Meanwhile, Morningstar, an American financial services firm, on October 6, discussed with their in-house experts the headwinds facing stocks and where investors could find shelter in Q4 2022. Morningstar’s Chief US strategist Dave Sekera initially touched on troubles seen in Q3 before moving onto areas where market participants could find value in Q4 2022. He added:
Where to hide in Q4
Wide-moat stocks with solid competitive advantages should do well in any environment, is an adage repeated by Morningstar analysts, despite the outsized losses the market has seen in 2022 in general. In particular, Sekere mentioned three picks, one in the MedTech space is Zimmer Biomet Holdings (NYSE: ZBH), the second one is Illumina(NASDAQ: ILMN), and the third was Zoetis (NYSE: ZTS). For ZBH, Sekera sees a 36% discount to fair value with the pandemic pushing operating procedures to the back burner, and now that backlog and the natural growth in the sector are going to propel the stock forward. Further, he states ILMN is at a 35% discount to fair value, with a product in the liquid biopsy space expected to hit markets in the next couple of years, with the ability to screen up to 50 different cancers, a major differentiator in the space. Finally, ZTS is at a 20% discount to fair value, according to Sekera, where the analysis was focused on pet care, where a trend for pet owners to spend more has been noted and could provide growth opportunities for the firm. All three companies, according to Sekera, could see secular growth and possess wide moats, which should help return value to shareholders over time. Buy stocks now with Interactive Brokers – the most advanced investment platform Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
