The Fed’s consecutive rate hikes have caused immense volatility in the market. Moreover, traders are betting on a more than 95% chance of another 75-bps rate hike in November.

However, the stock market is gaining as investors weigh several key earnings reports. This corporate earnings season could offer some relief for markets battered by macroeconomic concerns. Of the 64 S&P 500 companies that have reported third-quarter earnings, more than 70% have reported a positive surprise, according to FactSet data.

Louis Navellier, chairman of Navellier & Associates, said, “Short covering rallies are how markets reverse.”

Given the backdrop, we think investors should scoop up quality stocks Verizon Communications Inc. (VZ) and AudioCodes Ltd. (AUDC) now. These stocks are trading under $40 and could be ideal Buys for Q4.

Verizon Communications Inc. (VZ)

VZ and its subsidiaries offer communications, technology, information, and entertainment products and services worldwide to consumers, businesses, and governmental entities. Its segments are Consumer and Business.

On October 17, 2022, VZ and Razer, the leading global lifestyle brand for gamers, launched the Razer Edge 5G, the ultimate 5G handheld gaming device. This will introduce a gaming experience on the go with near-zero latency and is expected to attract a lot of consumers in today’s advanced digital world.

VZ’s total operating revenues came in at $33.79 billion for the quarter ended June 30, 2022, up marginally year-over-year. Its wireless equipment revenues came in at $6.67 billion, up 20.4% year-over-year. Also, its total broadband connections came in at $790,000, up 51.1% year-over-year.

For 2022, analysts expect VZ’s revenue to increase 2% year-over-year to $136.25 billion. Its EPS is expected to increase by 3.4% per annum for the next five years. It surpassed EPS estimates in three of four trailing quarters. VZ’s shares have gained marginally intraday to close the last trading session at $37.13.

VZ’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its weighting.

Also, the stock has a B grade for Stability. Within the Telecom – Domestic industry, it is ranked #3 out of 20 stocks. 

Click here to see the additional POWR Ratings for Growth, Value, Momentum, Sentiment, and Quality for VZ.

AudioCodes Ltd. (AUDC)

AUDC provides advanced communications software, products, and productivity solutions for the digital workplace. The company offers solutions, products, and services for unified communications, contact centers, VoiceAI business lines, and service provider businesses.

AUDC’s revenues came in at $68.36 million for the 2022 second quarter, up 12.8% year-over-year. Its service revenue came in at $27.77 million, up 21.9% year-over-year. Moreover, its gross profit came in at $88.87 million, up 7.9% year-over-year.

Street expects AUDC’s revenue to increase 11.9% year-over-year to $278.55 million in 2022. Its EPS is estimated to increase by 14.1% per annum for the next five years. AUDC’s shares have gained marginally intraday to close the last trading session at $19.37.

AUDC has an overall A rating, which translates to a Strong Buy in our proprietary rating system. Additionally, it has an A grade for Quality and a B for Value, Stability, and Sentiment. Within the Technology - Communication/Networking industry, it is ranked first among 50 stocks. 

Click here for the additional POWR Ratings for Growth and Momentum for AUDC.

VZ shares were trading at $37.02 per share on Thursday afternoon, up $0.45 (+1.23%). Year-to-date, VZ has declined -24.85%, versus a -22.24% rise in the benchmark S&P 500 index during the same period.

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

More...