These stocks are expected to generate loads of cash, Barclays says
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Barclays provides some picks with buy ratings that can help investors find quality stocks in the wake of a turbulent month for equity markets. They are inexpensive and should generate lots cash. Stocks struggled to find direction on Tuesday in the last day of May trading. All month, stocks have logged some wild moves, with the S & P 500 briefly dipping into bear market territory. All three major averages remain well off their highs with the Dow Jones Industrial Average about 11% below its record, the S & P 500 down more than 14%, and the Nasdaq off by roughly 26%. Barclays published a research report over the weekend that identified overweight-rated companies. These names look cheap when you consider the expected cash flow of each company over the next 2 years. Analysts estimate these companies will have a free cash flow yield of at least 8% through the end of next year, which would put them into the top quintile within the S & P 500. Each member boasts at least $1B market capital and could have a 10% price target increase. Barclays identified 23 stocks that met its criteria. Here are twelve of them. The shares of Dick’s Sporting Goods appear cheap despite the fact that the retailer has lowered its financial outlook. Since the beginning of the year, the stock price has dropped nearly 29%. Lauren Hobart, Dick’s CEO has not lost confidence in company strategy. She believes that shoppers will continue to enjoy outdoor activities even after the pandemic. Barclays stated that the stock will have a 10% free cash flow yield through 2022 and 13% through 2030. Victoria’s Secret shares have plunged by more than 22% in the past year. It has tried to fix its business. MKM Partners declared that the retailer was one of the “best stories in retail” with evidence of improvement to its fundamentals. On Tuesday, the retailer will report its earnings after the bell. Barclays stated that Victoria’s Secret shares will have a 20% free cash flow yield in 2022, and 2023. Barclays stated that GoDaddy shares could see a 60% increase in value from Thursday’s close price. Wedbush analysts noted earlier in the month that GoDaddy looks like an “excellent investment in a volatile market” due to its strong foundations and solid free cash flow. Wedbush also highlighted GoDaddy’s latest commerce products. Barclays indicated that GoDaddy is expected to have a free cash flow yield between 10% and 20% in 2022 and 11% by 2023. Barclay’s stock list also includes Liberty SiriusXM Group. Bloomin’ brands. KB Home. General Motors. Kosmos Energy. Tenet Healthcare. Fidelity National Information Services. Micron Technology. CenterPoint Energy.
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