Broader markets lost some steam this week but the S&P 500 and Nasdaq are still up +18% and +30% in 2023 respectively.
This week’s cool-down could start presenting better buying opportunities and keep valuations more reasonable. In that regard here are several top-rated stocks from a variety of sectors that are worthy of consideration as they are shaping up to be ideal buy-the-dip candidates.
Computer & Technology
Considering the Nasdaq’s strong YTD performance, we’ll start with a pair of tech stocks that shouldn’t be overlooked in Jabil JBL and Hewlett Packard HPE.
Notably, Jabil’s Electronics-Manufacturing Services Industry is in Zacks top 2% of over 250 industries. As one of the largest global suppliers of electronic manufacturing services Jabil is expecting solid top and bottom line growth.
Annual earnings are forecasted to jump 11% this year and rise another 9% in FY24 at $9.25 per share. Fiscal 2023 sales are forecasted to be up 4% and rise another 3% in FY24 to $35.77 billion. Pleasantly, this steady growth makes Jabil a prime buy-the-dip candidate among tech stocks trading at 12.5X forward earnings which is on par with its industry average and nicely beneath the S&P 500’s 20.9X.
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Pivoting to Hewlett Packard, the company’s P/E valuation is also attractive at just 8.3X forward earnings which is well below its own industry average of 15.6X and the benchmark.
Plus, Hewlett Packard’s earnings are expected to be up 4% in FY23 to $2.11 per share. Annual earnings are expected to dip -1% in FY24 but EPS projections of $2.08 per share would still represent 54% growth over the last five years with 2020 earnings at $1.35 a share.
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Transportation
After impressively surpassing Q2 top and bottom-line expectations in July, American Airlines AAL and Delta Air Lines DAL might be overlooked at the moment. Both stocks trade under 10X forward earnings with rising earnings estimates supporting their attractive valuations.
Travel demand remains higher and the outlook continues to strengthen for airliners with earnings estimates still nicely up for American Airlines and Delta over the last 60 days. American Airlines’ fiscal 2023 earnings estimates have climbed 16% to $3.37 per share compared to $2.91 a share two months ago. Plus, FY24 earnings estimates are up 6%.
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The trend in earnings estimate revisions is similar for Delta with the company expecting noticeable bottom line expansion. Delta’s earnings are now forecasted to soar 108% in FY23 to $6.67 per share compared to $3.20 a share in 2022. Fiscal 2024 earnings are projected to leap another 13% to $7.52 per share.
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Multi-Sector Conglomerates
Another stock to watch is ITT Inc ITT, a global multi-industry leader in high-technology engineering and manufacturing projects. With an expanding bottom line, ITT stock also trades reasonably at 19.9X forward earnings.
This is a nice discount to the Diversified Operations Market’s 23.7X and ITT is a clear-cut leader in the space. More importantly, earnings estimates are ticking higher with ITT’s bottom line expected to expand 13% in FY23 and then another 12% in FY24 at $5.62 per share.
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Bottom Line
These top-rated Zacks stocks share the commonality of a Zacks Rank #2 (Buy) and an overall “A” VGM Style Scores grade for the combination of Value, Growth, and Momentum. Serving as a complementary set of indicators to use alongside the Zacks Rank this impressive Style Scores grade is also favorable for buying the dip.
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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
ITT Inc. (ITT) : Free Stock Analysis Report
Jabil, Inc. (JBL) : Free Stock Analysis Report
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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