-year to $29.82 million.
Analysts expect GRIN’s EPS and revenue for fiscal 2022 to increase 12.5% and 11.5% year-over-year to $6.63 and $508.40 million, respectively. Over the past year, the stock has gained 73.4% to close the last trading session at $19.25.
GRIN’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has an A grade for Sentiment and a B grade for Growth, Value, and Momentum. Within the A-rated Shipping industry, it is ranked #4 out of 44 stocks. Click here to see the other ratings of GRIN for Stability and Quality.
Perion Network Ltd. (PERI)
Headquartered in Holon, Israel, PERI delivers online advertising solutions and search monetization to brands and publishers. It provides data-driven execution, from high-impact ad formats to branded search and a unified social and mobile programmatic platform. Its business solutions include Undertone, Codefuel, MakeMeReach, and Smilebox. It has a market capitalization of $793.56 million.
For the fiscal first quarter ended March 31, 2022, PERI’s total revenue increased 39.5% year-over-year to $125.31 million. The company’s adjusted EBITDA increased 158.1% year-over-year to $22.67 million. Also, its non-GAAP net income increased 196.4% year-over-year to $20.72 million. In addition, its non-GAAP EPS came in at $0.44, representing an increase of 131.5% year-over-year.
For the quarter ending June 30, 2022, PERI’s EPS and revenue are expected to increase 57.9% and 33.4% year-over-year to $0.30 and $146.33 million, respectively. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 10.4% to close the last trading session at $17.82.
PERI’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Value and Sentiment and a B grade for Growth and Quality. It is ranked #2 out of 31 stocks in the Internet – Services industry. Click here to see the other ratings of PERI for Momentum and Stability.
Mitek Systems, Inc. (MITK)
MITK is a software development company that is engaged in the business of developing computer vision, artificial intelligence, and machine learning. It develops, sells, and services software solutions related to the mobile imaging segment.
The company develops mobile image capture and digital identity verification solutions. Its products include Mobile Deposit, Mobile Verify, Mobile Fill, CheckReader, Check Fraud Defender, Check Intelligence, ID_CLOUD, IDLive Face, IDLive Voice, and IDLive Doc. It has a market capitalization of $387.59 million.
On March 23, 2022, MITK announced the acquisition of UK-based KYC technology pioneers, HooYu. The acquisition helps businesses know their customers' real identities by linking biometric verification with real-time bureau and sanction database checks. The acquisition will enable MITK’s customers to optimize workflows and accelerate the deployment of identity solutions across channels.
MITK’s total revenue increased 20.6% year-over-year to $34.71 million in the second quarter ended March 31, 2022. The company’s non-GAAP net income increased 48.5% year-over-year to $10.84 million. Also, its non-GAAP EPS came in at $0.24, representing an increase of 50% year-over-year.
Analysts expect MITK’s EPS for fiscal 2023 to increase 18.6% year-over-year to $1.02. Its revenue for fiscal 2022 is expected to increase 17.3% year-over-year to $140.58 million. It surpassed Street EPS estimates in each of the trailing four quarters. Over the past month, the stock has lost 4.3% to close the last trading session at $8.74.
MITK’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Growth and a B grade for Value and Quality. Within the Software – Application industry, it is ranked #7 out of 156 stocks. Click here to see the other ratings of MITK for Momentum, Stability, and Sentiment.
GRIN shares were trading at $19.74 per share on Tuesday afternoon, up $0.49 (+2.55%). Year-to-date, GRIN has gained 14.91%, versus a -20.86% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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