3 cheap large-cap stocks always beat the market

Data from the United States Bureau of Labor Statistics shows that the economy added 372,000 jobs in June, and the unemployment rate remained at 3.6% for the fourth consecutive month. While this data should ease recession fears, it could be a good reason for the Fed to continue raising rates aggressively. Therefore, the stock market might continue to follow a downtrend.

Large-cap stocks generally perform stably amid such uncertainties due to the broad market reach, strong pricing power and ample liquidity of the underlying companies to weather any short-term headwinds. . Investor interest in large-cap stocks is evident in the SPDR S&P 500 Trust ETFs (TO SPY) 2% returns over the past week.

Bristol-Myers Squibb Company Large Cap Stocks (BMY), Bayer AG (Bayry) and Mitsubishi Heavy Industries, Ltd. (MHVYF) have withstood market shocks so far this year and possess enough fundamental strength to continue to outperform the market. Therefore, these stocks could be solid investments now. Our owner POWR Rankings system rated these shares as Strong Buy.

Bristol-Myers Squibb Company (BMY)

With a market capitalization of $161.43 billion, BMY develops, licenses, manufactures and markets biopharmaceuticals worldwide. It offers courses in hematology, oncology, cardiovascular and therapeutic immunology and sells products to wholesalers, distributors, pharmacies, retailers, hospitals, clinics and government agencies.

On June 24, 2022, BMY’s Breyanzi, a CD19-directed CAR T cell therapy, was approved by the FDA for the treatment of adult patients with large B-cell lymphoma (LBCL).

In the pivotal Phase 3 TRANSFORM trial, a single infusion of Breyanzi far exceeded standard of care by nearly 30 years with a median event-free survival of 10.1 months versus 2.3 months. This should help BMY’s Breyanzi gain wide market reach in the coming months.

For its fiscal 2022 first quarter ended March 31, 2022, BMY’s total revenue increased 5.2% year-on-year to $11.65 billion. The company’s non-GAAP gross profit was $9.23 billion, indicating a 6.7% increase over the prior year period. Its non-GAAP EBIT was $5.05 billion, an increase of 5.8% over the prior year period.

BMY’s non-GAAP net profit was $4.25 billion for the quarter, up 7.1% from the year-ago period. Its non-GAAP EPS rose 12.6% year-on-year to $1.96. As of March 31, 2022, the company had $12.37 billion in cash and cash equivalents.

The consensus EPS estimate of $7.55 for the 2022 fiscal year ending December 31, 2022 indicates a 0.5% year-over-year improvement. It has exceeded Street EPS estimates in each of the past four quarters, which is impressive. Its EPS is expected to grow 4.5% per year over the next five years.

The stock’s forward EV/EBITDA of 9.39x is 29.7% below the industry average of 13.36x. In terms of futures price/cash flow, BMY is trading at 10.01x, 39.6% below the industry average of 16.56x. The stock has gained 20.5% since the start of the year to close the last trading session at $75.14.

BMY’s POWR ratings reflect this promising outlook. The stock has an overall A rating, which is equivalent to Strong Buy in our proprietary rating system. POWR ratings are calculated by considering 118 separate factors, with each factor weighted to an optimal degree.

It has an A rating for value and a B rating for growth and quality. Click here to see additional ratings for BMY’s momentum, sentiment and stability.

BMY is ranked #3 out of 170 stocks in the Medical – Pharmaceutical industry.

Bayer AG (Bayry)

German life sciences company BAYRY operates through Pharmaceuticals; Consumer health; and Crop Science worldwide. It distributes its products through wholesalers, pharmacies and drugstore chains, supermarkets, online and other retailers, hospitals and directly to farmers. It has a market capitalization of $57.88 billion.

On June 28, 2022, the American Diabetes Association (ADA) Standards of Medical Care in Diabetes – 2022 awarded a new Grade A recommendation to KERENDIA by BAYRY for improving cardiovascular outcomes and reducing the risk of progression of chronic kidney disease (CKD) in patients with CKD associated with type 2 diabetes (T2D).

Later, on June 30, the China National Medical Products Administration (NMPA) granted marketing authorization for Kerendia. This will help KERENDIA meet growing demand and gain wide recognition in the industry.

For its first quarter of fiscal 2022 ended March 31, 2022, BAYRY’s net sales increased 18.8% year-on-year to €14.64 billion (€14.91 billion). dollars). The company’s gross profit was €9.46 billion ($9.64 billion), representing a 24% increase over the prior year period. Its EBIT was €4.21 billion ($4.29 billion) for the quarter, an increase of 36.6% over the prior year period.

BAYRY’s net profit was €3.29 billion ($3.35 billion), up 57.6% from the prior year period. Its EPS increased 57.3% year-on-year to €3.35. As of March 31, 2022, the company had €5.79 billion ($5.89 billion) in cash and cash equivalents.

The consensus EPS estimate of $1.94 for the 2022 fiscal year ending December 31, 2022 represents a 1% increase over the prior year period. It has exceeded Street EPS estimates in each of the past four quarters, which is impressive. The company’s EPS is expected to grow at a rate of 4.7% per year over the next five years.

Stock is 6.80x forward EV/EBITDA is 49.1% below the industry average of 13.36x. In terms of futures price/cash flow, BAYRY is currently trading at 9.20x, 44.5% below the industry average of 16.56x. The stock has gained 8.3% year-to-date to close the last trading session at $14.37.

BAYRY’s POWR ratings reflect its strong outlook. The stock has an overall A rating, which is equivalent to Strong Buy in our proprietary rating system.

It has an A rating for value and growth and a B rating for stability. In addition to the POWR Ratings we just highlighted, we can see BAYRY’s Momentum, Sentiment and Quality ratings here.

BAYRY is ranked #14 in the Medical – Pharmaceutical industry.

Mitsubishi Heavy Industries, Ltd. (MHVYF)

With a market capitalization of $12.26 billion, Tokyo, Japan-based MHVYF manufactures and sells heavy machinery through Power Systems; Industry & Infrastructure; and the Aerospace, Defense and Space segments worldwide. It manufactures machinery, ships, turbines and engines, main engines, aircraft and machinery parts for military and commercial use. It also studies and develops nuclear power plants.

On July 5, 2022, MHVYF’s energy solutions brand, Mitsubishi Power, received a series of contracts from Taiwan’s state-owned Taiwan Power Company (TPC) for a large-scale power generation equipment retrofit project. of Datan Power Station in Taoyuan City to reduce nitrogen oxide (NOx) emissions.

The project aims to replace the current combustors with air-cooled premix combustors, which lowers the local combustion temperature and limits the generation of NOx while maintaining production capacity and improving operating flexibility. improving operations and maintenance (O&M). This will allow the brand to nurture its relationship with the entire Taiwanese electrical industry.

For its 2022 fiscal year ended March 31, 2022, MHVYF’s revenue increased 4.3% year-on-year to 3.86 billion yen ($28.36 billion). The company’s gross profit was 655.91 billion yen ($4.82 billion), up 19.3% from the year-ago period. Its EBIT was 99.19 billion yen ($728.55 million) for the quarter, an increase of 90.4% over the prior year period.

MHVYF’s net income was 113.54 billion yen ($834 million), an increase of 179.4% over the prior year period. Its EPS (base) rose 179.7% year-over-year to ¥338.24. The company had cash and investments of 314.26 billion yen ($2.31 billion) as of March 31, 2022.

Analysts expect the company’s revenue to grow 197.2% year-over-year to $28.54 billion in fiscal 2023 ending March 31, 2023. The EV / 7x forward EBITDA of the stock is 27.9% below the industry average of 9.71x. In terms of price/sales futures, MHVYF is trading at 0.41x, 65.2% below the industry average of 1.18x. The stock has gained 51.6% year-to-date to close last trading session at $34.55.

MHVYF’s POWR ratings reflect this promising outlook. The stock has an overall A rating, which is equivalent to Strong Buy in our proprietary rating system.

It has an A rating for value and a B for growth and stability. Click here to see additional ratings for Momentum, Quality, and Sentiment of MHVYF.

MHVYF is ranked #6 out of 79 stocks in the B rating Industrial machinery industry.


BMY shares were trading at $75.67 per share on Friday afternoon, up $0.53 (+0.71%). Year-to-date, BMY has gained 24.19%, compared to a -17.40% rise in the benchmark S&P 500 over the same period.

About the Author: Sweta Vijayan

Sweta is an investment analyst and journalist with a particular interest in researching market inefficiencies. She is passionate about educating investors, so they can succeed in the stock market. After…

More resources for actions in this article

Comments are closed.