The broader markets correcting this morning as the number of COVID-19 cases grew in the US. The opening up of the economy was deemed to be risky by many and the after-effects of it can be seen in the steep rise in the number of cases. Experts believe that the next two weeks would be critical in determining how the pandemic evolves. A double hit this morning as the International Monetary Fund (IMF) came in with an economic outlook that looks grim, with the US output expected to shrink below what was expected in only April. The IMF expects a contraction in global output by 4.9%, significantly below the earlier forecast of 3%. There is a also a possibility of new restrictions being imposed, which could pose a serious threat to momentum that has been observed of late. Our deep learning algorithms have used Artificial Intelligence (“AI”) technology to identify several Top Buys today, amidst this pullback.
Argan Inc (AGX)
The first company on our list of Top Buys is Argan Inc. The company operates in the power industry services segment and provides services in engineering, procurement and construction to power projects mostly through one of its subsidiaries named Gemma Power Systems and affiliates. Our AI algorithms have identified factor scores of C in Technical, A in Growth, B in Momentum Volatility, and B in Quality Value for the stock that is up 4.94% this year. Revenue for the company stood at $482.2M in the last fiscal year compared to $675M three years ago. Operating income in the last fiscal fell to $41.7M from $114.2M three years ago. There has been a decline in EPS and ROE from $4.5 and 30.1% to $3.32 and 13.8% respectively in the last three fiscals. The company is expected to clock a strong revenue growth of 19.14% in the next 12 months and is currently trading at Forward 12M P/E of 34.1.
American States Water Co (AWR)
Next on the Top Buy list is American States Water Co which, through its subsidiaries, provides water, electric and contracted services primarily in California. Our deep learning algorithms have given factor scores of D in Technical, B in Growth, A in Momentum Volatility, and B in Quality Value to the stock that has lost 0.4% for the year. Revenue grew by 1.54% in the last fiscal year to $473.9M, growing by 9.21% over the last three fiscal years from $440.6M. Operating Income was $128.4M and grew by 4.67% in the last fiscal year, from $120.1M three years ago, a growth of 11.91% for the last three fiscal years. EPS grew by 2.29% over the last three fiscal years, growing from $1.88 three years ago to $2.28 in the last fiscal year. Revenue is expected to remain stagnant in the next fiscal. ROE was 14.5% in the last year compared to 13.5% three years ago, and the stock trades with a forward 12M P/E of 33.
CACI International Inc (CACI)
Caci Intl Inc is an information solution and service provider catering to departments and agencies within the US government and is a Top Buy today. Our AI has assigned factor scores of D in Technical, A in Growth, A in Momentum Volatility, and A in Quality Value to the stock that has lost 7.39% for the year. Revenue was $4,986.3M in the last fiscal year compared to $4,354.6M three years ago, with the growth rates being 12.27% and 28.56% for last fiscal and last 3 fiscals, respectively. There has been a steady rise in operating income from $297.3M three years ago to $390.3M in this fiscal. EPS stood at $10.46 in the last fiscal year compared to $6.53 three years ago. ROE was 11.9% in the last year up from 9.6% three years ago. Forward 12M revenue is expected to grow by 4.87% and the stock currently trades with a forward 12M P/E of 17.13.
Cognizant Tech Solutions (CTSH)
Cognizant Tech Solutions
La-Z-Boy Inc (LZB)
Our final Top Buy today is La-Z-Boy Inc