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Zacks.com featured highlights include: Seagate Technology, Target, KLA Corp, CBRE Group and Emerson Electric

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·4 min read
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For Immediate Release

Chicago, IL – December 17, 2021 – Stocks in this week’s article are Seagate Technology Holdings PLC STX, Target Corp. TGT, KLA Corp. KLAC, CBRE Group, Inc. CBRE and Emerson Electric Company EMR.

5 High ROE Stocks to Buy as the Fed Aims to Control Inflation

U.S. equity markets witnessed intense volatility over the past few days as concerns regarding the fast-spreading Omicron variant of the coronavirus and rising inflation induced a downtrend. However, the Fed’s decision to speed up the bond tapering process and hike interest rates thrice next year appeared to soothe investor nerves and propelled the stocks, partially offsetting the downtrend.

The hawkish stance, primarily aimed to combat inflation, gave broad-based hints that the economic growth is well on track and does not require further Fed support. The pace of bond tapering would be doubled to $30 billion per month, bringing an end to the recurring asset purchases by March 2022. This would then follow three possible rate hikes to ease inflationary pressures. 

As investors employ a wait-and-see approach in a classic example of “backing and filling” in the market, they can benefit from ‘cash cow’ stocks that garner higher returns. However, identifying cash-rich stocks alone does not make for a solid investment proposition unless it is backed by attractive efficiency ratios like return on equity (ROE). A high ROE ensures that the company is reinvesting cash at a high rate of return.

ROE: A Key Metric

ROE = Net Income/Shareholders’ Equity

ROE helps investors distinguish profit-generating companies from profit burners and is useful in determining the financial health of a company. In other words, this financial metric enables investors to identify companies that diligently deploy cash for higher returns.

Moreover, ROE is often used to compare the profitability of a company with other firms in the industry — the higher, the better. It measures how well a company is multiplying its profits without investing new equity capital and portrays management’s efficiency in rewarding shareholders with attractive risk-adjusted returns.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1840120/5-high-roe-stocks-to-buy-as-fed-aims-to-control-inflation

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine.  But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Emerson Electric Co. (EMR) : Free Stock Analysis Report
 
Target Corporation (TGT) : Free Stock Analysis Report
 
Seagate Technology Holdings PLC (STX) : Free Stock Analysis Report
 
KLA Corporation (KLAC) : Free Stock Analysis Report
 
CBRE Group, Inc. (CBRE) : Free Stock Analysis Report
 
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