2 Earnings Winners to Scoop Up During the Bear Market

The bear market has been hard to navigate. It's not likely to end soon given the trend in inflation. The best strategy for investors is to take advantage of the adverse market conditions to buy stocks that have a long-term history of compounding earnings. Builders First Source and Pfizer should be considered by investors.

shutterstock.com - StockNews

As the stock market retests the June lows, the near-term market outlook is cloudy. The economy and financial markets are not in a good place.

It was not possible to hope that inflation might have turned the corner. The Fed is said to be looking for a negative print or lower readings before slowing its hiking timetable. There is growing evidence that the economy is going to roll over soon.

This is an extremely difficult environment for investors. Capital preservation is their top priority. We know that the best stocks can only be bought at a discount during bad times. Pfizer and Builders First Source have long-term histories of earnings growth.

Pfizer is a multinational pharmaceutical company.

PFE is a pharmaceutical company. The revenues and earnings of this sector are mostly disconnected from economic growth or changes in monetary policy. These companies have a strong balance sheet and have a lot of cash.

PFE has been able to bring to market blockbuster drugs.

The company made $4.42 in earnings per share and $81.3 billion in revenue in 2011. Analysts are expecting $7.16 in earnings per share and $108 billion in revenue. This equates to growth rates of over 50%. The stock is cheap with a forward P/E of nine.

The strong fundamentals of PFE are reflected in its ratings. Strong Buy is implied by the A rating of the stock. The average annual performance of A-rated stocks is 31.1%, which is better than the S&P 500's 8.0%.

PFE has a B for Quality due to its strong balance sheet and above-average margins. Despite being half of the S&P 500, it has a B for value. Click here to view PFE's complete POWR ratings.

Builders First Source.

The underlying supply and demand fundamentals are supportive despite the fact that the housing market has slowed down due to higher mortgage rates and high prices. The demographic bulge is caused by the fact that the supply of available housing is low relative to historical averages.

This will bode well for companies like BLDR, which makes and sells building materials. Homebuilders, contractors, remodelers, and construction companies are its main customers. Its major products are lumber and sheet goods, as well as windows, interior and exterior doors, and other building products. Professional installation, turn-key framing, and shell construction are just some of the construction related services it offers.

Many stocks in the housing sector have experienced sharp declines due to rising rates and fears of a potential economic downturn. The valuation and cash flow reflect this.

This type of valuation shows that investors have discounted a contraction in earnings.

It can deliver stellar returns for investors with its low valuation. The market expects the Fed to hike at a faster pace than it actually does. Higher margins and revenues are possible because of inflationary pressures easing.

There is a combination of deep value and earnings growth. A Buy in our proprietary rating system equates to the stock's overall rating of B. B-rated stocks have an average annual performance of 21.1%, which is better than the S&P 500's average annual 8% gain.

In terms of component grades, it is very strong. Over the last 2 years, the stock's revenues and earnings have increased by 50% and 158%, respectively. Wall Street analysts are expecting a year of consolidation with 1% revenue growth and a 9% drop in earnings.

If the housing market can defy skeptics, then BLDR could have major upside. Additional POWR Ratings can be found here.

Growth stocks must be owned by everyone.

Why do they have to own?

The 9 picks are all doing well. They have a winning blend of growth and value attributes that can cause serious out performance.

Each recently earned a Buy rating from our coveted POWR Ratings system where the A rated stocks have gained more than 30 percent a year.

The stocks with exciting growth prospects are listed below.

Growth stocks must be owned by everyone.

PFE shares fell before the market opened. PFE has declined since the beginning of the year while the S&P 500 has risen.

Jaimini is a financial writer and reporter. Readers can be helped to identify risks and opportunities in the markets. He is the editor of the POWR Growth and POWR stocks under $10 newsletters. Links to his most recent articles can be found here.

There is more.

The post 2 Earnings Winners to Scoop Up during the Bear Market appeared first on Stock News.