The disconnect between the stock markets and the real economy witnessed last year has been reversing this year. A fast-paced economic revival has been driving the stock markets, with major benchmark indices hitting their all-time highs. The S&P 500 index hit its 4,249.74 all-time high on June 10, driven by the U.S. House of Representatives’ $547 billion infrastructure stimulus package approval that day. The Dow Jones Industrial Average (DJIA) index crossed 30,000 for the first time in April and hit its 35,091.56 all-time high on May 10. Also, with benchmark Treasury yields currently declining, the tech-savvy Nasdaq Composite is rebounding gradually. The index has gained 7.3% over the past month, and 1.5% over the past five days.
While the markets are still volatile due to rising inflation concerns--consumer prices gained 5% year-over-year in May, their highest gain in nearly 13 years--the Fed believes the prevailing inflation rates to be temporary. Because price levels are expected to stabilize over the long run, the stock market is expected to remain bullish in the near term.
Thus, the prices of top momentum stocks ABB Ltd (ABB), Best Buy Co., Inc. (BBY), and SS&C Technologies Holdings, Inc. (SSNC) are expected to continue ascending in the coming months.
ABB Ltd (ABB)
Headquartered in Switzerland, ABB is a technology driven manufacturer and seller of electrification, industrial automation, and robotics and motion products. The company operates in more than 100 countries through four segments: electrification products, robotics and motion, industrial automation and power grids.
On April 9, ABB launched an approximately $4.30 billion share buyback program for 137 million shares. The repurchase program is aligned with the company’s objective of returning $7.8 billion of cash proceeds to shareholders and optimizing its capital structure.
ABB’s orders increased 6% year-over-year to $7.8 billion in the fiscal first quarter, ended March 31. Its income from operations grew 114% from the year-ago value to $797 million. Its net income attributable to ABB stood at $502 million, up 34% from the same period last year. The company’s EPS increased 41% year-over-year to $0.25.
Analysts expect ABB’s revenues to increase 13.9% year-over-year to $7.01 billion in the current quarter ending June 2021. A $0.33 consensus EPS estimate for the current quarter indicates a 50% improvement year-over-year. The company has an impressive earnings surprise history as well; it beat the consensus EPS estimates in each of the trailing four quarters.
ABB gained 69.5% over the past year, and 23.6% year-to-date. It is currently trading above its 50-day and 200-day moving averages of $33.80 and $30.71, respectively, indicating an uptrend. Moreover, the stock is currently trading 2.1% below its 52-week high of $35.28.
It is no surprise that ABB has an overall rating of A, which equates to Strong Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
ABB has a grade of A for Momentum, and a grade B for Growth, Stability, Sentiment and Quality. It is ranked #8 of 84 stocks in the A-rated Industrial-Machinery industry.
Click here to view additional ABB Ratings and other details.
Click here to check out our Industrial Sector Report for 2021
Best Buy Co., Inc. (BBY)
BBY offers a wide range of technology products, services and solutions in the United States, Canada and Mexico. The company operates in two segments: domestic and international. BBY operates through stores and through its online platform. The company’s brand names include Best Buy, bestbuy.com.ca, bestbuy.com.mx, Best Buy Express, Best Buy Mobile and Geek Squad.
On March 3, BBY introduced its Lively™ Health & Safety Services in Apple watch to benefit older adults. The company also plans to incorporate the Live Agent Assist feature in other digital watches soon. Such collaborations with multiple companies are an indication of BBY’s substantial market share and goodwill in the technology industry.
BBY’s revenue increased 35.9% year-over-year to $11.64 billion in its fiscal 2022 first quarter, ended May 1. Its domestic segment revenue increased 37.0% year-over-year to $10.84 billion, while the revenue from the international segment grew 23% to $796 million, compared to the same period last year. Its operating income grew 235.8% from its year-ago value to $769 million, while its net income improved 274.2% year-over-year to $595 million. The company’s EPS increased 280.3% year-over-year to $2.32.
Analysts expect BBY’s revenues to increase 3.8% year-over-year to $49.08 billion in the current year. A $8.20 consensus EPS estimate for the current year indicates a 3.7% rise compared to the last year. The company has an impressive earnings surprise history as well; it beat the consensus EPS estimates in each of the trailing four quarters.
Shares of BBY have gained 48.2% over the past year, and 14.7% year-to-date. The stock is currently trading above its 200-day moving average $112.75, indicating an overall uptrend. Also, it is currently trading 12.3% below its 52-week high of $128.57.
BBY has an overall rating of A, which equates to Strong Buy in our proprietary POWR Ratings system. The stock has an A grade for Momentum, and a B grade for Value, Sentiment and Quality. BBY is ranked #2 of 37 stocks in the B-rated Specialty Retailers industry.
Beyond what we’ve stated above, we have also rated BBY for Growth and Stability. Click here to view all BBY Ratings.
Click here to checkout our Retail Industry Report for 2021
SS&C Technologies Holdings, Inc. (SSNC)
SSNC is a leading hedge fund and private equity administrator and the world’s largest mutual fund transfer agency. SSNC software products and software-enabled services to financial services and healthcare industries. The company operates in 35 countries.
On June 11, SSNC’s reported that SS&C GlobeOp Hedge Fund Performance Index returned 0.54% for May 2021. The company also stated the Hedge fund flows as measured by the SS&C GlobeOp Capital Movement Index in June advanced to 0.33%. This reflects positive net flows into hedge funds.
On June 9, SSNC announced that its digital analytics platform Singularity signed on more than 50 clients. Singularity’s ability to deliver solutions in complex investment environments should drive its customer base further.
SSNC’s revenues increased 5.1% year-over-year to $1.23 billion in its fiscal first quarter, ended March 31. Its operating income grew 23% from its year-ago value to $269.1 million, while its net income improved 76.3% year-over-year to $174.9 million over the period. The company’s EPS increased 75.7% year-over-year to $0.65.
A $1.21 billion consensus revenue estimate for the current quarter ending June 2021 indicates a 6.20% improvement from the same period last year. Analysts expect the company’s EPS to come in at $1.14 in the current quarter, indicating a 9.6% rise year-over-year. Furthermore, SSNC surpassed the Street’s EPS estimates in each of the trailing four quarters.
SSNC has gained 33% over the past year, and 1.6% year-to-date. It is currently trading above its 50-day and 200-day moving averages of $73.57 and $70.33 respectively, indicating an uptrend. SSNC is currently trading 2.8% below its 52-week high of $75.94.
SSNC has an overall rating of A, which equates to Strong Buy in our proprietary rating system. SSNC has a grade of B for Momentum, Growth, Value, Quality, Sentiment and Stability. It is ranked #2 of 58 stocks in the Software - Business industry.
To see additional SSNC Ratings and other information, click here.
Click here to check out our Software Industry Report for 2021
ABB shares were trading at $34.53 per share on Monday afternoon, down $0.02 (-0.06%). Year-to-date, ABB has gained 25.54%, versus a 13.62% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
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