Feeling optimistic the brand new 12 months will usher in a change in inventory market dynamics and shift sentiment from bear to bull? Nicely, Leon Cooperman has some dangerous information for you.
The billionaire investor has been a fully-fledged bear for some time now and 2023 has executed little to alter his stance. “Anyone in search of a brand new bull market any time quickly is trying the mistaken manner,” Cooperman mentioned.
In truth, Cooperman thinks there’s solely a 5% likelihood the S&P 500 sees out 2023 above the 4,400 mark (up 13% from present ranges), believing the inventory market is much likelier to go again down from right here.
Cooperman evidently is aware of a factor or two about investing in bear markets, and if we’re to heed his recommendation, it’s finest to search for ‘secure havens’ to defend from additional incoming volatility.
With this in thoughts, we delved into the TipRanks database and pulled out two shares that analysts consider supply simply that. Furthermore, the view on Wall Road is that each are Sturdy Buys. Let’s see what makes them good shelters from the storm proper now.
Ashland Inc. (ASH)
The primary inventory we’ll take a look at is American chemical substances firm Ashland. With a presence in 100+ nations, the corporate presents components and specialty components, offering companies to shoppers in a wide range of client and industrial sectors, resembling private care, automotive, power, meals and beverage, nutraceuticals, prescription drugs, and architectural coatings. With a workforce of three,900, the corporate has a market cap of $5.77 billion.
And going in opposition to the final market pattern, Ashland has managed to protect that market cap over the previous 12 months, with the inventory seeing out 2022 1% into the inexperienced, a much better show than the S&P 500’s losses of 19%.
Delivering robust earnings actually helps in beating the market, and that is one thing the corporate’s most up-to-date report – for the fourth quarter of fiscal 12 months 2022 (September quarter) – managed to tug off. Income climbed by 6.8% year-over-year to $631 million, assembly Road expectations whereas adj. EPS improved by 20% to clock in at $1.46 – 5 cents above the $1.41 consensus estimate. Importantly, the corporate supplied a superb outlook, with gross sales for FY23 anticipated to be within the vary between $2.5 billion to $2.7 billion in comparison with consensus at $2.39 billion.
Laying out the bull-case, BMO analyst John McNulty explains the myriad causes to again the corporate.
“ASH’s defensive nature (60-65% of their income tied to non-public care and life sciences) and its offered out positions in a number of product traces ought to assist to insulate the corporate from the macro headwinds anticipated in 2023,” the analyst mentioned. “Additional, with ASH rising its deal with promoting merchandise into purposes that discover /respect higher worth from ASH’s merchandise (up-selling), they need to proceed to see optimistic pricing for the portfolio. Lastly, ASH has vital stability sheet energy that affords the corporate vital flexibility whereas providing traders monetary stability. With the entire above in thoughts, ASH ought to present traders a secure haven in 2023 as macro uncertainty continues.”
Accordingly, McNulty charges ASH shares an Outperform (i.e. Purchase), backed by a $139 value goal. Traders may very well be sitting on features of ~30%, ought to McNulty’s forecast play out as anticipated. (To look at McNulty’s monitor report, click on right here)
Total, it’s clear that Wall Road agrees with McNulty on the ahead prospects for Ashland. The inventory’s 8 current analyst opinions embody 7 Buys and 1 Maintain, for a Sturdy Purchase consensus indicative of a bullish outlook. The shares are priced at $106.57 and their $131.25 common value goal implies a 12-month upside of 23%. (See Ashland inventory forecast on TipRanks)
AmerisourceBergen Company (ABC)
If current previous efficiency amidst 2022’s bearish tendencies is something to go by, then AmerisourceBergen’s credentials are arduous to beat. The American drug wholesale firm fared significantly better than common final 12 months, producing for traders strong returns of 26%.
The corporate is among the world’s greatest pharmaceutical service suppliers, centered each on pharmaceutical producers and healthcare suppliers, and providing drug distribution and consulting companies. In truth, such is its attain, round 20% of all of the prescription drugs offered and distributed within the U.S. are dealt with by the corporate. Moreover, AmerisourceBergen has a robust worldwide presence with greater than 150 company-owned places of work unfold throughout the globe.
The actual fact the enterprise is seeing robust demand even in opposition to the backdrop of an unfavorable macro was clear to see in probably the most not too long ago reported assertion – for the fourth fiscal quarter of 2022 (September quarter). Income got here in at $61.17 billion, amounting to a 4% year-over-year improve whereas adj. EPS clocked in at $2.60. Each outcomes beat Road expectations. For the 2023 outlook, the corporate referred to as for income development to be within the 5 to 7% vary whereas it reiterated the F2023 adjusted EPS forecast of $11.45 on the midpoint it set at its June investor day.
This inventory has picked up curiosity from J.P. Morgan’s Lisa Gill, who believes the corporate is about up nicely to cope with the present market atmosphere.
“We stay optimistic on ABC given stable FY22 outcomes and FY23 steerage outlook that provides an inexpensive view right into a difficult atmosphere,” the 5-star analyst defined. “Finally, we consider the U.S. Healthcare Options enterprise is poised for development on the again of robust Rx and specialty volumes (together with oncology and ophthalmology biosimilars), and will proceed to offset FX and inflationary pressures throughout the Worldwide enterprise, which can subside over time… We additionally consider the corporate may very well be a relative secure haven in an unsure financial atmosphere, as we don’t count on an influence to demand for pharmaceuticals in an financial downturn.”
These feedback underpin Gill’s Obese (i.e. Purchase) ranking on ABC shares, whereas her $191 value goal implies one-year share appreciation of ~15%. (To look at Gill’s monitor report, click on right here)
Total, ABC presently has a Sturdy Purchase ranking from the analyst consensus, primarily based on 8 analyst opinions, breaking all the way down to 7 Buys and 1 Maintain. The shares are priced at $165.71 and have a mean value goal of $181.63, suggesting a one-year potential upside of ~10%. (See ABC inventory forecast on TipRanks)
To seek out good concepts for shares buying and selling at engaging valuations, go to TipRanks’ Greatest Shares to Purchase, a newly launched instrument that unites all of TipRanks’ fairness insights.
Disclaimer: The opinions expressed on this article are solely these of the featured analyst. The content material is meant for use for informational functions solely. It is vitally vital to do your personal evaluation earlier than making any funding.
