In this week's Fundamental Report, our focus was on identifying companies that are outperforming the market within the current economic cycle, which is presently characterized as a Recession cycle according to Trading Central's Fundamental Insight tool. To select the top performers within this economic regime, we've refined our search criteria to concentrate on companies operating in three specific sectors: Basic Materials, Consumer Defensive, and Real Estate. These sectors have exhibited favorable performance in the prevailing economic conditions. As a benchmark, we've utilized the S&P 500 index and meticulously chosen stocks that not only trade at an undervalued price but also exhibit stronger fundamental metrics when compared to the index. This approach enabled us to pinpoint standout companies within these sectors. Specifically, we narrowed down our search to companies with price-to-earnings (P/E) ratios lower than the benchmark's P/E of 20.5 and a minimum return on equity (ROE) of 17.31%. Furthermore, we focused on stocks that have outperformed the benchmark's price performance over the past 52 weeks of 14.7% and established a minimum requirement of a TC Quantamental Rating of 65 out of 100 to further ensure the quality of our selections.
SUZ:US
Suzano, a forest products company with a market capitalization of 13.29 billion dollars, currently has a TC Quantamental Rating of 71 out of 100, which is well above the average TC Quant Rating of 57 of other sector leaders. In comparison to the S&P 500, Suzano has a Return on Equity of 69.65%, a P/E of 2.77, and a 52-week price performance of 18.1%. According to TC's Fundamental Insight, the stock has a target price of $11.50, representing a roughly 16% upside vs the previous closing price of $9.92.
NEU:US
NewMarket Corporation, a 4.53 billion dollar chemicals company, has a TC Quantamental Rating of 65 out of 100, the lowest in our list. Compared to its peers, NewMarket sits above the average TC Quant Rating of 57. Relative to the S&P 500, NewMarket has a Return on Equity of 43.34%, a P/E of 12.73, and a 52-week price performance of 52.9%. According to TC's Fundamental Insight, the stock has a target price of $505, a possible 10% upside vs its most recent closing price of $457.57.
BHP:US
BHP Group Limited, a 147 billion dollar metals and mining corporation, holds a TC Quantamental Rating of 74 out of 100, the highest in our list. This rating significantly surpasses the sector's average TC Quant Rating of 65 among other sector leaders. When compared to the S&P 500, the Melbourne-based company shines with an impressive Return on Equity of 29.85%, a P/E ratio of 11.48, and a strong 52-week price performance of 19.4%. According to TC's Fundamental Insight, the stock exhibits a target price of $65, indicating a potential 14% upside compared to the previous closing price of $56.90.
BG:US
Bunge Limited, a major consumer packaged goods player with a market capitalization of 17.33 billion dollars, currently boasts a TC Quantamental Rating of 67 out of 100, surpassing the typical TC Quant Rating of 62 of the sector leaders. In comparison to the S&P 500, Bunge has a Return on Equity of 20.41%, a P/E ratio of 8.56, and a 52-week price performance of 15.9%. According to TC's Fundamental Insight, the stock carries a target price of $125, suggesting a potential upside of approximately 9% from the previous closing price of $110.81.
