The stock market has experienced increased volatility recently due to the U.S. debt ceiling deal and concerns over another interest rate hike at the Fed's June meeting. This is in response to persistent inflation and slowing demand, as shown in the April consumer spending report.
Despite the volatile market, investors may want to consider adding quality stocks IES Holdings, Inc. (IESC), Garrett Motion Inc. (GTX), and Jiayin Group Inc. (JFIN) to their portfolios. These stocks have strong fundamentals and a positive growth outlook.
The Federal Reserve has raised interest rates ten times since March 2022, bringing the benchmark rate to its highest level since 2007. However, inflation has continued to persist. The consumer price index (CPI) rose 0.4% last month, and the annual inflation rate was 4.9%, slightly below estimates but still well above the Fed's target of 2%.
Strong consumer spending, supported by wage gains in a tight labor market, has put the Fed in a difficult position. Personal consumption expenditures (PCE) surged 0.8% last month, exceeding expectations of a 0.4% rise. This robust economic data may lead the Fed to raise interest rates again in June.
With elevated inflation, the possibility of another interest rate hike, and the recent U.S. debt ceiling deal, the stock market is expected to remain highly volatile in the near future.
IES Holdings, Inc. (IESC) is a company that designs and installs integrated electrical and technology systems in the United States. It operates in four business segments: Commercial & Industrial, Communications, Infrastructure Solutions, and Residential. The company has strong fundamentals, with lower P/E, EV/Sales, and Price/Sales multiples compared to the industry averages. Its revenues and gross profit have also shown significant growth.
Garrett Motion Inc. (GTX) designs, manufactures, and sells turbocharger and electric-boosting technologies for vehicle manufacturers globally. The company recently announced agreements to simplify its capital structure and increase its stock buyback program. It has lower EV/Sales and EV/EBITDA multiples compared to the industry averages. GTX's net sales and gross profit have increased year-over-year, and analysts expect further growth in revenue and EPS.
Jiayin Group Inc. (JFIN) provides online consumer finance services in China. It operates a fintech platform that connects borrowers with financial institutions' funding partners. The company has lower P/E, EV/EBITDA, and Price/Sales multiples compared to the industry averages. JFIN has reported significant increases in net revenue, income from operations, and net income. The stock has shown strong performance in the past month and year.
Overall, these stocks offer solid investment opportunities in a volatile market. IESC, GTX, and JFIN have demonstrated strong fundamentals and have the potential for significant returns.