U.S. stocks sure look less attractive today after the central bank ruled out the possibility of “pausing” just yet. (link)
But there are two “under the radar” stocks that remain worth owning in this environment, says Josh Wein. He’s a Portfolio Manager at Hennessy Funds.
Wein recommends that investors look for valuation, earnings growth, and “stock price momentum” when adjusting their portfolio for the current macro environment.
A name that satisfies those three conditions is Sonoco Products Co (NYSE: SON) – a Hartsville-headquartered international provider of packaging for consumer and industrial companies. On CNBC’s “Worldwide Exchange”, Wein said:
Sonoco Products is just very slow and steady, wins the race. Great cash flow generation, less than ten times earnings. There’s a lot of visibility, a lot of stability in their business model.
“SON” is currently trading around the same price at which it started the year 2022.
Another one of the little-known names that he finds attractive for the current environment is Super Micro Computer Inc (NASDAQ: SMCI) that reported market-beating results for its fiscal first quarter just yesterday.
It’s the low margin equipment side of technology. Again, less than ten times earnings. We’re seeing revenue acceleration. They’re expanding their capacity and they sell servers and storage products.
“SMCI” has so far defied the ongoing sell-off in tech at large. Its shares are up about 75% year-to-date.
Wein’s outlook is in line with Wall Street that also recommends you invest in this stock and sees upside in it to $98 on average – up another 20% from here.
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