Finding stock picks to beat the market are rare finds nowadays.
In September stock markets began on downbeat momentum following the S&P 500 rally throughout the summer. Euphoria gave way to a market slump.
Markets reversed their mood when the Federal Reserve reiterated a tough stance during the annual meeting at Jackson Hole.
The September slump created seven screaming picks to beat the market for investors.
| AAPL | Apple | $163.43 |
| BMY | Bristol-Myers Squibb | $72.36 |
| FDX | FedEx | $213.84 |
| INTC | Intel | $31.56 |
| MA | Mastercard | $338.42 |
| MMM | 3M | $124.25 |
| VTRS | Viatris | $10.11 |
Apple (AAPL)
Apple’s (NASDAQ:AAPL) long-awaited product iPhone 14 and iPhone 14 Plus refresh assures continued revenue strength. Most importantly, the smartphone giant did not raise the price of the models. The iPhon14 will start at $799 while the 14 Pro will start at $999. This is one of the reasons AAPL is among the top stock picks to beat the market.
Apple also introduced three levels of Apple Watch. The Series 8, SE and Apple Watch Ultra.
Skeptical investors might judge the product announcement as underwhelming. However, Apple only needs to introduce small changes to spur demand. Its supply chain is still constrained. It only needs to sustain current demand levels to satisfy customers.
Bristol-Myers Squibb (BMY)
Bristol-Myers Squibb (NYSE:BMY) fell late last month when it reported mid-stage data for its blood-thinner drug.
BMY stock is a screaming buy whenever shares drop. The company will assess the latest study results to allay investor fears.
Bristol Myers and Johnson & Johnson (NYSE:JNJ) will advance their experimental blood thinner, milvexian. The Phase 2 trial, went well and the companies will start the Phase 3 program by the end of this year.
On a conference call, BMY cited the positive impact of the Inflation Reduction Act. which will cap the impact of inflation next year. In addition, Bristol Myers will allocate its capital to develop its products.
FedEx (FDX)
FedEx (NYSE:FDX) pulled back recently. Investors sold FDX stock for fear that its earnings report will not meet expectations.
Income investors should consider this one of the top stock picks to beat the market since it pays a dividend of $1.15 a share per quarter. That is a yield of almost 2%.
During the pandemic, the package-shipping firm benefited from higher volumes. In the post-pandemic economy, customers may spend less online.
FedEx usually meets expectations. Last quarter, it missed consensus estimates, albeit by only five cents a share. Long-term investors should look at near-term misses as a chance to get the stock cheaply.
FedEx should benefit if UPS (NYSE:UPS) employees strike. UPS customers will need FedEx to take up some of the slack.
Intel (INTC)
Intel (NASDAQ:INTC) shares peaked in January 2022. INTC stock fell into a steady downtrend since then for multiple reasons.
IDC reported that PC shipments fell by 15.3% in the second quarter. It cited supply and demand wavering. Demand weakened suddenly in March when customers cut their spending on non-critical products.
People already upgraded their PC and smartphone devices during the pandemic. Food and energy prices are rising so briskly that customers need to save money for a rainy day.
To widen its addressable market in the graphics card market, Intel developed Arc GPUs. In limited release, the product’s slow launch is a missed opportunity. Once Intel sorts out the driver software bugs, the Arc GPU will not be on shaky ground. When that happens, Intel shares will bounce back.
Mastercard (MA)
Mastercard (NYSE:MA) posted earnings per share of $2.56 (non-GAAP) in Q2. Revenue soared by 21.4% year over year to $5.5 billion.
Regulation is a worry, though. However, EVP of Blockchain & Digital Currencies Raj Dhamodharan said that Mastercard is working closely with governments around the world.
Mastercard will find a way to facilitate blockchains interacting from one network to another, which is why it’s one of the top outsider stock picks to beat the market.
3M (MMM)
3M (NYSE:MMM) is out of favor. Investors are nervous about the legal liabilities around its ear plug. More recently, a U.S. Bankruptcy judge ruled against 3M.
Judge Jeffrey J. Graham ruled against a temporary stay of suits. Both 3M and its bankrupt subsidiary, Aearo Technologies, face a lawsuit for selling defective combat earplugs. The product failed to prevent hearing loss.
Shareholders are worried that 3M’s legal battle could cost it up to $100 billion. 3M will appeal the decision. Currently, juries awarded nearly $270 million in compensatory and punitive damages in 16 trials.
To increase profitability, 3M is cutting jobs to cut costs. Cuts in the industrial division are necessary. The economy is slowing down. Demand for 3M’s safety and industrial products risk falling.
Value investors are paying only around 17 times earnings after the recent drop. Furthermore, the forward P/E is 11.3 times. Risks are low and the upside is high if 3M can turn itself around.
Viatris (VTRS)
Viatris (NASDAQ:VTRS) indicated a “double bottom” on the stock chart, which suggests that VTRS stock will not fall below $9.75.
In the last quarter, Viatris posted an EPS of 26 cents. Revenue of $4.12 billion, down by 10.0% from last year. The stock is underperforming because it lowered its revenue guidance for the fiscal year.
Viatris expects its 2022 revenue guidance will have a nearly $800 million negative impact from foreign exchange rates. It now expects revenue of $16.2 billion to $16.7 billion. It previously expected revenue of between $17 billion and $17.5 billion.
In this weak economic environment, investors cannot fault Viatris for the lower revenue guidance. In addition, it paid down approximately $1.5 billion in short and long-term debt. Its total debt will fall by around $2 billion in the full year of 2022.
On the date of publication, Chris Lau 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.