By Paul R. La Monica, CNN Business
Most companies reported results in the fourth quarter. The biggest advantage for investors? This is a stock pickers market. Some businesses thrive while their competitors don’t.
Just look at how Disney released blockbuster numbers while Netflix disappointed investors. And the recent stumbles of Facebook owner Meta Platforms were not a sign of a broader technological weakness. Google owner Alphabet, Apple and Amazon all posted extremely strong results.
With that in mind, we thought it was time to bring back the CNN Business Stocks We Love feature.
Using data provider Refinitiv’s selection software, we searched for companies in the three major S&P indices that trade at reasonable valuations, have strong earnings growth prospects, healthy sales, high yields on equity and little debt.
We started with 1,500 companies and narrowed the list down from there. Here’s a look at nine companies that made the cut.
Interestingly, Meta looks attractive. The stock is certainly cheaper now after its massive drop after its earnings report. Mark Zuckerberg’s company continues to show strong profit and revenue growth. Investors may therefore overreact to concerns about the company’s metaverse pivot.
Also on the list is Wall Street giant Goldman Sachs, which tumbled after its last earnings report when the investment bank announced a big increase in workers’ compensation. The company continues to benefit from the boom in mergers and IPOs.
Several other companies whose shares have recently fallen also passed our screening process.
Semiconductor supply chain issues have not gone away, hurting companies like chip equipment leader Applied Materials and processor maker Analog Devices. Both could be attractive investments now.
Homebuilder DR Horton could be another bargain as investors worry about rising mortgage rates leading to a slowdown in real estate. Yet rates remain relatively low. Lack of inventory in the housing market could also help DR Horton, which raised its 2022 sales forecast earlier this month.
Finally, a slew of retailers and consumer companies are in the Wall Street discount bin. Farm equipment giant Tractor Supply, hair care company Ulta Beauty, furniture retailer Williams-Sonoma and Dick’s Sporting Goods have all done our part.
All eyes on Charlie
You wouldn’t think that a relatively small newspaper publisher’s annual meeting of shareholders would generate much interest from Wall Street. But Daily Journal is no ordinary media company.
The company is run by Charlie Munger, Warren Buffett’s vice chairman of Berkshire Hathaway, who has been in the news a lot over the past year.
Munger, 98, has made headlines over his plans for windowless dormitories in schools where he has donated money, as well as favorable comments about Beijing’s crackdown on major Chinese businesses.
Munger, who isn’t known for mince words, could have some colorful comments on these topics (and many more) at the Daily Journal’s shareholders meeting on Wednesday afternoon.
Investors can also learn more about some of the stocks Munger likes. Despite its comments on China and Big Tech, Daily Journal has increased its investment in Alibaba in recent months.
Like Buffett, Munger is a big bank fan. Daily Journal has stakes in Bank of America, US Bancorp and Wells Fargo. He is also an investor in the South Korean steelmaker Posco.
The Daily Journal meeting will be a virtual event due to the pandemic. But investors may see Munger in person in late April. Currently, Berkshire Hathaway plans to hold its “Woodstock for Capitalists” annual shareholder meeting in person in Omaha.
The 2021 reunion took place in Los Angeles, closer to Munger’s home in Southern California. The 2020 Berkshire reunion was a virtual affair.
Monday: Avis Budget Earnings
Tuesday: producer prices in the United States; unemployment in the UK; Gains from Marriott, Restaurant Brands, ViacomCBS, Airbnb, IAC, Wynn Resorts and Roblox
Wednesday: US retail sales, UK inflation; federal reports; annual meeting of the Daily Journal; Revenues from Kraft Heinz, Sunoco, Barrick Gold, Analog Devices, Hilton, Shopify, Cisco, Nvidia, AIG, Applied Materials, DoorDash, Hyatt and Boston Beer
Thusday: US Housing Starts/Building Permits; weekly jobless claims in the United States; Gains from Walmart, AutoNation, Yeti, Palantir, Roku, Redfin and Dropbox
Friday: sales of existing homes in the United States; Deere Earnings
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