5 Stocks With High ROE to Profit as Markets Perform Erratically

Market Overview - The equity market experienced erratic movements, leading to volatility and a potential shift in the rate-cut narrative [1] - NVIDIA's strong quarterly performance initially boosted the market, but concerns about AI firm valuations have emerged [1] - Experts predict that growth in AI firms may not match the significant investments, suggesting a market correction may be imminent [1] Federal Reserve and Economic Indicators - Investors are anxious about the Federal Reserve's decision on lowering the benchmark borrowing rate in its upcoming meeting [2] - The delayed September jobs report indicated the economy added 119,000 jobs, exceeding expectations and reducing rate cut anticipations [2] - A "wait-and-see" approach is prevalent among investors, who are advised to focus on "cash cow" stocks with high returns [2] Investment Strategy - Identifying cash-rich stocks is essential, but it must be supported by strong efficiency ratios like return on equity (ROE) [2] - High ROE indicates effective reinvestment of cash at high returns, distinguishing profitable companies from less efficient ones [3][4] Screening Parameters for Stocks - The primary screening criteria include Cash Flow greater than $1 billion and ROE exceeding the industry average [5] - Additional metrics for screening include: - Price/Cash Flow lower than the industry average, indicating better value for cash flow [6] - Return on Assets (ROA) greater than the industry average, reflecting profitability per dollar of assets [6] - 5-Year EPS Historical Growth greater than the industry average, indicating sustained earnings momentum [7] - Zacks Rank of 1 (Strong Buy) or 2 (Buy), suggesting potential outperformance [7] Featured Companies - TE Connectivity: A global technology company with a long-term earnings growth expectation of 12.3% and a trailing four-quarter earnings surprise of 6.5%, carrying a Zacks Rank 2 [8][9] - ZTO Express: A leading express delivery service in China with a long-term earnings growth expectation of 1.7%, also holding a Zacks Rank 2 [10][11] - Corning: Known for its glass technologies, with a long-term earnings growth expectation of 18.2% and a trailing four-quarter earnings surprise of 4.1%, carrying a Zacks Rank 2 [11][12] - Assurant: A global provider of risk management solutions with a trailing four-quarter earnings surprise of 22.7% and a Zacks Rank 2 [12][13] - VICI Properties: An experiential real estate investment trust with a long-term earnings growth expectation of 4.2% and a trailing four-quarter earnings surprise of 0.4%, also holding a Zacks Rank 2 [14][15]