Performance Recap
The ProPicks Top Value Stocks strategy delivered an astounding 629.29% return in February, significantly outperforming major benchmark indices. In comparison, the S&P 500 (SPX) gained 2.08%, the Dow Jones Industrial Average (DJI) rose 1.23%, and the Nasdaq-100 (NDX) declined 4.62% over the same period.
[Chart: 1 | Strategy Return vs. Benchmarks]
The strategy's three-month return of 10.1% also outpaced the SPX's 9.94% gain, the DJI's 4.98% increase, and the NDX's 3.12% loss.
Several holdings delivered exceptional returns in February:
1. Vistra Corp. (VST) - Monthly Return: 31.70%
2. Williams-Sonoma, Inc. (NYSE:WSM) - Monthly Return: 33.08%
3. EMCOR Group, Inc. (EME) - Monthly Return: 10.90%
4. MGM Resorts International (NYSE:MGM) - Monthly Return: 11.22%
5. DaVita Inc . (NYSE:DVA) - Monthly Return: 8.60%
[Chart: 2 | Monthly return of each stock from last month]
New Additions
The Top Value Stocks strategy added ten new holdings in March, each presenting compelling value propositions:
1. The Gap, Inc. (NYSE:GPS)
- Description: The Gap is a leading global retailer offering clothing, accessories, and personal care products for men, women, and children.
- 1 Month Price Total Return: 42.97%
- 1 Year Price Total Return: 186.17%
- Market Cap (Adjusted): $10.18B
- Basic EPS (Cont. Ops): $1.36
- Basic EPS Growth: 346.50%
- P/E Ratio: 20.28
- Analyst Outlook: The Gap's strong earnings growth and attractive valuation make it a compelling value play. The company's ongoing restructuring efforts and e-commerce focus could drive further upside. However, risks include intense competition and potential margin pressure.
2. Tenet Healthcare Corporation (NYSE:THC)
- Description: Tenet Healthcare is a diversified healthcare services company operating hospitals, outpatient centers, and other healthcare facilities.
- 1 Month Price Total Return: 10.71%
- 1 Year Price Total Return: 75.68%
- Market Cap (Adjusted): $10.44B
- Basic EPS (Cont. Ops): $6.01
- Basic EPS Growth: 56.40%
- P/E Ratio: 17.08
- Analyst Outlook: Tenet's solid earnings growth, reasonable valuation, and potential benefits from healthcare reforms make it an attractive value opportunity. The company's focus on cost management and growth in higher-margin businesses could drive further upside. Risks include regulatory uncertainties and potential margin pressure.
3. Cincinnati Financial Corporation (NASDAQ:CINF)
- Description: Cincinnati Financial is an insurance holding company providing property and casualty insurance products.
- 1 Month Price Total Return: 8.33%
- 1 Year Price Total Return: 12.16%
- Market Cap (Adjusted): $19.14B
- Basic EPS (Cont. Ops): $11.74
- Basic EPS Growth: 482.78%
- P/E Ratio: 10.39
- Analyst Outlook: Cincinnati Financial's impressive earnings growth, low valuation, and strong market position make it a compelling value play. The company's disciplined underwriting and investment approach could drive further upside. Risks include potential catastrophe losses and interest rate sensitivity.
4. Core & Main, Inc. (CNM)
- Description: Core & Main is a leading specialized distributor of water, wastewater, storm drainage, and fire protection products in the United States.
- 1 Month Price Total Return: 16.97%
- 1 Year Price Total Return: 147.97%
- Market Cap (Adjusted): $11.53B
- Basic EPS (Cont. Ops): $2.15
- Basic EPS Growth: -0.60%
- P/E Ratio: 29.67
- Analyst Outlook: Core & Main's strong market position, growth potential in infrastructure spending, and attractive valuation make it a compelling value opportunity. The company's focus on operational efficiency and acquisitions could drive further upside. Risks include potential slowdown in construction activity and integration challenges.
5. Cognizant Technology Solutions Corporation (NASDAQ:CTSH)
- Description: Cognizant is a leading provider of information technology, consulting, and business process services.
- 1 Month Price Total Return: -8.73%
- 1 Year Price Total Return: 19.76%
- Market Cap (Adjusted): $35.72B
- Basic EPS (Cont. Ops): $4.21
- Basic EPS Growth: -4.77%
- P/E Ratio: 16.80
- Analyst Outlook: Cognizant's attractive valuation, strong market position, and potential benefits from digital transformation make it a compelling value play. The company's focus on high-growth areas like cloud and data could drive further upside. Risks include potential slowdown in IT spending and competition.
6. Exxon Mobil Corporation (NYSE:XOM)
- Description: Exxon Mobil is one of the world's largest publicly traded international oil and gas companies.
- 1 Month Price Total Return: 10.53%
- 1 Year Price Total Return: 10.50%
- Market Cap (Adjusted): $464.20B
- Basic EPS (Cont. Ops): $8.89
- Basic EPS Growth: -32.96%
- P/E Ratio: 12.89
- Analyst Outlook: Exxon's attractive valuation, strong balance sheet, and potential benefits from higher oil prices make it a compelling value opportunity. The company's investments in low-cost production and clean energy could drive further upside. Risks include potential volatility in oil prices and the energy transition.
7. The Kroger Co . (NYSE:KR)
- Description: Kroger is one of the largest grocery retailers in the United States, operating supermarkets, multi-department stores, and fuel centers.
- 1 Month Price Total Return: 15.93%
- 1 Year Price Total Return: 18.26%
- Market Cap (Adjusted): $41.00B
- Basic EPS (Cont. Ops): $3.01
- Basic EPS Growth: -4.42%
- P/E Ratio: 18.95
- Analyst Outlook: Kroger's attractive valuation, strong market position, and potential benefits from consumer spending make it a compelling value play. The company's focus on digital initiatives and cost management could drive further upside. Risks include intense competition and potential margin pressure.
8. Jabil Inc. (JBL)
- Description: Jabil is a leading provider of manufacturing services and solutions for electronics, healthcare, automotive, and other industries.
- 1 Month Price Total Return: -7.86%
- 1 Year Price Total Return: 54.28%
- Market Cap (Adjusted): $17.30B
- Basic EPS (Cont. Ops): $11.64
- Basic EPS Growth: 64.92%
- P/E Ratio: 11.46
- Analyst Outlook: Jabil's strong earnings growth, attractive valuation, and potential benefits from supply chain diversification make it a compelling value opportunity. The company's focus on high-growth areas like healthcare and 5G could drive further upside. Risks include potential slowdown in end-markets and competition.
9. NetApp, Inc. (NASDAQ:NTAP)
- Description: NetApp is a leading provider of cloud data services and data management solutions.
- 1 Month Price Total Return: -0.26%
- 1 Year Price Total Return: 69.01%
- Market Cap (Adjusted): $21.68B
- Basic EPS (Cont. Ops): $4.47
- Basic EPS Growth: -23.89%
- P/E Ratio: 23.06
- Analyst Outlook: NetApp's attractive valuation, strong market position in cloud data services, and potential benefits from digital transformation make it a compelling value play. The company's focus on hybrid cloud and all-flash arrays could drive further upside. Risks include competition and potential slowdown in IT spending.
10. Omnicom Group Inc. (NYSE:OMC)
- Description: Omnicom is a leading global advertising, marketing, and corporate communications company.
- 1 Month Price Total Return: 10.03%
- 1 Year Price Total Return: 5.74%
- Market Cap (Adjusted): $19.05B
- Basic EPS (Cont. Ops): $6.98
- Basic EPS Growth: 8.98%
- P/E Ratio: 13.69
- Analyst Outlook: Omnicom's attractive valuation, strong market position, and potential benefits from the recovery in advertising spend make it a compelling value opportunity. The company's focus on digital transformation and data analytics could drive further upside. Risks include potential slowdown in economic growth and competition.
Portfolio Updates
The Top Value Stocks strategy made several adjustments to its holdings in March, reflecting the dynamic nature of the value investing landscape.
Removed Stocks:
1. Humana Inc . (NYSE:HUM) - Monthly Return: 0.09%
2. Booking Holdings Inc. (NASDAQ:BKNG) - Monthly Return: 2.24%
3. Coupang, Inc. (CPNG) - Monthly Return: -3.96%
4. QUALCOMM Incorporated (NASDAQ:QCOM) - Monthly Return: 5.29%
5. EMCOR Group, Inc. (EME) - Monthly Return: 10.90%
6. UnitedHealth Group Incorporated (NYSE:UNH) - Monthly Return: 0.43%
7. The Hartford Financial Services Group, Inc. (NYSE:HIG) - Monthly Return: 8.51%
8. American Express Company (NYSE:AXP) - Monthly Return: 3.62%
9. DaVita Inc. (DVA) - Monthly Return: 8.60%
10. Molina Healthcare, Inc. (NYSE:MOH) - Monthly Return: 4.39%
Continue Holding:
1. Charter Communications , Inc. (NASDAQ:CHTR) - Monthly Return: -3.07%
- Description: Charter Communications is a leading broadband connectivity and cable operator in the United States, providing services under the Spectrum brand.
- Market Cap (Adjusted): $45.89B
- Basic EPS (Cont. Ops): $30.54
- Basic EPS Growth: -2.42%
- P/E Ratio: 9.00
- Analyst Outlook: Charter's attractive valuation, strong market position, and potential benefits from the growth in broadband services make it a compelling value play. The company's focus on network expansion and operational efficiency could drive further upside. Risks include potential regulatory pressures and competition.
2. Expedia Group, Inc. (NASDAQ:EXPE) - Monthly Return: -2.65%
- Description: Expedia is one of the world's leading travel companies, providing travel booking services for leisure and business trips.
- Market Cap (Adjusted): $18.16B
- Basic EPS (Cont. Ops): $5.50
- Basic EPS Growth: 144.70%
- P/E Ratio: 22.78
- Analyst Outlook: Expedia's strong earnings growth, attractive valuation, and potential benefits from the recovery in travel demand make it a compelling value opportunity. The company's focus on cost management and market share gains could drive further upside. Risks include potential slowdown in travel demand and competition.
3. United Therapeutics Corporation (NASDAQ:UTHR) - Monthly Return: -1.58%
- Description: United Therapeutics is a biotechnology company focused on developing and commercializing innovative therapies for chronic and life-threatening conditions.
- Market Cap (Adjusted): $10.74B
- Basic EPS (Cont. Ops): $21.04
- Basic EPS Growth: 31.64%
- P/E Ratio: 10.91
- Analyst Outlook: United Therapeutics' strong earnings growth, attractive valuation, and potential benefits from its pipeline of innovative therapies make it a compelling value play. The company's focus on pulmonary arterial hypertension and other rare diseases could drive further upside. Risks include potential regulatory setbacks and competition.
4. Williams-Sonoma, Inc. (WSM) - Monthly Return: 33.08%
- Description: Williams-Sonoma is a leading specialty retailer of high-quality home products, offering cookware, furniture, home décor, and more through its brands.
- Market Cap (Adjusted): $20.20B
- Basic EPS (Cont. Ops): $14.71
- Basic EPS Growth: -11.30%
- P/E Ratio: 21.27
- Analyst Outlook: Williams-Sonoma's strong market position, attractive valuation, and potential benefits from the growth in home goods spending make it a compelling value opportunity. The company's focus on e-commerce and digital initiatives could drive further upside. Risks include potential slowdown in consumer spending and competition.
5. Vistra Corp. (VST) - Monthly Return: 31.70%
- Description: Vistra is a leading integrated retail electricity and power generation company, serving customers across 20 states in the U.S.
- Market Cap (Adjusted): $24.88B
- Basic EPS (Cont. Ops): $3.63
- Basic EPS Growth: 211.42%
- P/E Ratio: 18.53
- Analyst Outlook: Vistra's strong earnings growth, attractive valuation, and potential benefits from the growth in electricity demand make it a compelling value play. The company's focus on renewable energy and battery storage could drive further upside. Risks include potential regulatory pressures and commodity price volatility.
6. MGM Resorts International (MGM) - Monthly Return: 11.22%
- Description: MGM Resorts is a leading global hospitality and entertainment company, operating destination resorts, casinos, and entertainment venues.
- Market Cap (Adjusted): $15.15B
- Basic EPS (Cont. Ops): $3.22
- Basic EPS Growth: -8.46%
- P/E Ratio: 13.24
- Analyst Outlook: MGM's attractive valuation, strong market position, and potential benefits from the recovery in travel and entertainment make it a compelling value opportunity. The company's focus on cost management and growth initiatives could drive further upside. Risks include potential slowdown in consumer spending and competition.
7. PayPal Holdings, Inc. (NASDAQ:PYPL) - Monthly Return: 7.42%
- Description: PayPal is a leading digital payments company, enabling digital and mobile payments on behalf of consumers and merchants worldwide.
- Market Cap (Adjusted): $69.70B
- Basic EPS (Cont. Ops): $3.85
- Basic EPS Growth: 83.64%
- P/E Ratio: 16.41
- Analyst Outlook: PayPal's strong earnings growth, attractive valuation, and potential benefits from the growth in e-commerce and digital payments make it a compelling value play. The company's focus on product innovation and partnerships could drive further upside. Risks include potential regulatory pressures and competition.
8. Tapestry, Inc. (NYSE:TPR) - Monthly Return: 2.63%
- Description: Tapestry is a leading New York-based house of modern luxury accessories and lifestyle brands, including Coach , Kate Spade, and Stuart Weitzman.
- Market Cap (Adjusted): $11.03B
- Basic EPS (Cont. Ops): $4.02
- Basic EPS Growth: 18.91%
- P/E Ratio: 11.88
- Analyst Outlook: Tapestry's attractive valuation, strong brand portfolio, and potential benefits from the recovery in consumer spending make it a compelling value opportunity. The company's focus on digital initiatives and international expansion could drive further upside. Risks include potential slowdown in luxury spending and competition.
9. Discover Financial Services (NYSE:DFS) - Monthly Return: 7.09%
- Description: Discover Financial Services is a leading direct banking and payment services company, offering credit cards, personal loans, student loans, and more.
- Market Cap (Adjusted): $32.42B
- Basic EPS (Cont. Ops): $11.26
- Basic EPS Growth: -27.25%
- P/E Ratio: 11.34
- Analyst Outlook: Discover's attractive valuation, strong market position, and potential benefits from
Monthly News Highlights
Charter Communications, Inc. (NasdaqGS:CHTR)
- On March 18, Bernstein upgraded Charter Communications stock from 'Market Perform' to 'Outperform', with a new price target of $370.00, indicating a potential 25% upside. The firm believes that the risks have already been factored into Charter's current valuation and expects a significant recovery as identified risks evolve throughout 2024 and into 2025. Read more
- On March 7, Charter Communications and The Walt Disney Company (NYSE:DIS) announced that ESPN+ is now available to Spectrum TV Select Plus customers at no additional cost. This move aims to make streaming apps part of linear Spectrum TV bundle packages, providing a comprehensive entertainment solution for Spectrum customers. Read more
Expedia Group, Inc. (NasdaqGS:EXPE)
- On March 14, Ascendiant Capital analysts lowered the price target on Expedia to $160.00 while maintaining a Buy rating following the company's fiscal Q4 2023 results. Expedia reported revenue of $2,887 million and pro forma EPS of $1.72, beating estimates. The company provided initial 2024 guidance for revenue growth of +10% and improved EBITDA margins. Read more
- On March 19, a Jefferies analyst maintained a 'hold' rating on Expedia with a price target of $145.00, down from the previous target of $150.00. According to Investing Pro, Expedia's fair value is estimated to be $161.28 with a medium degree of uncertainty attached to it. Read more
United Therapeutics Corporation (NasdaqGS:UTHR)
- On March 25, United Therapeutics announced a stock repurchase program of up to $1 billion. The company will enter into an Accelerated Share Repurchase (ASR) agreement with Citibank to facilitate the repurchase, with settlement expected in Q2 and Q3 2024. Read more
- On March 7, Wells Fargo maintained its "overweight" rating for United Therapeutics, with a price target of $325.00, an increase from the previous price target of $309.00. According to Investing Pro, the fair value for United Therapeutics is estimated to be $287.11 with a potential upside of 21.16%. Read more
Williams-Sonoma, Inc. (NYSE:WSM)
- On March 13, shares of Williams-Sonoma surged 19.1% after the company reported better-than-expected fourth-quarter results, with revenue and EPS exceeding Wall Street's expectations. The positive results also led to an increase in the company's quarterly dividend by 26% and share repurchase capacity to $1 billion. Read more
- On March 11, RBC Capital raised its stock price target for Williams-Sonoma to $261 from $165, following the company's strong fourth-quarter performance and stable demand outlook. RBC Capital expects stable demand for Williams-Sonoma with flat net revenue growth in 2024, while management is expected to set an operating margin guidance of around 15%. Read more
The Gap, Inc. (NYSE:GPS)
- On March 7, Gap Inc. reported better-than-expected earnings and revenue for fiscal Q4 2023, leading to a 9% increase in its stock price. The company expects net sales for the first quarter of 2024 to be roughly flat but anticipates an increase in gross margin by at least 100 basis points during that period. Read more
- On March 7, Gap reported better-than-expected sales for the fourth quarter, driven by strong demand for its Old Navy and namesake brands during the holiday season. Fourth-quarter comparable sales at Gap increased by 4%, while Old Navy saw a 2% increase. Read more
Tenet Healthcare Corporation (NYSE:THC)
- On March 27, Wolfe Research upgraded its rating on Tenet Healthcare stock from Peer Perform to Outperform and set a price target of $122. The firm cited the potential upside from an increase in Michigan supplemental Medicaid payments expected in 2024, as well as Tenet's ongoing efforts to reduce debt. Read more
- On March 28, Tenet Healthcare Corporation announced that it will be reporting its first quarter 2024 results on April 30th. The results will be released no later than 6:00 a.m. Central Time (CT), followed by a conference call at 9:00 a.m. CT (10:00 a.m. Eastern Time). Read more
Vistra Corp. (NYSE:VST)
- On March 14, Bank of America Securities raised its price target for Vistra Energy (NYSE:VST) to $70.00 from $52.00, while maintaining a Buy rating on the stock. The firm anticipates that increasing demand for power from data centers will result in higher power prices and margins for incumbent generators, leading to further financial upside. Read more
- On March 26, Morgan Stanley maintained its "overweight" rating for Vistra Energy, with a price target of $78.00, an increase from the previous price target of $62.00. According to Investing Pro, the fair value for Vistra Energy is estimated to be $82.52 with a medium degree of uncertainty attached to it. Read more
MGM Resorts International (NYSE:MGM)
- On March 25, MGM Resorts International announced plans to offer $750 million in senior notes due 2032. The proceeds from the offering will be used to repay existing debts, including the company's 6.750% senior notes due in 2025. Read more
PayPal Holdings, Inc. (NasdaqGS:PYPL)
- On March 7, PayPal announced that Tap to Pay on iPhone is now available for all Venmo business profile and PayPal Zettle users in the U.S. This feature allows businesses to accept contactless card and digital wallet payments directly on their iPhones at no additional cost or hardware. Read more
Cincinnati Financial Corporation (NasdaqGS:CINF)
- On March 25, BMO Capital Markets upgraded its rating on Cincinnati Financial shares from Market Perform to Outperform, with a price target of $135. The firm expects the company's performance metrics to improve in the coming years as it incorporates additional excess IBNR reserves into its existing reserves. Read more
- On March 13, CFRA raised the stock price target of Cincinnati Financial to $135 from $122 and maintained a Buy rating on the shares. The revised target is based on an improved valuation of Cincinnati Financial's shares at 19.4 times projected operating earnings per share (EPS) for 2025, which was also revised upward by $0.10 to $6.95. Read more
Tapestry, Inc. (NYSE:TPR)
- On March 8, EU antitrust regulators announced they will make a decision by April 15 on whether to approve Tapestry's $8.5 billion acquisition of Capri Holdings (NYSE:CPRI), the owner of Michael Kors. The deal would create a major American fashion company that could compete with European rivals like LVMH (EPA:LVMH) in the luxury market. Read more
Discover Financial Services (NYSE:DFS)
- On March 21, HSBC raised its price target for Discover Financial Services to $144.00 from $107.00 following the announcement of Capital One's proposed acquisition of Discover Financial. The new price target is based on the exchange ratio detailed in the acquisition terms, which offers 1.0192 Capital One shares for each share of Discover. Read more
- On March 21, Capital One argued in its regulatory application that its $35.3 billion merger with Discover Financial will increase competition and be beneficial for financial stability, according to sources familiar with the matter. Read more
Core & Main, Inc. (NYSE:CNM)
- On March 19, Core & Main reported record net sales of over $6.7 billion for fiscal year 2023 in its latest earnings call. The company also achieved an adjusted EBITDA of $910 million and a record operating cash flow of approximately $1.1 billion. Looking ahead to the future, Core & Main aims to reach $10 billion in net sales by 2028 through organic growth, margin expansion, and strategic mergers and acquisitions. Read more
- On March 20, Barclays raised its stock price target for Core & Main Inc. to $65 from $49, maintaining an Overweight rating on the company. Barclays believes that Core & Main's strong growth prospects, driven by strategic mergers and acquisitions, better than expected organic growth, and resilient gross margins, make it a strong performer in its industry. Read more
Cognizant Technology Solutions Corporation (NasdaqGS:CTSH)
- On March 19, Cognizant announced a partnership with NVIDIA (NASDAQ:NVDA) to apply generative AI (gen AI) technology for drug discovery in the life sciences industry. By leveraging gen AI technologies, researchers can quickly analyze extensive datasets, predict interactions between drug compounds more accurately, and create new pathways for drug development. Read more
- On March 21, Cognizant and Google (NASDAQ:GOOGL) Cloud expanded their partnership to enhance software delivery and accelerate developer productivity. Cognizant will adopt Gemini for Google Cloud, training its associates to use the AI-powered tool for software development assistance. The collaboration aims to deliver benefits across industries by helping enterprise clients build applications quickly, rigorously test code, and optimize performance throughout the software delivery lifecycle. Read more
Exxon Mobil Corporation (NYSE:XOM)
- On March 5, commodity trading firm Vitol was reportedly close to acquiring Exxon and Qatarenergy's stakes in an LNG terminal in Italy, according to sources. The deal would give Vitol a significant presence in the European gas market as it seeks to expand its energy portfolio. Read more
- On March 8, Chevron (NYSE:CVX) CEO Michael Wirth faced challenges with his $53 billion bid for Hess (NYSE:HES) and its stake in Guyana's oil hotspot. Exxon Mobil filed an arbitration claim that could block the proposed merger between Hess and Chevron, claiming a right of first refusal to any sale of Hess' Guyana oil assets. Read more
The Kroger Co. (NYSE:KR)
- On March 7, Kroger forecasted annual sales and profit above Wall Street estimates for 2024 due to higher demand for groceries. The company's shares rose over 5% in premarket trading following the announcement. Kroger has benefited from increased customer visits and its online business, with investments in delivery services boosting sales. Read more
- On March 8, BofA Securities raised its price target for Kroger Co from $55 to $70 following the supermarket chain's strong Q4 earnings. The new target reflects a valuation of approximately 15 times the projected adjusted earnings per share (EPS) for fiscal year 2026, estimated at $4.55. Read more
Jabil Inc. (NYSE:JBL)
- On March 12, JPMorgan maintained its Overweight rating on Jabil, a manufacturing solutions company, with a price target of $155. The firm's analyst noted that while there may be a reduction in revenue for FY24 due to weakness in several end-markets, Jabil's focus on the Cloud segment has led to strong performance so far this year. Read more
- On March 15, Jabil Inc. reported its second-quarter fiscal year 2024 earnings, meeting its revenue guidance with approximately $6.8 billion. The company saw a year-over-year increase in core operating income to $338 million and successfully divested its mobility business for $2.2 billion. Despite a downturn in the 5G and renewable energy markets, Jabil is optimistic about growth in electric
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