- These three no-brainer stocks to buy in May have released their latest earnings and were a beat on both EPS and revenue
- Credit Acceptance (CACC): Providing financing programs to automobile dealers to sell vehicles is a business with strong sales growth
- The Chemours Company (CC): The strength in 2022 with gains of nearly 16% year-to-date could continue with the latest strong earnings
- Mohawk Industries (MHK): This flooring products maker and designer has consistent profitability, and its shares are cheap
Is investing in the stock market a no-brainer task about generating wealth, income, and having a luxurious lifestyle? The question of course is more philosophical or rhetorical as the clear answer is no. Analyzing the stock market and picking stocks to invest in requires a lot of effort, knowledge, skills, and risk management. Stock investing is not gambling. Unless of course, you choose blindly to invest in meme stocks that have wild price swings, and when the pump and dump effect takes place if you are not quick to sell you get caught in losses. How do you choose stocks to buy?
What about no-brainer stocks to buy or sell? Performing due diligence, common sense, and financial analysis, leaving emotions aside is an investment plan that has increased the odds of success. In this article, three stocks are mentioned that have recently reported the latest earnings reports and beat both EPS and revenue expectations. Beating both on the top and bottom lines is better than just beating only EPS for example. The stock market in May should continue to be volatile with the most recent Federal Reserve monetary policy decision, geopolitical risks unfortunately are yet a major risk.
These stocks have a strong catalyst now that could send their prices in a decent rally during this month.
|CACC||Credit Acceptance Corporation||$599.22|
|CC||The Chemours Company||$39.76|
Stocks to Buy: Credit Acceptance Corporation (CACC)
Typically, such a strong rally has some plausible reason behind it, and the key factor is as mentioned above — a strong Q1 2022 earnings report on May 2. The firm that provides financing programs and related services to independent and franchised automobile dealers in the United States reported EPS GAAP of $14.94, a beat by $2.57, and revenue of $455.70 million, a beat by $12.28 million.
Another positive factor for CACC stock is the fact that during Q1 2022, the firm engaged in “Stock repurchases of approximately 802,000 shares, which represented 5.7% of the shares outstanding at the beginning of the quarter.”
This amount of stock repurchases is very significant and indicates the strong confidence of the company’s management in the business prospects. On another note, Credit Acceptance Corporation has a strong history of beating EPS, as in the past eight consecutive quarters, it’s reported EPS was higher than the estimates.
The sales growth shows consistency and relative stability as it was in the range of 11.18%-15.84% for the period 2018-2021.
The Chemours Company (CC)
Investors may not find companies in the Basic Materials Sector to be of high interest in contrast with technology stocks. This is an erroneous investment decision as stock investing should be based on the concept of diversification. Shares of The Chemours Company (NYSE:CC) have totally neglected the selling pressure in the U.S. stock market so far, having gains of nearly 16% year-to-date. This strong momentum has a high chance to continue rather than reverse based on the latest earnings report. It has a strong fundamental reason to support the stock moving higher, a strong Q1 2022 earnings report.
The chemicals company reported on May 2 EPS GAAP of $1.43, a beat by $0.39, and revenue of $1.76 billion, a beat by $193.59 million.
What is also bullish for the stock is that the firm raised its guidance for 2022 expecting “2022 adjusted core earnings between $1.475 billion and $1.575 billion, compared with its previous range of $1.3 billion to $1.425 billion.”
The Chemours Company has a strong EPS history as in the past eight consecutive quarters it beat estimates in the seven times.
Stocks to Buy: Mohawk Industries (MHK)
Mohawk Industries (NYSE:MHK) is a maker, designer, and distributor of flooring products for remodeling and new constructions of residential and commercial spaces in the United States, Europe, and internationally. Its shares have a PE Ratio (TTM) of 3.07, and a 1-year target estimate of $171.00.
Based on the closing stock price of $153.14 on May 3, this represents an upside potential of 11.66%. The shares have losses of nearly 16% year-to-date but based on the latest earnings report on AprIL 28, a rebound is very likely. In fact, the MHK stock has already witnessed a 5-day rally of 21.60%. In its Q1 2022 earnings report, the company reported EPS GAAP of $3.78, a beat by $0.92, and revenue of $3.02 billion, a beat by $160.83 million.
In the first -quarter of 2022 sales rose to a record, and profitability is very strong with net income increasing by 100.38% in 2021 to $1.03 billion.
The company has like the other two stocks in this list a strong record of beating EPS, as in the past eight consecutive quarters it reported a beat on all of them.
On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.