Let’s face it, it’s a tough market out there. Investors aren’t out of the woods yet despite the recovery and recent S&P 500 and Nasdaq rally this year. The Federal Reserve is still signaling a potential interest rate hike while we are already at the highest level in more than 22 years. These high-interest rates have crushed some regional banks and pressured the entire financial sector. Even with the cooling down of inflation based on previous months of data, we are still far away from completely recovering.
But the market can still reward those who look hard enough, despite the challenging conditions. We’ve seen big names in the tech sector push the market to bullish territory, leading the industry and carrying major indices despite tough times. However, investors might need to look elsewhere as the sector becomes more expensive and crowded. It may be time to look at different sectors to find stocks for a tough market.
Hartford Financial Services Group (HIG)
Hartford Financial Services Group (NYSE:HIG) is an investment and insurance holding company. HIGs segments offer insurance products and risk management to businesses and individuals, employee benefits and Hartford Funds. The company employs approximately 18,800 employees and serves over one million small businesses.
Hartford’s Q2 2023 revenue grew by 12.58% year-over-year (YOY), meeting expectations at $6.05 billion. EPS came in at $1.88, beating analyst estimates by 2.17%. The company’s management expects to meet its target profitability targets by 2025. It has taken steps in recent years to strengthen its capability to generate returns, lower risk and enhance its balance sheet. These steps involved restructuring, asset sales, reducing operating expenses and raising prices. The efforts to bolster their business against overall market impact make HIG one of the most attractive stocks for a tough market.
Mastercraft Boat Holdings (MCFT)
Mastercraft Boat Holdings (NASDAQ:MCFT) is a powerboat designer and manufacturing company with four leading brands. Those are NauticStar, Crest, MasterCraft and Aviara. MCFT’s products include premium wake, pontoon, saltwater fishing, deck and sports boats. The company’s subsidiaries include Crest Marine, Aviara Boats, MasterCraft Boat Company, Nautic Star, MasterCraft International Sales Administration, NS Transport and MasterCraft Parts.
MasterCraft’s Q3 2023 financials came in strong, with revenue beating estimates by 5.31% at $166.78 million. Even though revenue shrunk by 10.69% YOY, EPS beat estimates by 31.19% and grew by 12.40% at $1.36 EPS. The company has also announced its $50 million share repurchase program. With a strong balance sheet and growing earnings, positive analyst sentiment and a recovering economy, MCFT should be on any investors’ watchlist for the must-buy stocks for stability in their portfolio.
Wex Inc. (WEX)
WEX Inc. (NYSE:WEX) is a business support services firm that offers a global commerce platform that caters to solving complexities in business operations. Wex’s operations cater to businesses of all sizes and provide support on health, employee benefit, travel, corporate and fleet solutions. The company’s services offer payment and transaction processing, software as a service solutions and business-to-business payments.
Wex’s Q2 2023 revenue aligned with expectations as revenue reached $621.30 million, growing 3.86% YOY. EPS beat estimates by 3.42% but was lower by 2.16% YOY. While the quarter didn’t come in with stellar numbers, WEX still has a solid balance sheet and a healthy cash position to pay its bills and fund its future growth. Put that all together, and WEX may be another suitable target if you pick up stocks for a tough market.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines