2 "Perfect 10" stocks to be thankful for this Thanksgiving

It’s been a tough year for investors. Inflation numbers may have eased in October, but it was still 7.7% compared to 6.2% last October, and that’s too high. Interest rates are rising quickly in response, making capital more expensive, and available cash is chasing commodities constrained by tight supply chains and ongoing COVID-19 lockdowns in China. Food and energy prices are high and likely to rise as Russia’s war in Ukraine puts a severe squeeze on global supplies of natural gas, wheat and cooking oil. No wonder stock markets are highly volatile, making it increasingly difficult for investors to predict what’s next.

But even with all these headwinds, there are stocks we can be thankful for this Thanksgiving holiday season. These are proven market indicators, stocks that have delivered steady returns to investors despite all the challenges 2022 has thrown at the markets.

The positive qualities of these winning stocks are reflected in their smart performance. The Smart Score on TipRanks takes the collected data for each stock and aggregates it into 8 separate categories, each of which is known to correlate with positive stock performance in the future. Smart Score gives each stock a single-digit score on a scale of 1 to 10, making it easy to determine at a glance the stock’s prime chance in the coming months.

In general, stocks that receive a “Perfect 10” on the Smart Score will show solid results in each of the 8 factors, but this is not a hard and fast rule. Pulling the Smart Score data for two stocks that have hit this target, we find that they offer investors a solid foundation and a good mix of strengths. Let’s take a closer look.

ConocoPhillips (COP)

We’ll start in the energy industry, where ConocoPhillips is one of the biggest legacy names in the sector. ConocoPhillips boasts a market capitalization of $158 billion, along with operations in 13 countries and production on the order of 1.5 million barrels of oil equivalent per day. Annual revenue reached $46 billion last year and has already surpassed that total this year; the top line for the first 9 months of the year reached $60.5 billion.

In its most recent reported quarter, 3Q22, revenue was $21.14 billion, up 79% year over year. Net income was $4.53 billion, up 90% year over year; on a per-share basis, adjusted EPS of $3.60 represented a 103% gain from last year’s quarter.

In addition to solid financial results, ConocoPhillips ended the quarter with $10.7 billion in cash and liquid assets — after distributing $4.3 billion to shareholders through a combination of $1.5 billion in dividends and $2.8 billion in share repurchases . During the quarter, the company increased its buyback authorization by $20 billion going forward and announced an 11% increase in its quarterly dividend payment.

With that in mind, it’s no wonder COP shares are up 83% so far this year, far outpacing the S&P 500’s 16% year-to-date loss.

Truist’s 5-star analyst Neil Dingman I couldn’t help but sing the praises of ConocoPhillips, noting that the company rests on a really solid foundation.

“Conoco is in an enviable financial and operational position with virtually no debt, record production and substantial, quality reserves. While we have received some pushback from investors, which has focused on the company’s stock hitting a recent all-time high, we point out that the valuation still looks very reasonable, with the stock trading at ~15% FCF yield and ~4. 4x profit base; both at 20%+ discounts over their closest peers,” said Dingman.

“Furthermore,” the analyst added, “we believe the company’s three-tier return on capital program is one of the best in the industry, as it returns more capital to investors than large-caps, yet retains more financing options than a range of large independent operators. We believe this combination gives investors what they want right now…”

Against this backdrop, it’s no wonder Dingman rates COP a buy, and his $167 price target suggests it has one-year upside potential of ~32%. (To watch Dingmann’s record, Press here)

Dingmann represents the bullish view on COP, which is supported by 15 of the 18 analysts that have recently issued reviews on the stock. Overall, the stock gets a strong buy from the analyst consensus. (See COP stock analysisis on TipRanks)

CECO Environment (CECO)

The next, CECO Environmental, is a “green” company working on the development and installation of new technologies in environmental air pollution control technologies, energy technologies, and liquid processing and filtration. The company has found customers in sectors and industries as diverse as aerospace, automotive, brick manufacturing, cement, chemicals, fuel refining and even glass manufacturing.

CECO’s revenue has grown relatively steadily, with 5 consecutive increases since the start of 2001. In 3Q22, the most recent reported quarter, the company posted a top line of $108.4 million, up 36% year-over-year. Revenue was supported by a 10% increase in business orders to $101.7 million, and the company’s backlog, an important indicator of future business and revenue, rose 27% to $277.7 million. In an important turnaround, net income was $1.9 million, a gain of $3.1 million from a net loss of $1.2 million in the year-ago quarter.

Reflecting these solid metrics, CECO posted full-year 2022 revenue guidance of $410 million or better, forecasting a 25% year-over-year gain.

Overall, investors have been happy with CECO this year, and it’s another stock that has far outperformed the broader markets, posting solid stock gains even during the bearish twists we’ve seen throughout the year. CECO shares are up 83% year-to-date.

Looking at CECO by Craig-Hallum, analyst Aaron Spihala is impressed with what he sees, noting, “CECO sees the benefits of a strategic transformation from a business primarily focused on longer-cycle, cyclical and project-based energy markets to one that is more diversified by product and vertical, with more -short cycle profile and end markets that benefit from ESG tailwinds for clean air and clean water. With solid fundamentals and increasing visibility, a mix of company-specific and secular growth drivers and a modest valuation, we reiterate our Buy rating.”

This Buy rating comes with a price target of $17, suggesting upside of 48% by the end of next year. (To watch Spihalla’s record, Press here)

In total, there are 5 recent analyst reviews for this stock – and they are unanimous, this is one to buy. This gives CECO stock its Strong Buy rating. (See CECO stock analysis at TipRanks)

Keep up with the best intelligence score on TipRanks has to offer.

Rebuttal: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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