10 Solid Picks For A Rocky Market - Zen Investor

PUBLISHED Sep 12, 2022, 5:11:51 PM        SHARE

img
imgzen investor blog

Using the screening tools available in StockRover, I searched for companies that are inexpensive relative to their fair value (margin of safety) and have above-average price and earnings growth prospects.

Starting with a universe of 2,500 US listed names, I kept raising the bar until I whittled the list down to just ten finalists. All 10 have outperformed the S&P 500 over the past 5 years and they all have above-average ROIC compared to their industry peers.

The idea was to find high quality companies that can weather the market storm we are in today. If the market continues to decline from here, many of these stocks will also decline. But having a margin of safety and solid growth prospects should help these companies weather the storm better than most.

I begin with a brief description of each company, along with their StockRover profile. At the end of the article, I have a table that summarizes all of the metrics I used in the screening process for easy comparison.

AAP - Advance Auto Parts

Advance Auto Parts is one of the largest retailers of aftermarket automotive parts, tools, and accessories in North America. At today’s price of $172.15, it has a 12% margin of safety based on consensus fair value of $192.46. The average 12 month price target for AAP is $217.67, giving it a 26.4% upside. It pays a 3.5% dividend.

AAP profile

AMAT - Applied Materials

Applied Materials is the world's largest supplier of semiconductor manufacturing equipment. It has a 38% margin of safety and a 12 month upside target of 46.3%. It pays a 1.1% dividend.

AMAT profile

ARCB - ArcBest

ArcBest Corp is engaged in freight transportation and logistics operations. It has a margin of safety of 40% and a 12 month upside target of 56%. ARCB pays a 0.6% dividend.

ARCB profile

BLDR - Builders FirstSource

Builders FirstSource Inc. is a manufacturer and supplier of building materials. It has a 44% margin of safety and a 56% upside target. This company does not pay a dividend.

BLDR profile

DQ - Daqo New Energy

Daqo New Energy Corp is a polysilicon manufacturer based in China. At today’s price of $68.28, it has a 35% margin of safety based on consensus fair value of $92.29. The average 12 month price target for DQ is $76.98, giving it a 12.7% upside. The company does not pay a dividend.

DQ profile

MLI - Mueller Industries

Mueller Industries makes copper, brass, aluminum, and plastic products. It has a margin of safety of 18% and a 12 month upside target of 98%. It pays a 1.6% dividend.

MLI profile

MRO - Marathon Oil

Marathon Oil is an independent exploration and production company primarily focusing on unconventional resources in the United States. It has a 23% margin of safety and a 12 month upside target of 18%. It pays a 1.3% dividend.

MRO profile

MSFT - Microsoft

Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. It is the second largest company in the US, after Apple, Inc. It has a 11% margin of safety and a 27% 12 month upside target. It pays a 1% dividend.

MSFT profile

VLO - Valero Energy

Valero Energy is one of the largest independent refiners in the United States. It has a 31% margin of safety, and a 30% upside price target. It pays a 3.5% dividend.

VLO profile

WFG - West Fraser Timber

West Fraser Timber produces lumber, engineered wood products (plywood, and particleboard), pulp, newsprint, wood chips, and renewable energy. It has a 30% margin of safety and a 55% upside target. It pays a 1.4% dividend.

WFG profile

Summary table showing the key metrics for each of these ten stocks.

9-2 key metrics table

As always, do your own research before making any trading decisions. Treat this as a watchlist rather than a blanket endorsement.

Originally Posted on zeninvestor.org

AAP, Buy

Advance Auto Par...
Return: -75.51%

AAP, Buy

Return: -75.51%


Sound investments
don't happen alone

Find your crew, build teams, compete in VS MODE, and identify investment trends in our evergrowing investment ecosystem. You aren't on an island anymore, and our community is here to help you make informed decisions in a complex world.

More Reads
September 2022 Stock Considerations
Image

With the start of a new trading month, it is time, once again, for me to highlight some of my potential stock buys for September. With all the recent market volatility there is no shortage of stocks that are looking seemingly cheaper when compared to the closing months of 2021.

Monthly Dividend Stock In Focus: Prospect Capital
Image

Business Development Companies — or BDCs, for short — allow investors to generate income with the potential for robust total returns while minimizing the amount of tax that is paid at the corporate level.

The 5 Best Cheap Stocks To Buy Now
Image

Everyone loves to buy something on sale. For investors, that means finding undervalued stocks. Although available during bull markets, investors usually find more cheap stocks during bear markets. Prices drop, sometimes falling too far, making some stocks a deal, like in 2022. Hence, now is a good time for investors to scour lists and find the best cheap stocks to buy.

Do great stocks go on sale during a down market?
Image

Do great stocks go on sale during a down market? The short answer is: yes!

How to Double Your Returns by Actually Using Simple Strategies
Image

They say the internet changed everything. Well, finally, that change has come to basic investing. It is now easy to double your returns from just a decade ago.

Dividend Stock Watch List: Lanny’s September 2022 Edition
Image

Welcome back to another dividend stock watch list article! The stock market took a nose dive on August 26th, shedding over 3% in some instances on the overall valuation of the stock market.

3 Beaten-Down Dividend Growers for Income Investors
Image

The bear market in 2022 has provided opportunities to buy solid companies at a discount. Fears about a recession and rising interest rates have punished equities.

Kilroy Realty (KRC): Undervalued REIT and 4.2% Yield
Image

The markets had a wild ride down on Friday (8/26/2022). The SPDR S&P 500 ETF (SPY) saw a 14-point drop, about a 3.4% decline in a single trading day.

NextEra Energy Stock Dividend and Forecast
Image

NextEra Energy Stock remained stable during the June lows and the growth in dividend is expected to grow annually by 10% through 2024.

The 3 Highest Yielding Dividend Aristocrats
Image

Investors that want reliable income and ongoing dividend increases to offset inflation may be very interested in the Dividend Aristocrats.

Recent Stock Purchase II August 2022
Image

With August ending and the markets giving us better buying opportunities, I decided to add to some of my existing positions.

2022 Tobacco Stocks List | The 6 Best Now, Ranked In Order
Image

As a business owner, selling products that have high profit margins along with strong brand awareness and an exceptionally loyal customer base is strongly desirable.

Meta Stock: An Attractive Valuation
Image

According to the long-term forecasts, the worth of Meta's stock will be $272 at the end of 2022 and $360 in 2023.

Growth Investing in American Express Stock
Image

American Express Company is a payment card services provider with world-class products and services. The company has thrived over the years by providing excellent access to products, insights and experiences for their customers.

What Will Microsoft Stock Be Worth in 10 Years?
Image

Microsoft stock has rewarded its shareholders with more than 700% return over the past ten years. It will continue to grow over the next decade as well.

The Best Oil Refiner: Analyzing The Big 4 U.S. Oil Refiner Stocks
Image

Oil refiners have enjoyed an impressive rally since the start of 2021, thanks to the recovery of global consumption of oil products from the pandemic.

Recent Stock Purchase August 2022
Image

How has your summer been going? For me, it is more of the same which simply means making a monthly stock purchase and staying invested no matter how ugly the world economy is looking.

Top 5 Foundation Dividend Stocks for ANY Portfolio [October 2020 Update]
Image

Hey everyone! I was sitting at my kitchen table doing an intense round of push-ups, reading articles and had a thought. I would love to share my point of view on the top 5 foundation dividend stocks that every beginning investor should own.

eBay (EBAY) Stock – A Possible Discounted Stock to Bid On?! | Investing for Passive Income
Image

Let’s dive into a selling and re-selling platform that I use almost every single day. We are talking about eBay, not Amazon nor Facebook. I have used eBay as a reselling platform for more than 10 years.

Chevron (CVX) – Oil and Gas Demise Is Overblown
Image

This Chevron Corporation (CVX) post is my third in a series of posts in which I cover an integrated oil and gas producer as well as summarize the overblown expectations of the demise of the oil and gas industry.

Resources for Publishers
Resources for New Investors
Boosted with BossCoin
Financial Literacy Leaders
user_profile
Wise Intelligent
user_profile
Tom Hamilton
user_profile
Mark Robertson
user_profile
Kevin Matthews II
user_profile
Akeiva Ellis
user_profile
Brendan Dale
user_profile
Kenneth Chavis IV
user_profile
Sharita Humphrey