The central bank’s rate hikes finally seem to be paying off as inflation eased in November, with the consumer price index (CPI) rising 7.1% year-over-year and 0.1% over the prior month, lower than expected. These figures reflect that inflation has moderated from its 9.1% peak in June this year.

Moody’s chief economist, Mark Zandi, said, “Inflation is still painfully high, but the pain is increasingly less intense.”

However, price levels still remain stubbornly high and well above the Fed’s long-term price stability target of 2%. Although analysts expect a 50-basis point increase this month, lower than the string of 75 bps hikes, the hot labor market is heaping pressure on the Fed.

On the other hand, the odds of a recession next year are rising. Vanguard foresees a 90% chance of a recession in the United States by the end of 2023.

Therefore, the stock market will likely remain under pressure. Given the strong fundamentals, Cisco Systems, Inc. (CSCO), Unit Corporation (UNTC), and Civeo Corporation (CVEO) are well-positioned to survive the market uncertainties. So, these stocks could be no-brainer picks now.

Cisco Systems, Inc. (CSCO)

CSCO designs, manufactures, and sells Internet Protocol-based networking and other communications and information technology products. In addition, it provides infrastructure platforms, including networking technologies of switching, routing, wireless, and data center products.

On December 7, 2022, the company’s Board of Directors declared a quarterly cash dividend of $0.38 per common share, payable on January 25, 2023.

On November 29, 2022, the company launched new AppDynamics Cloud capabilities that allow organizations to achieve observability over cloud-native applications correlated to business context across the entire IT estate. The new capabilities will initially support cloud-native applications and digital services running on AWS as both companies continue to empower organizations on their journey to full-stack observability.

CSCO’s total revenue increased 5.7% year-over-year to $13.63 billion for the fiscal first quarter ended October 29, 2022. The company’s operating income grew 3% year-over-year to $3.54 billion, while its non-GAAP net income came in at $3.55 billion, representing a 2.1% year-over-year increase. Also, its non-GAAP EPS came in at $0.86, up 4.9% year-over-year.

The consensus EPS estimate of $0.86 for the second quarter ending January 31, 2023, represents a 1.8% improvement year-over-year. The consensus revenue estimate of $13.41 billion for the current quarter represents a 5.4% increase from the same period last year. The company has an excellent earnings surprise history, as it surpassed the consensus EPS estimates in each of the trailing four quarters.

It has gained 14.8% over the past six months to close the last trading session at $49.64.

CSCO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates 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 an A grade for Quality and a B for Stability. Within the Technology - Communication/Networking industry, it is ranked #3 out of 48 stocks. Click here to see the other ratings of CSCO for Growth, Value, Momentum, and Sentiment.

Unit Corporation (UNTC)

UNTC explores, acquires, and develops oil and natural gas properties in the United States. The company operates through its three broad segments: Oil and Natural Gas; Contract Drilling; and Mid-Stream.

For the second quarter of the fiscal year 2022 ended June 30, UNTC’s total revenues increased marginally year-over-year to $134.55 million. Income from operations rose 79.8% from the prior-year quarter to $70.16 million. Net income attributable to UNTC came in at $80.09 million and $7.82 per share, compared to a net loss of $12.99 million and $1.09 per share in the prior-year quarter.

The company is yet to report the third quarter results that ended September 30, 2022.

UNTC’s EPS is expected to increase by 44% per annum in the next five years. The stock has gained 80.7% over the past year and 75.1% year-to-date to close the last trading session at $56.56.

UNTC’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system.

It has an A grade for Value, Momentum, and Quality. Within the B-rated Energy - Oil & Gas industry, it is ranked #34 out of 89 stocks. To see the other ratings of UNTC for Growth, Stability, and Sentiment, click here.

Civeo Corporation (CVEO)

CVEO provides hospitality services to the natural resource industry in Canada, Australia, and the United States. The company develops lodges and villages and mobile accommodations. It offers food, housekeeping, maintenance services, laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security, logistics, and camp management services.

On November 15, 2022, CVEO announced a 5-year integrated services contract renewal to offer services at six villages in Western Australia. This renewal reaffirms the strength of the company’s customer relationships and high quality of hospitality services, along with expanding its scope in Australia.

In the fiscal third quarter ended September 30, 2022, CVEO’s revenues increased 18.8% year-over-year to $184.23 million. Its operating income grew 79.4% from the year-ago value to $10.78 million. Its net income attributable to common shareholders improved significantly year-over-year to $5.23 million, while its adjusted EBITDA came in at $35.03 million, registering an increase of 33.8% year-over-year.

Analysts expect CVEO’s revenue to increase 14.7% year-over-year to $681.72 million in fiscal 2022 (ending December 31, 2022). Its EPS is expected to increase by 15% per annum over the next five years. The stock has surpassed the consensus EPS estimates in three of the trailing four quarters.

Shares of CVEO have gained 47.9% over the past year and 53.5% year-to-date to close the last trading session at $29.42.

CVEO’s POWR Ratings reflect solid prospects. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.

It has an A grade for Sentiment and a B for Value, Stability, and Quality. In the B-rated Outsourcing - Business Services industry, it is ranked #2 of 42 stocks. Click here to see the other ratings of CVEO for Growth and Momentum.

CSCO shares were trading at $49.95 per share on Wednesday morning, up $0.31 (+0.62%). Year-to-date, CSCO has declined -18.70%, versus a -13.80% rise in the benchmark S&P 500 index during the same period.

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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