Got $2,000? Buy and Hold These 2 Market-Beating Stocks
Brushing aside an uncomfortable July inflation report, the Dow Jones Industrial Average hit a record 35,501.16 high yesterday and closed the session at 35,484.97, gaining 0.6%. The S&P 500 also hit its all-time high of 4,449.44 and closed the session 0.2% higher than its 4,447.70 prior close. Although the consumer price index rose 5.4% year-over-year in July, the increase in core inflation was lower than expected.
However, the resurgence of COVID-19 cases due to the rapid spread of the highly transmissible Delta variant and potential tax increases have heightened concerns among investors and analysts regarding the potential for a market correction in the near term. For example, Peter Cecchini, the director of research at Axonic Capital, recently asserted that “Equities are in for a sizable correction.” Furthermore, renewed lockdown measures and travel restrictions could pose considerable risks to the economic recovery.
Because the market is expected to remain volatile, we believe that if one had $2000 in disposable cash one should consider investing in market-beating stocks Eli Lilly and Company (LLY) and Oracle Corporation (ORCL) because they possess sufficient fundamental strength to continue advancing.
Eli Lilly and Company (LLY)
LLY is an Indianapolis, Ind.-based pharmaceutical company that develops and markets high-quality medicines worldwide. Its product portfolio includes Humulin R, Humulin U-500, and Lyumjev for diabetes; Reyvow for migraine; Bamlanivimab and etesevimab for COVID-19; and Zyprexa for schizophrenia, among other therapies. In addition, the company has strategic collaborations with Pfizer Inc. (PFE); ImmuNext, Inc.; The Banner Alzheimer’s Institute; and other pharmaceutical companies.
On August 3, LLY and Incyte announced the results of their Phase 3 COV-BARRIER trial. According to this sub-study, patients with COVID-19 who received baricitinib had a 46% risk reduction in mortality by Day 28.b The study demonstrates the significant role LLY’s baricitinib drug may continue to play in treating COVID-19 in certain patients.
Last month, the company’s research and development group, Loxo Oncology, collaborated with Kumquat Biosciences to discover, develop and commercialize novel small molecules that stimulate tumor-specific immune responses. MSI expects to close the transaction by the end of the month. LLY could identify several drug candidates for further development and commercialization internationally through this partnership, except in Greater China.
During the second quarter, ended June 30, 2021, LLY’s revenue totaled $6.74 billion, representing a 23% increase from the prior-year quarter, driven by a 22% increase in volume. Its worldwide revenue for its COVID-19 antibodies stood at $148.9 million. The company’s non-GAAP net income came in at $1.70 billion, up 29% year-over-year. In addition, its non-GAAP EPS increased 29% year-over-year to $1.87. LLY’s gross margin rose 12% from its year-ago value to $4.79 billion during this quarter.
A $1.89 consensus EPS estimate for the next quarter, ending September 30, 2021, represents a 22.7% improvement year-over-year. The $27.22 billion consensus revenue estimate for the current year represents a 10.9% increase from the same period last year. LLY’s stock has gained 76.1% over the past year to close yesterday’s trading session at $264.10. Also, the stock has returned 59.6% so far this year.
It’s no surprise that LLY has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.
LLY has a B grade for Stability and Quality. Of the 217 stocks in the Medical – Pharmaceuticals industry, it is ranked #14.
Click here to view additional LLY ratings for Growth, Momentum, Value, and Sentiment.
Oracle Corporation (ORCL)
ORCL is a leading computer software company and the world’s largest database management corporation. The Redwood City, Calif.-based company offers Oracle application licenses; Oracle Fusion cloud enterprise resource planning (ERP); Oracle Fusion cloud advertising and customer experience; Oracle license support services; and NetSuite applications suite. In addition, ORCL provides Oracle engineered systems, management software, and related hardware services.
This month, ORCL introduced a new component of MySQL HeatWave service, MySQL Autopilot, for the MySQL Database Service in Oracle Cloud Infrastructure. This new component will automate challenging aspects of achieving high query performance at scale and significantly improve system performance over time.
Last month, ORCL and the Golden State Warriors professional basketball team expanded their longstanding collaboration with the launch of Oracle Performance Center. The NBA’s advanced performance center will help the company power better player insights and offer a custom high-performance system.
ORCL’s revenues increased 8% year-over-year to $11.2 billion in its fiscal first quarter, ended May 31, 2021. The company’s cloud services and license support revenues rose 8%, while its cloud license and on-premises license revenues grew 9% over this period. Its non-GAAP operating income grew 6% year-over-year to $5.40 billion, while its operating margin stood at 49%. ORCL’s non-GAAP net income surged 20% year-over-year to $4.5 billion. In addition, its non-GAAP EPS amounted to $1.54, up 29% year-over-year.
Analysts expect ORCL’s EPS for 2022 to increase 11.1% year-over-year. In addition, the company’s revenue is expected to grow 4.4% in the current year and 4.4% next year. Over the past year, the stock has gained 63.2%. Also, ORCL’s stock has returned 41.7% over the past six months. It closed yesterday’s trading session at $89.63.
ORCL’s POWR Ratings reflect this promising outlook. It has an overall B rating, which equates to Buy in our POWR Ratings system. The stock has a B grade for Stability, Quality, and Value. It is ranked #10 of 143 stocks in the Software – Application industry.
In addition to the grades we’ve highlighted, you can view ORCL ratings for Sentiment, Momentum, and Growth here.
LLY shares rose $0.20 (+0.08%) in premarket trading Thursday. Year-to-date, LLY has gained 57.77%, versus a 19.47% rise in the benchmark S&P 500 index during the same period.
About the Author: Imon Ghosh
Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More…