This is shaping up to be the summer of volatility. Ever since we entered the year’s second half in July, markets have been having fits, making it challenging to find sleeper stocks. The technology-laden Nasdaq index is now in a correction, defined as a decline of 10% or more from recent highs. On Aug. 5, the blue-chip Dow Jones Industrial Average dropped more than 1,000 points only to turn around and claw back 500 points the next day.
The Cboe Volatility Index (VIX), commonly known as Wall Street’s “fear gauge,” is at its highest level in four years while cryptocurrency prices plunge to their lowest levels in six months. The price of gold is near an all-time high, while the yield on the benchmark 10-year Treasury bond recently fell to its lowest level in more than a year. Where we go from here is anyone’s guess. But amid the chaos, some stocks are still managing to shine.
Here are three sleeper stocks that could make your summer unforgettable.
AutoZone (AZO)
AutoZone (NYSE:AZO) is one of those sleeper stocks that has been climbing ever since investors shifted their capital into value names. The Tennessee-based automotive parts retailer is the type of blue-chip security that people seek out to escape market volatility. Since the beginning of July, AZO stock has risen 13%, bringing its 12-month gain to an impressive 30%.
To be sure, AutoZone is not the most affordable stock to buy. Its share price is currently sitting near $3,200 and rumors of a stock split persist. However, the valuation on the stock is pretty decent with the shares trading at 22 times future earnings estimates, which is about average for companies listed on the benchmark S&P 500 index. The company’s business is thriving right now as consumers continue to hold onto their aging vehicles amid high prices and long wait times for new models.
AutoZone runs over 7,000 stores across the U.S. and its stock has nearly tripled in the last five years.
UnitedHealth Group (UNH)
Most of the news about UnitedHealth Group (NYSE:UNH) this year has concerned the cyberattack the company endured in February. While the impact of that attack was bad and hurt UNH stock, the company appears to be moving past the incident, and its share price is recovering as a result. After slumping this year, UNH stock surged 17% last month and looks to once again have momentum behind it.
The biggest health insurer in the U.S was hit by a cyberattack on its technology unit called “Change Healthcare” that disrupted its payment system and required it to provide $9 billion of loans to some partners. UnitedHealth also warned that the hackers have likely stolen a substantial amount of data on its customers. Despite the upheaval, management says they are now moving past the cyberattack. This fact was reflected in the company’s second-quarter financial results that beat Wall Street estimates across the board.
UNH stock has gained 130% over the last five years.
FedEx (FDX)
Shares of Federal Express (NYSE:FDX) vaulted 15% higher after the shipping and logistics company reported Q2 financial results that beat Wall Street forecasts and raised its forward guidance. FDX stock is up 9% in the past 12 months after a steep decline post-Covid-19 when shipping demand plummeted. FedEx stock is trading at 16x earnings estimates and pays a quarterly dividend of $1.38, a yield of nearly 2%.
In June, FedEx raised its quarterly dividend payment to shareholders by 10%. As for its Q2 results, FedEx announced EPS of $5.41 versus $5.35 that was expected among analysts. Revenue in what was the company’s fiscal fourth quarter totaled $22.11 billion compared to $22.07 billion that was estimated. In terms of guidance, company executives raised their outlook for fiscal 2025, stating they expect low to mid-single-digit revenue growth driven by e-commerce activity and low-inventory levels.
FDX stock has increased 78% over the last five years.
On the date of publication, Joel Baglole 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.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
