Scoop Up These 3 Stocks in Bear-Market Territory for a 2022 Rebound

The major market indices shrugged off the omicron worries to make record highs last week after starting December on a volatile note. The S&P 500 closed the last trading session at 4,766.18, representing an increase of 26.9% during the calendar year, while the Dow Jones Industrial Average closed at 36,388.30, up 18.7% for the year. The Nasdaq Composite gained 21.4% to close the year at 15,644.97.

The S&P 500 had a solid year after notching up seventy record highs. The U.S. major market indexes’ strong comeback from the lows of March 2020 was fuelled by the Fed’s aggressive bond purchases, a low-interest-rate environment, and the rapid vaccination. However, many stocks underperformed the major indexes.

According to a FactSet report, analysts expect the S&P 500 to report an earnings growth of 9.2% in 2022, higher than the 10-year average (annual) earnings growth rate of 5%. Given this backdrop, it could be wise to add quality stocks Teleflex Incorporated (TFX), PTC Inc. (PTC), and WestRock Company (WRK). Wall Street analysts expect these stocks to soar more than 20% in the upcoming months.

Teleflex Incorporated (TFX)

TFX provides medical technology products. The company designs, develops, manufactures, and supplies single-use medical devices used by hospitals and healthcare providers for standard diagnostic and therapeutic procedures in critical care and surgical applications. Its product categories include vascular access, anesthesia, interventional, surgical, and urology.

On December 13, 2021, TFX announced that it had received reimbursement approval from the Central Social Insurance Medical Council of Japan for its UroLift system for patients requiring treatment for benign prostatic hyperplasia. The reimbursement approval will enable TFX to bring this treatment to more than two million men suffering from BPH in Japan, resulting in higher revenues and profits.

TFX’s revenue for the third quarter ended September 30, 2021, increased 11.5% year-over-year to $700.25 million. The company’s net income increased 70.8% year-over-year to $199.18 million. Its EPS came in at $3.51, up 26.7% year-over-year.

Analysts expect TFX’s EPS and revenue for fiscal 2021 to increase 24.4% and 10.3% year-over-year to $13.27 and $2.80 billion, respectively. It surpassed Street EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has lost 21% to close Friday’s trading session at $328.48. However, Wall Street analysts expect the stock to hit $413.86 in the near term, indicating a potential upside of 26%.

TFX’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

It has a B grade for Growth. It is ranked #34 out of 169 stocks in the Medical – Devices & Equipment industry. Click here to see the other ratings of TFX for Value, Momentum, Stability, Sentiment, and Quality.

PTC Inc. (PTC)

Software and services company PTC enables industrial companies to digitally transform product and service creation, operational excellence, and workforce productivity. Its portfolio consists of CAD, PLM, IoT, and AR technologies delivered on-prem, hybrid, and SaaS.

On October 28, 2021, PTC announced the immediate availability of the ThingWorx Digital Performance Management Solution. This first-of-its-kind offering is a significant advancement in manufacturing companies’ ability to drive efficiency. The President and CEO of PTC, Jim Heppelmann, said, “This software marks the beginning of a new phase in PTC’s IIoT growth strategy as we evolve our positioning of ThingWorx as a suite of powerful enterprise solutions that power significant enterprise efficiency to drive business value.”

For the fourth quarter ended September 30, 2021, PTC’s revenues increased 23% year-over-year to $481 million. The company’s annual recurring revenue increased 16% year-over-year to $1.47 billion. Its cash flow from operations increased 32.3% year-over-year to $45 million. Also, its non-GAAP EPS increased 41% year-over-year to $1.10.

For fiscal 2023, PTC’s EPS and revenues are expected to increase 15.3% and 10.1% year-over-year to $5.05 and $2.14 billion, respectively. It has surpassed consensus EPS estimates in each of the trailing four quarters. The stock has lost 14.2% over the past six months to close Friday’s trading session at $121.15. However, Wall Street analysts expect the stock to hit $154 near term, indicating a potential upside of 27.1%.

PTC’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. It has a B grade for Growth and Quality. It is ranked #25 in the 168-stock Software-Application industry. To see the additional ratings for PTC (Value, Momentum, Stability, and Sentiment), click here.

WestRock Company (WRK)

WRK provides fiber-based paper and packaging solutions. The company operates through the Corrugated Packaging and Consumer Packaging segments. It also operates integrated virgin and recycled fiber paperboard mills and consumer packaging converting operations which convert items such as folding cartons, interior partitions, inserts, and labels.

On November 1, 2021, WRK was recognized for packaging design excellence at the 78th Annual North American Paperboard Packaging Competition. It won 14 awards, including the year's Sustainability Award, reinforcing its commitment toward a more sustainable future.

WRK’s net sales for the fiscal fourth quarter ended September 30, 2021, increased 14% year-over-year to $5.09 billion. The company’s net income came in at $323.70 million, compared to a net loss of $1.16 billion in the year-ago period. Its adjusted segment EBITDA increased 21.8% year-over-year to $877.90 million.

Analysts expect WRK’s EPS for the quarter ending March 2022 to increase 90.7% year-over-year to $1.03. For the last completed quarter, its revenue is expected to increase 12.2% year-over-year to $4.95 billion. It has surpassed Street EPS estimates in three of the trailing four quarters. Over the past six months, the stock has lost 16.6% to close Friday’s trading session at $44.36. However, Wall Street analysts expect the stock to hit $54.17 in the near term, indicating a potential upside of 22.1%.

WRK’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to a Buy in our proprietary rating system. The stock also has a B grade for Value. Within the B-rated Industrial - Packaging industry, it is ranked #3 of 22 stocks. Click here to see the other ratings of WRK for Growth, Momentum, Stability, Sentiment, and Quality.

TFX shares were trading at $334.79 per share on Monday afternoon, up $6.31 (+1.92%). Year-to-date, TFX has declined -18.36%, versus a 29.40% rise in the benchmark S&P 500 index during the same period.

Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.

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