The markets have been volatile since the start of the year due to headwinds that include a geopolitical crisis caused by Russia’s invasion of Ukraine, rising inflation, supply chain constraints, and worries about the Fed’s planned interest rate increases. However, the major U.S. stock indexes rebounded last week as investors took advantage of beaten-down semiconductor chip stocks and big growth stocks. Furthermore, the Fed declared a 25-basis-point increase in interest rates and indicated that it would raise interest rates six more times this year. After an initial decline, equity markets recovered because investors expect the Fed’s interest rate hikes to help the economy rebound over the long term by tamping down inflation.
With equity markets making a comeback, investing in well-established companies with strong financials and promising growth prospects could be rewarding. Furthermore, these companies have managed to withstand the recent market fluctuations and have the potential to rally further in the coming months.
Given their solid fundamentals and growth prospects, we think it advisable to invest in the quality stocks Nutrien Ltd. (NTR), Alpha Metallurgical Resources, Inc. (AMR), and Ryerson Holding Corporation (RYI) that have more room to advance in price in the near term.
Nutrien Ltd. (NTR)
Headquartered in Saskatoon, Canada, NTR provides crop inputs and services. The company operates in four segments: Retail Ag Solutions; Potash; Nitrogen; and Phosphate. NTR distributes crop nutrients, crop protection products, seeds, and merchandise products in the U.S., Canada, South America, and Australia through more than 2,000 retail locations.
On Feb. 16, 2022, NTR declared a $0.48 per share quarterly dividend payable on April 14, 2022. This represents a 4% increase from the prior dividend. NTR launched a new share repurchase program. Its board of directors approved the purchase of 10% of the public float of NTR's common shares over one year.
In its fiscal 2021 fourth quarter, ended Dec.31, 2021, NTR's sales increased 79.3% year-over-year to $7.27 billion. Its gross margin improved 175.2% from the prior-year period to $3.21 billion. The company’s adjusted EBITDA grew 220.7% year-over-year to $2.46 billion. And its net earnings rose 282% year-over-year to $1.21 billion. The company's adjusted net earnings per share rose 929.2% year-over-year to $2.47.
The $7.67 billion consensus revenue estimate for its fiscal year 2022 first quarter, ending March 31, 2022, represents 72.6% year-over-year growth from the same period in 2021. The $2.67 consensus EPS estimate for the current quarter indicates an 821.9% year-over-year rise from the prior-year period. It is no surprise that NTR has surpassed the consensus EPS estimates in three of the trailing four quarters.
Shares of NTR have increased 41.9% in price year-to-date and 95.8% over the past year. It closed yesterday's trading session at $106.69.
NTR's POWR Ratings reflect this promising outlook. It has an overall A grade, which equates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
NTR has an A grade for Growth and Sentiment. It has a B grade for Quality. Within the Agriculture industry, it is ranked #3 of 29 stocks.
To see additional POWR Ratings (Stability, Value, and Momentum) for NTR, click here.
Alpha Metallurgical Resources, Inc. (AMR)
AMR is an American mining company that is based in Bristol, Tenn. It produces, processes, and sells met and thermal coal in Virginia and West Virginia. AMR is primarily engaged in supplying metallurgical products to the steel industry. The company operates more than 20 active mines and eight coal preparation and load-out facilities.
Last December, AMR completed the refinancing of its $155 million asset-based revolving credit facility (ABL). This facility is expected to simplify its balance sheet and strengthen the company financially.
AMR's total revenues increased 155.6% year-over-year to $828.22 million in its fiscal 2021 fourth quarter, ended Dec. 31, 2021. AMR’s income from operations improved 888.7% year-over-year to $275.81 million. Its adjusted EBITDA grew 4,167.6% year-over-year to $315.80 million. Its net income increased 561.9% from its year-ago value to $254.50 million. And AMR’s net income per share rose 543.3% year-over-year to $13.30.
Analysts expect AMR's revenue for its fiscal year 2022 first quarter, ending March 31, 2022, to come in at $944.95 million, representing a 173.4% rise year-over-year. The Street expects the company's EPS for the current quarter to come in at $19.04, representing a 1,163.7% increase year-over-year.
AMR has gained 115.7% year-to-date and 122.1% over the past three months and closed yesterday's trading session at $131.66.
AMR'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.
It has a grade of A for Growth and Momentum. It has a grade of B for Quality, and Value. Within the B-rated Industrial - Services industry, it is ranked #8 of 89 stocks.
To see additional component grades for AMR (Stability and Sentiment), click here.
Click here to check out our Industrial Sector Report for 2022
Ryerson Holding Corporation (RYI)
RYI in Chicago distributes industrial metals in the U.S., Canada, Mexico, and China. The company offers a range of products in carbon steel, aluminum, stainless steel, alloy steel, nickel, and red metals. In addition, it provides various processing services. RYI serves industries that include commercial ground transportation, metal fabrication shops, industrial machinery and equipment manufacturing, agricultural equipment manufacturing, and oil and gas.
This month, RYI acquired all the assets of Apogee Steel Fabrication Incorporated, a sheet metal fabricator based in Mississauga, Ontario, Canada. “We see Apogee strengthening Ryerson's network of value-added service centers in Canada, adding to our processing capabilities and growing our full-service fabrication business,” said Mike Burbach, Chief Operating Officer of Ryerson.
In its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, RYI's revenues increased 79.8% year-over-year to $1.53 billion. The company's adjusted EBITDA, excluding LIFO, grew 610.4% year-over-year to $238.70 million. Its net income attributable to RYI increased 737.1% from the prior-year period to $106.40 million. And RYI's adjusted earnings per share rose 1,676.5% from its year-ago value to $2.68.
The $3.95 consensus EPS estimate for its fiscal year 2022 first quarter, ending March 31, 2022, represents a 1,419.2% year-over-year growth. RYI has surpassed the consensus EPS estimates in three of the trailing four quarters.
RYI stock has improved 41.3% in price year-to-date and 122% over the past year. It closed yesterday's trading session at $36.81.
RYI’s POWR Ratings reflect a strong outlook. The stock has an overall A rating, which translates to Strong Buy in our POWR Ratings system.
RYI has an A grade for Growth and Momentum and B for Sentiment, Quality, and Value. It is ranked #1 of 37 stocks in the Industrial - Metals industry.
Click here to see RYI’s POWR Rating for Stability.
Click here to check out our Industrial Sector Report for 2022
NTR shares were trading at $99.08 per share on Tuesday afternoon, down $7.61 (-7.13%). Year-to-date, NTR has gained 31.76%, versus a -3.36% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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