The stock market trembled in the midweek after the Federal Reserve announced Wednesday, 16 June, that it plans to hike interest rates as early as 2023. And though the Nasdaq
The Fed’s policy update deviates from previous estimates from the Fed, which pushed rate hikes out into 2024 and beyond. And while there was no mention of when the Fed will start to roll back its $120 billion per month bond purchase program, rest assured, investors are poised for that blow, too.
But until that happens, we can all sit back, breathe a sigh of relief that the Fed didn’t sweep the rug out from under our investment accounts overnight, and enjoy this week’s trending stocks courtesy of Q.ai.
Q.ai runs daily factor models to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.
Sign up for the free Forbes AI Investor newsletter here to join an exclusive AI investing community and get premium investing ideas before markets open.
Southwest Airlines Co (LUV)
Southwest Airlines Co bumped down almost 0.8% Wednesday to $56.67 per share with 5.95 million trades on the books. The stock is trading below the 22-day price average of $59.59, though up 21.6% YTD. Currently, Southwest Airlines is trading at 142.7x forward earnings.
While you might think Southwest airlines trended down – or at all – thanks to the Fed’s policy announcement, the budget airliner actually had its own problems to contend with. To start, the airliner saw three days of flight cancellations and delays between Monday and Wednesday thanks to an unfortunate pile of weather data supplier issues and technical troubles.
Tuesday alone saw a full half of the company’s flights delayed or canceled. Then, to top off Wednesday’s spillover counter 10% of flights canceled and 20% delayed, Southwest Airlines was one of many institutions struck by an internet outage in the wee hours Thursday morning.
Still, Southwest Airlines is fighting hard to shake off 2020’s enormous share price and revenue slump brought about by the pandemic. Revenue plunged from $22 billion three years ago to $9 billion in the last fiscal year, though operating income actually grew 23% in the last fiscal year to $5 billion compared to $3.2 billion three years ago. Meanwhile, per-share earnings crawled up from $4.29 to $5.44, while total return on equity leaped from 25.3% to 32.9%.
All told, Southwest Airlines’ revenue is expected to grow 18% over the next 12 months as the company plays catchup to pre-pandemic numbers. Our AI rates the stock B in Technicals, D in Low Volatility Momentum, and F in Growth and Quality Value.
Microsoft Corporation (MSFT)
Microsoft Corporation slid down 0.4% Wednesday to $257.38 per share, closing out the midweek at 27.2 million trades. The company is trending above the 22-day price average of almost $251, with the stock up over 15.7% YTD. Currently, Microsoft is trading at 32.4x forward earnings.
The world-famous tech giant is trending this week – and most weeks – as the innovator of modern life continues to roll out new solutions for a work-from-home world. Thursday, the software maker revealed new changes to its Teams teleconference and collaboration software to ensure remote workers can stay just as engaged as those present in meetings, with plans to release additional updates later this year.
Moreover, CEO Satya Nadella was unanimously voted new chairman of the board on Wednesday, elevating his role in the tech giant’s upper echelons. Nadella is one of the main players responsible for shifting Microsoft from a hardware-software giant into a cloud computing behemoth since he took the held in 2014.
Nadella can also be credited with the company’s push toward recent blockbuster earnings, including during the pandemic. In the last fiscal year, Microsoft pulled in $143 billion in revenue, a 12% increase in the last year and almost 45% growth over $110 billion three years ago. In the same periods, the company saw operating income jump 21.3% and 83.2%, respectively, from $35 billion to $53 billion. And per-share earnings skyrocketed 27.4% and 244.5%, from $2.13 to $5.76, while ROE over doubled from 19.5% to 40%.
All told, Microsoft is expected to rake in 8.6% revenue growth in the next twelve months. Our AI rates the tech behemoths A in Low Volatility Momentum and Quality Value, B in Growth, and D in Technicals.
Ampco-Pittsburgh Corporation (AP)
Ampco-Pittsburgh Corporation slipped 0.6% Wednesday, trading 34,123 trades down to $6.43 per share. The company is trending down from the 22-day price average of $6.75, though it remains up over 17.3% YTD.
Ampco-Pittsburgh is a specialty steel manufacturer headquartered in – you guessed it! – Pittsburgh, Pennsylvania. The company is trending this week after its presentation at the 11th Annual East Coast IDEAS Investor Conference, where the company noted such impressive metrics as being the #1 in U.S. and European produced of forged and cast roles, as well as the #1 producer of nuclear power heat exchanges and pumps for U.S. Navy Combat Ships.
In the last fiscal year, Pittsburgh-Ampco netted $328.5 million in revenue, a substantial drop from its $419 million revenue three years ago. In the same period, operating income halved from $11 million to $5.5 million, while its per-share earnings were absolutely decimated from $5.57 to $0.54. Moreover, the steelmaker’s ROE plunged from 34% to 13% in the three-year time frame.
All told, our deep-learning algorithms rate Ampco-Pittsburgh A in Quality Value, C in Technicals, and D in Growth and Low Volatility Momentum.
Morgan Stanley (MS)
Morgan Stanley ticked up 0.44% Wednesday to $91.10 per share with 11.37 million trades on the books. The stock is trending below the 10-day average of $92.22, though up against the 22-day average of $90.55. All told, Morgan Stanley is up 32.9% YTD and trading at 13.4x forward earnings.
The investment bank and financial services company is trending in the news this week after the company’s chief officer James Gorman announced that New York workers should expect to be back to in-person work in the fall. Said Gorman: “By Labor Day, I’ll be very disappointed if people haven’t found their way into the office, and then we’ll have a different kind of conversation. If you want to get paid New York rates, you work in New York.”
However, Gorman also noted that the company would offer flexible work for families, and individual circumstances would be evaluated on a case-by-case basis. Moreover, Gorman noted that this statement primarily applies to New York workers – and not, say, to the company’s India-based employees, where Covid-19 cases have finally fallen to a mere 70,000 new daily cases (compared to early May’s 400,000 new cases per day).
In the last fiscal year, Morgan Stanley posted solid revenue growth of 13.4% to $48.2 billion, a 36.2% rise over the $40 billion earned three years ago. Operating income outpaced this growth at 19% in the last year and 55% in the last three, jumped from $13.7 billion to $17.9 billion. In the same periods, per-share earnings leaped 18.3% and 61.6%, respectively, with the last fiscal year banking $6.46 compared to $4.73.
Currently, our AI rates Morgan Stanley B in Growth and Low Volatility Momentum, C in Quality Value, and D in Technicals.
GATX Corporation (GATX)
GATX Corporation nudged down 0.7% Wednesday, closing out the midweek at $95.83 per share with 118k trades on the books. The stock is trading just over the 22-day average of $97.43. Currently, GATX Corporation is up 15.2% YTD, and the company is trending at 20.95x forward earnings.
GATX is an equipment financing and leasing institution whose primary income comes from railcar operating leases in North America and Europe. The company also leases locomotives in North America and maintains holdings in industrial equipment.
In the last fiscal year, GATX Corporation’s revenue grew by 0.53% to $1.2 billion, a 3.5% rise compared to its $1.175 billion three years ago. In the same 36-month-timeframe, operating income grew 3.4% to $285 million against $279 million. However, EPS shrank from $5.52 to $4.27, while return on equity fell from 10.6% to 7.9%.
All told, GATX Corporation is expected to see revenue growth of 3.2% over the next 12 months. Currently, our AI rates the company B in Low Volatility Momentum and C in Technicals, Growth, and Quality Value.
Liked what you read? Sign up for our free Forbes AI Investor Newsletter here to get AI driven investing ideas weekly. For a limited time, subscribers can join an exclusive slack group to get these ideas before markets open.