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2 Stocks Investors Should Load up on Before 2022 Ends

The stock market is experiencing high volatility amid the Fed’s campaign against inflation and rising recession odds. However, chances remain that the Fed might pull off a soft landing. We think it could be the right time to buy fundamentally solid stocks AT&T (T) and Gilead Sciences (GILD). Read on…

The Fed raised benchmark interest rates by another 75-bps last week and hinted at smaller increases ahead. Moreover, the October jobs report came in stronger than expected, with nonfarm payrolls growing by 261,000 against the Dow Jones estimate of 205,000. The stock market rejoiced on the release, while Treasury yields also were higher.

On the other hand, despite significant macroeconomic headwinds, President Joe Biden sees “bright spots” where the country is rebounding. “Folks, our economy continues to grow and add jobs even as gasoline prices continue to come down,” he said. Moreover, Goldman Sachs believes the Federal Reserve can still pull off a soft landing for the U.S. economy.

Given the backdrop, it could be wise to load up on quality stocks AT&T Inc. (T) and Gilead Sciences, Inc. (GILD) now.

AT&T Inc. (T)

T provides telecommunications, media, and technical services worldwide. The company operates through the Communications and Latin America segments.

T’s total operating expenses declined 4.2% year-over-year to $24.03 billion for the fiscal third quarter ended September 30, 2022. Net income attributable to T increased 1.8% year-over-year to $6.03 billion. Moreover, its adjusted EPS increased by 3% year-over-year to $0.68.

Analysts expect T’s revenue for the fiscal quarter ending June 2023 to increase 1.6% year-over-year to $30.13 billion. Its EPS for the same period is expected to rise marginally year-over-year to $0.66.

In terms of its forward Price/Sales, T is currently trading at 1.04x, 13.3% lower than the industry average of 1.20x. Its forward P/E multiple of 7.32 is 54.9% lower than the industry average of 16.23.

The stock has gained 22.9% over the past month to close the last trading session at $18.36. 

T has an overall B rating, which equates to a Buy in our POWR Ratings system. The POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted to an optimal degree.

T also has a B grade for Value, Quality, and Sentiment. It is ranked #4 out of 20 stocks in the Telecom – Domestic industry. 

Click here to access T’s Growth, Momentum, and Stability ratings.

Gilead Sciences, Inc. (GILD)

GILD operates as a biopharmaceutical company that discovers, develops, and commercializes medicines for unmet medical needs in the United States, Europe, and internationally.

On November 2, GILD announced that the U.S. Food and Drug Administration (FDA) approved the supplemental new drug application for Vemlidy® (tenofovir alafenamide) as a treatment for chronic hepatitis B virus (HBV) infection and compensated liver disease. This marks a significant milestone for the company.

For the fiscal third quarter that ended September 30, GILD’s total revenues came in at $7.04 billion. The company generated $2.9 billion in operating cash flow in the same period. Moreover, its non-GAAP EPS stood at $1.90.

Street expects GILD’s EPS for the fiscal fourth quarter ending December 2022 to come in at $1.49, indicating an increase of 116.6% year-over-year. The company also beat the consensus EPS estimates in three of the trailing four quarters.

GILD’s forward P/E multiple of 23.33 is 3% lower than the industry average of 24.05. In terms of its forward EV/EBIT, the stock is trading at 9.75x, 40.2% lower than the industry average of 16.29x.

GILD’s stock has gained 22.8% over the past year and 12.2% year-to-date to close the last trading session at $81.46.

It is no surprise that the stock has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. GILD also has an A grade for Sentiment and a B for Quality and Value. Within the 387-stock Biotech industry, it is ranked #3.

Beyond what is stated above, we have also given GILD grades for Growth, Momentum, and Stability. Get access to all GILD ratings here.

T shares were trading at $18.64 per share on Tuesday afternoon, up $0.28 (+1.53%). Year-to-date, T has gained 7.17%, versus a -18.04% rise in the benchmark S&P 500 index during the same period.

About the Author: Komal Bhattar

Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.


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