"Top Value Stocks" ProPicks strategy delivers 6.29% return in March 2024

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"Top Value Stocks" ProPicks strategy delivers 6.29% return in March 2024
Credit: © Pavlo Gonchar / SOPA Images/Sipa via Reuters Connect

Performance Recap

The "Top Value Stocks" ProPicks strategy posted an impressive 6.29% return in March 2024, outperforming major benchmark indices. In comparison, the S&P 500 (SPX) gained 2.08% and the Dow Jones Industrial Average (DJI) rose 1.23%.

On a three-month basis, the strategy's 11.17% return also surpassed the benchmarks, with the SPX and DJI returning 9.94% and 4.98% respectively.

Several holdings delivered exceptional monthly returns:

1. Vistra Corp. (VST): 31.70%

2. Williams-Sonoma, Inc. (NYSE: WSM ): 33.08%

3. MGM Resorts International (NYSE: MGM ): 11.22%

4. EMCOR Group, Inc. (EME): 10.90%

5. The Hartford Financial Services Group, Inc. (NYSE: HIG ): 8.51%

New Additions

The strategy introduced ten new holdings in March 2024, each presenting compelling value propositions:

1. The Gap, Inc. (NYSE: GPS )

  • Description: The Gap is a leading global retailer offering clothing, accessories, and personal care products for men, women, and children.
  • Market Cap: $10.18B | EPS: $1.36 | EPS Growth: 346.50% | P/E Ratio: 20.28 | 1M Return: 42.97% | 1Y Return: 186.17% (as of March 4, 2024)
  • Analyst Outlook: The Gap's strong earnings growth, driven by successful brand repositioning and e-commerce expansion, suggests further upside potential. However, the company faces risks from intense competition and changing consumer preferences.

2. Tenet Healthcare Corporation (NYSE: THC )

  • Description: Tenet Healthcare is a diversified healthcare services company operating hospitals, outpatient centers, and other healthcare facilities.
  • Market Cap: $10.44B | EPS: $6.01 | EPS Growth: 56.40% | P/E Ratio: 17.08 | 1M Return: 10.71% | 1Y Return: 75.68% (as of March 4, 2024)
  • Analyst Outlook: Tenet's focus on high-growth segments like ambulatory care and cost management initiatives bode well for its future prospects. Risks include regulatory challenges and labor cost pressures.

3. Cincinnati Financial Corporation (NASDAQ: CINF )

  • Description: Cincinnati Financial is an insurance holding company providing property casualty insurance, life insurance, and financial products.
  • Market Cap: $19.14B | EPS: $11.74 | EPS Growth: 482.78% | P/E Ratio: 10.39 | 1M Return: 8.33% | 1Y Return: 12.16% (as of March 4, 2024)
  • Analyst Outlook: Cincinnati Financial's strong underwriting discipline and investment income growth support its attractive valuation. Potential headwinds include catastrophe losses and competitive pressures.

4. Core & Main, Inc. (CNM)

  • Description: Core & Main is a leading specialized distributor of water, wastewater, storm drainage, and fire protection products in the United States.
  • Market Cap: $11.53B | EPS: $2.15 | EPS Growth: -0.60% | P/E Ratio: 29.67 | 1M Return: 16.97% | 1Y Return: 147.97% (as of March 4, 2024)
  • Analyst Outlook: Core & Main's leading market position and exposure to infrastructure spending tailwinds underpin its long-term growth prospects. Key risks include economic cyclicality and integration challenges from acquisitions.

5. Cognizant Technology Solutions Corporation (NASDAQ: CTSH )

  • Description: Cognizant is a leading provider of information technology, consulting, and business process services.
  • Market Cap: $35.72B | EPS: $4.21 | EPS Growth: -4.77% | P/E Ratio: 16.80 | 1M Return: -8.73% | 1Y Return: 19.76% (as of March 4, 2024)
  • Analyst Outlook: Cognizant's digital transformation capabilities and strong client relationships support its attractive valuation. However, the company faces risks from wage inflation and competition for skilled talent.

6. Exxon Mobil Corporation (NYSE: XOM )

  • Description: Exxon Mobil is one of the world's largest publicly traded international oil and gas companies.
  • Market Cap: $464.20B | EPS: $8.89 | EPS Growth: -32.96% | P/E Ratio: 12.89 | 1M Return: 10.53% | 1Y Return: 10.50% (as of March 4, 2024)
  • Analyst Outlook: Exxon's scale, diversification, and strong balance sheet position it well to navigate the energy transition. Key risks include commodity price volatility and the pace of the shift to clean energy.

7. The Kroger Co . (NYSE: KR )

  • Description: Kroger is one of the world's largest grocery retailers, operating supermarkets, multi-department stores, and fuel centers.
  • Market Cap: $41.00B | EPS: $3.01 | EPS Growth: -4.42% | P/E Ratio: 18.95 | 1M Return: 15.93% | 1Y Return: 18.26% (as of March 4, 2024)
  • Analyst Outlook: Kroger's focus on digital initiatives and data-driven personalization supports its competitive position. Risks include margin pressure from intense competition and food price deflation.

8. Jabil Inc. (JBL)

  • Description: Jabil is a leading provider of manufacturing services and solutions for electronics, telecommunications, healthcare, and automotive industries.
  • Market Cap: $17.30B | EPS: $11.64 | EPS Growth: 64.92% | P/E Ratio: 11.46 | 1M Return: -7.86% | 1Y Return: 54.28% (as of March 4, 2024)
  • Analyst Outlook: Jabil's diversified business mix and exposure to secular growth trends in 5G, cloud, and healthcare support its attractive valuation. Key risks include customer concentration and supply chain disruptions.

9. NetApp, Inc. (NASDAQ: NTAP )

  • Description: NetApp is a leading provider of cloud data services and data management solutions for enterprises.
  • Market Cap: $21.68B | EPS: $4.47 | EPS Growth: -23.89% | P/E Ratio: 23.06 | 1M Return: -0.26% | 1Y Return: 69.01% (as of March 4, 2024)
  • Analyst Outlook: NetApp's strong position in the fast-growing cloud data management market underpins its growth prospects. Risks include competition from hyperscale cloud providers and IT spending slowdowns.

10. Omnicom Group Inc. (NYSE: OMC )

  • Description: Omnicom is a leading global advertising, marketing, and corporate communications company.
  • Market Cap: $19.05B | EPS: $6.98 | EPS Growth: 8.98% | P/E Ratio: 13.69 | 1M Return: 10.03% | 1Y Return: 5.74% (as of March 4, 2024)
  • Analyst Outlook: Omnicom's diverse client base and expanding digital capabilities support its attractive valuation. However, the company faces risks from client budget cuts and the ongoing shift to digital advertising.

Portfolio Updates

Removed Stocks:

1. Humana Inc . (NYSE: HUM ) - Monthly Return: 0.09%

2. Booking Holdings Inc. (NASDAQ: BKNG ) - Monthly Return: 2.24%

3. Coupang, Inc. (CPNG) - Monthly Return: -3.96%

4. QUALCOMM Incorporated (NASDAQ: QCOM ) - Monthly Return: 5.29%

5. EMCOR Group, Inc. (EME) - Monthly Return: 10.90%

6. UnitedHealth Group Incorporated (NYSE: UNH ) - Monthly Return: 0.43%

7. The Hartford Financial Services Group, Inc. (HIG) - Monthly Return: 8.51%

8. American Express Company (NYSE: AXP ) - Monthly Return: 3.62%

9. DaVita Inc . (NYSE: DVA ) - Monthly Return: 8.60%

10. Molina Healthcare, Inc. (NYSE: MOH ) - Monthly Return: 4.39%

Continue Holding:

1. Charter Communications , Inc. (NASDAQ: CHTR ) - Monthly Return: -3.07%

  • Description: Charter Communications is a leading broadband connectivity and cable operator in the United States, providing services under the Spectrum brand.
  • Market Cap: $45.89B | EPS: $30.54 | EPS Growth: -2.42% | P/E Ratio: 9.00 | 1Y Return: -20.54% | 3M (NYSE: MMM ) Return: -26.89% (as of March 4, 2024)
  • Analyst Outlook: Charter's strong market position and growth in high-speed internet subscribers support its attractive valuation. Key risks include cord-cutting trends and regulatory pressures.

2. Expedia Group, Inc. (NASDAQ: EXPE ) - Monthly Return: -2.65%

  • Description: Expedia is one of the world's leading online travel companies, operating a portfolio of travel booking brands.
  • Market Cap: $18.16B | EPS: $5.50 | EPS Growth: 144.70% | P/E Ratio: 22.78 | 1Y Return: 37.30% | 3M Return: -12.23% (as of March 4, 2024)
  • Analyst Outlook: Expedia's strong brand portfolio and the ongoing recovery in travel demand support its growth prospects. Risks include competition from other online travel agencies and the impact of economic downturns on discretionary travel spending.

3. United Therapeutics Corporation (NASDAQ: UTHR ) - Monthly Return: -1.58%

  • Description: United Therapeutics is a biotechnology company focused on developing and commercializing innovative therapies for chronic and life-threatening conditions.
  • Market Cap: $10.74B | EPS: $21.04 | EPS Growth: 31.64% | P/E Ratio: 10.91 | 1Y Return: 1.92% | 3M Return: 3.81% (as of March 4, 2024)
  • Analyst Outlook: United Therapeutics' strong pipeline and growth in its pulmonary arterial hypertension franchise support its attractive valuation. Key risks include competition from generic drugs and the binary nature of clinical trial outcomes.

4. Williams-Sonoma, Inc. (WSM) - Monthly Return: 33.08%

  • Description: Williams-Sonoma is a leading specialty retailer of high-quality home products, operating under brands such as Williams Sonoma, Pottery Barn, and West Elm.
  • Market Cap: $20.20B | EPS: $14.71 | EPS Growth: -11.30% | P/E Ratio: 21.27 | 1Y Return: 165.23% | 3M Return: 56.77% (as of March 4, 2024)
  • Analyst Outlook: Williams-Sonoma's strong brand loyalty, e-commerce capabilities, and exposure to the home furnishings market support its premium valuation. Risks include a slowdown in housing market activity and increased competition from online and discount retailers.

5. Vistra Corp. (VST) - Monthly Return: 31.70%

  • Description: Vistra is a leading integrated retail electricity and power generation company, operating primarily in Texas and the Northeastern United States.
  • Market Cap: $24.88B | EPS: $3.63 | EPS Growth: 211.42% | P/E Ratio: 18.53 | 1Y Return: 205.11% | 3M Return: 86.34% (as of March 4, 2024)
  • Analyst Outlook: Vistra's strong cash flow generation and exposure to the growing renewable energy market support its attractive valuation. Key risks include commodity price volatility and regulatory uncertainties.

6. PayPal Holdings, Inc. (NASDAQ: PYPL ) - Monthly Return: 7.42%

  • Description: PayPal is a leading digital payments company, enabling digital and mobile payments on behalf of consumers and merchants worldwide.
  • Market Cap: $69.70B | EPS: $3.85 | EPS Growth: 83.64% | P/E Ratio: 16.41 | 1Y Return: -14.37% | 3M Return: 5.89% (as of March 4, 2024)
  • Analyst Outlook: PayPal's strong brand recognition, large user base, and exposure to the fast-growing e-commerce market support its growth prospects. Risks include increasing competition from other digital payment providers and the potential for regulatory scrutiny.

7. Tapestry, Inc. (NYSE: TPR ) - Monthly Return: 2.63%

  • Description: Tapestry is a leading New York-based house of modern luxury accessories and lifestyle brands, including Coach , Kate Spade, and Stuart Weitzman.
  • Market Cap: $11.03B | EPS: $4.02 | EPS Growth: 18.91% | P/E Ratio: 11.88 | 1Y Return: 15.67% | 3M Return: 31.65% (as of March 4, 2024)
  • Analyst Outlook: Tapestry's strong brand portfolio, international expansion, and digital initiatives support its attractive valuation. Key risks include exposure to macroeconomic factors affecting consumer spending and intense competition in the luxury goods market.

8. Discover Financial Services (NYSE: DFS ) - Monthly Return: 7.09%

  • Description: Discover Financial Services is a leading direct banking and payment services company, operating the Discover card and offering personal and student loans, home equity loans, and deposit products.
  • Market Cap: $32.42B | EPS: $11.26 | EPS Growth: -27.25% | P/E Ratio: 11.34 | 1Y Return: 34.68% | 3M Return: 15.76% (as of March 4, 2024)
  • Analyst Outlook: Discover's strong market position, loyal customer base, and conservative underwriting standards support its attractive valuation. Risks include the potential for increased credit losses during economic downturns and competition from other credit card issuers.

9. Royalty Pharma plc (RPRX) - Monthly Return: -0.10%

  • Description: Royalty Pharma is the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the biopharmaceutical industry.
  • Market Cap: $17.86B | EPS: $2.54 | EPS Growth: 2492.45% | P/E Ratio: 11.77 | 1Y Return: -14.70% | 3M Return: 7.21% (as of March 4, 2024)
  • Analyst Outlook: Royalty Pharma's diversified portfolio of royalty streams and exposure to the fast-growing biopharmaceutical industry support its attractive valuation. Key risks include the potential for patent expirations and the binary nature of clinical trial outcomes for the underlying drugs.

New Holdings:

1. The Gap, Inc. (GPS)

2. Tenet Healthcare Corporation (THC)

3. Cincinnati Financial Corporation (CINF)

4. Core & Main, Inc. (CNM)

5. Cognizant Technology Solutions Corporation (CTSH)

6. Exxon Mobil Corporation (XOM)

7. The Kroger Co. (KR)

8. Jabil Inc. (JBL)

9. NetApp, Inc. (NTAP)

10. Omnicom Group Inc. (OMC)

In summary, the "Top Value Stocks" ProPicks strategy delivered strong returns in March 2024, outperforming major benchmark indices on both a one-month and three-month basis. The strategy's top performers included Vistra Corp. (VST), Williams-Sonoma, Inc. (WSM), and MGM Resorts International (MGM).

The March 2024 rebalancing introduced ten new holdings with compelling value propositions, while maintaining exposure to high-conviction names such as Charter Communications, Inc. (CHTR),

Monthly News Highlights

Charter Communications, Inc. (NasdaqGS:CHTR)

  • On March 18, Bernstein upgraded Charter Communications stock from 'Market Perform' to 'Outperform', with a new price target of $370.00, indicating a potential 25% upside. The firm believes that the risks have already been factored into Charter's current valuation and expects a significant recovery as identified risks evolve throughout 2024 and into 2025. Read more
  • On March 7, Charter Communications and The Walt Disney Company (NYSE: DIS ) announced that ESPN+ is now available to Spectrum TV Select Plus customers at no additional cost. This move aims to make streaming apps part of linear Spectrum TV bundle packages, providing a comprehensive entertainment solution for Spectrum customers. Read more

Expedia Group, Inc. (NasdaqGS:EXPE)

  • On March 14, Ascendiant Capital analysts lowered the price target on Expedia to $160.00 while maintaining a Buy rating following the company's fiscal Q4 2023 results. Expedia reported revenue of $2,887 million and pro forma EPS of $1.72, beating estimates. The company provided initial 2024 guidance for revenue growth of +10% and improved EBITDA margins. Read more
  • On March 19, a Jefferies analyst maintained a 'hold' rating on Expedia with a price target of $145.00, down from the previous target of $150.00. According to Investing Pro, Expedia's fair value is estimated to be $161.28 with a medium degree of uncertainty attached to it. Read more

United Therapeutics Corporation (NasdaqGS:UTHR)

  • On March 25, United Therapeutics announced a stock repurchase program of up to $1 billion. The company will enter into an Accelerated Share Repurchase (ASR) agreement with Citibank to facilitate the repurchase, with settlement expected in Q2 and Q3 2024. Read more
  • On March 7, Wells Fargo (NYSE: WFC ) maintained its "overweight" rating for United Therapeutics, with a price target of $325.00, an increase from the previous target of $309.00. According to Investing Pro, the fair value for United Therapeutics is estimated to be $287.11 with a potential upside of 21.16%. Read more

Williams-Sonoma, Inc. (NYSE:WSM)

  • On March 13, shares of Williams-Sonoma surged 19.1% after the company reported better-than-expected fourth-quarter results, with revenue and EPS exceeding Wall Street's expectations. The positive results also led to an increase in the company's quarterly dividend by 26% and share repurchase capacity to $1 billion. Read more
  • On March 11, RBC Capital raised its stock price target for Williams-Sonoma to $261 from $165, following the company's strong fourth-quarter performance and stable demand outlook. RBC Capital expects stable demand for Williams-Sonoma with flat net revenue growth in 2024, while management is expected to set an operating margin guidance of around 15%. Read more

The Gap, Inc. (NYSE:GPS)

  • On March 7, Gap reported better-than-expected earnings and revenue for fiscal Q4 2023, leading to a 9% increase in its stock price. The company posted earnings per share of $0.49, surpassing consensus estimates of $0.22, and revenue of $4.3 billion, exceeding the anticipated $4.22 billion. Read more
  • On March 8, CFRA raised its price target for Gap Inc. from $12 to $15, citing an improved earnings per share (EPS) estimate for fiscal year 2025 (FY25). Despite these positive revisions, CFRA remains cautious about Gap's long-term investment potential due to below-peer operating metrics, lack of clear growth drivers, and inconsistent management performance. Read more

Tenet Healthcare Corporation (NYSE:THC)

  • On March 27, Wolfe Research upgraded its rating on Tenet Healthcare stock from Peer Perform to Outperform and set a price target of $122. The firm cited the potential upside from an increase in Michigan supplemental Medicaid payments expected in 2024, as well as Tenet's ongoing efforts to reduce debt. Read more
  • On March 28, Tenet Healthcare Corporation announced that it will report its first quarter 2024 results on April 30th. The results will be released no later than 6:00 a.m. Central Time (CT), followed by a conference call at 9:00 a.m. CT (10:00 a.m. Eastern Time). Read more

Vistra Corp. (NYSE:VST)

  • On March 14, Bank of America (NYSE: BAC ) Securities raised its price target for Vistra Energy (NYSE: VST ) to $70.00 from $52.00, while maintaining a Buy rating on the stock. The revision comes as Vistra Energy's shares have risen 55% year-to-date, with BofA Securities citing the growth of data centers as a significant factor for the positive outlook on Vistra. Read more
  • On March 26, Morgan Stanley (NYSE: MS ) maintained its "overweight" rating for Vistra Energy, with a price target of $78.00, an increase from the previous target of $62.00. According to Investing Pro, the fair value for Vistra Energy is estimated to be $82.52 with a medium degree of uncertainty attached to it. Read more

PayPal Holdings, Inc. (NasdaqGS:PYPL)

  • On March 7, PayPal announced that Tap to Pay on iPhone is now available for all Venmo business profile and PayPal Zettle users in the U.S. This feature allows businesses to accept contactless card and digital wallet payments directly on their iPhones at no additional cost or hardware. Read more

Cincinnati Financial Corporation (NasdaqGS:CINF)

  • On March 25, BMO Capital Markets upgraded its rating on Cincinnati Financial shares from Market Perform to Outperform, with a price target of $135. The firm expects the company's performance metrics to improve in the coming years as it incorporates additional excess IBNR reserves into its existing reserves. Read more
  • On March 13, CFRA raised the stock price target of Cincinnati Financial to $135 from $122 and maintained a Buy rating on the shares. The increase reflects a positive outlook on the company's earnings potential and growth trajectory. Read more

Core & Main, Inc. (NYSE:CNM)

  • On March 19, Core & Main reported record net sales of over $6.7 billion for fiscal year 2023 in its latest earnings call. The company also achieved an adjusted EBITDA of $910 million and a record operating cash flow of approximately $1.1 billion. Looking ahead to the future, Core & Main aims to reach $10 billion in net sales by 2028 through organic growth, margin expansion, and strategic mergers and acquisitions. Read more
  • On March 20, Barclays (LON: BARC ) raised its stock price target for Core & Main Inc. to $65 from $49, maintaining an Overweight rating on the company. Barclays believes that Core & Main's strong growth prospects, driven by strategic mergers and acquisitions, better than expected organic growth, and resilient gross margins, make it a strong performer in its industry. Read more

Cognizant Technology Solutions Corporation (NasdaqGS:CTSH)

  • On March 19, Cognizant announced a partnership with NVIDIA (NASDAQ: NVDA ) to apply generative AI (gen AI) technology for drug discovery in the life sciences industry. By leveraging gen AI technologies, researchers can quickly analyze extensive datasets, predict interactions between drug compounds more accurately, and create new pathways for drug development. Read more
  • On March 21, Cognizant and Google (NASDAQ: GOOGL ) Cloud expanded their partnership to enhance software delivery and accelerate developer productivity. Cognizant will adopt Gemini for Google Cloud, training its associates to use the AI-powered tool for software development assistance. The collaboration aims to deliver benefits across industries by helping enterprise clients build applications quickly, rigorously test code, and optimize performance throughout the software delivery lifecycle. Read more

Exxon Mobil Corporation (NYSE:XOM)

  • On March 5, commodity trading firm Vitol was reportedly close to acquiring Exxon and Qatarenergy's stakes in an LNG terminal in Italy, according to sources. The deal would give Vitol a significant presence in the European gas market as it seeks to expand its energy portfolio. Read more
  • On March 8, Chevron (NYSE: CVX ) CEO Michael Wirth faced challenges with his $53 billion bid for Hess (NYSE: HES ) and its stake in Guyana's oil hotspot. Exxon Mobil filed an arbitration claim that could block the proposed merger between Hess and Chevron, claiming a right of first refusal to any sale of Hess' Guyana oil assets. Read more

The Kroger Co. (NYSE:KR)

  • On March 7, Kroger forecasted annual sales and profit above Wall Street estimates for 2024 due to higher demand for groceries. The company's shares rose over 5% in premarket trading following the announcement. Kroger expects net sales for the first quarter of 2024 to be roughly flat but anticipates an increase in gross margin by at least 100 basis points during that period. Read more
  • On March 8, BofA Securities raised its price target for Kroger Co from $55 to $70 following the supermarket chain's strong Q4 earnings. The new target reflects a valuation of approximately 15 times the projected adjusted earnings per share (EPS) for fiscal year 2026, estimated at $4.55. Read more

Jabil Inc. (NYSE:JBL)

  • On March 15, Jabil Inc. reported its second-quarter fiscal year 2024 earnings, meeting its revenue guidance with approximately $6.8 billion. The company saw a year-over-year increase in core operating income to $338 million and successfully divested its mobility business for $2.2 billion. Despite a downturn in the 5G and renewable energy markets, Jabil is optimistic about growth in electric vehicles, healthcare, and AI data centers for fiscal year 2025. Read more
  • On March 12, JPMorgan (NYSE: JPM ) maintained its Overweight rating on Jabil, with a price target of $155. The firm's analyst noted that while there may be a reduction in revenue for FY24 due to weakness in several end-markets, Jabil's focus on the Cloud segment has led to strong performance so far this year. Read more

NetApp, Inc. (NasdaqGS:NTAP)

  • On March 1, NetApp reported strong financial results for Q3 FY2024, with increases in consolidated gross margin, operating margin, and earnings per share (EPS). The company's revenue exceeded expectations due to high demand for its all-flash product portfolio and hybrid cloud solutions. NetApp raised its full-year revenue guidance to $6.185 billion - $6.335 billion and EPS to $6.40 - $6.50. Read more
  • On March 1, Stifel maintained its "buy" rating for NetApp and increased the price target from $105.00 to $120.00. According to Investing Pro, NetApp's fair value is estimated to be $88.05 with a downside of 1.20%. However, this fair value comes with low uncertainty according to InvestingPro's analysis. Read more

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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