Slow Jobs, Fast Profits: 7 Stocks to Scoop Up After April’s Lackluster Report

After several months of gangbuster growth in the employment arena, the Federal Reserve finally got some “good” bad news – and that sets the stage for certain stocks to buy.

In April, the economy added 175,000 jobs, much lower than the 240,000 expected by analysts. Further, the latest print represented a substantial drop from March’s result of 315,000 jobs added. As well, the unemployment rate ticked up to 3.9%. Expectations called for the rate to hold steady at 3.8%.

On one hand, this dynamic means that the Fed finally may have the excuse to lower interest rates. But on the other hand, a slowing economy could reward some enterprises over others. With that in mind, below are stocks to buy following April’s lackluster report.

Ollie’s Bargain Outlet (OLLI)

As a retailer of brand name merchandise at reduced rates, Ollie’s Bargain Outlet (NASDAQ:OLLI) offers a viable idea for stocks to buy. Under a challenging economic environment, it’s not that people are not opening their wallets. Rather, they want to do so with the least pain possible. The dynamic suits OLLI to a “T,” making it an attractive idea.

Certainly, the company deserves consideration thanks to its consistent performances. In fiscal 2024, the company’s average positive earnings surprise came out to 8.6%. It’s not the most sterling print ever. However, what I appreciate about Ollie is that it’s consistently profitable and it gets the job done.

For this consistency, OLLI stock trades at a trailing-year revenue multiple of 2.3X. That’s really hot for the industry and it’s one of the items that’s not on sale here. Still, analysts project solid fiscal expansion this year, with earnings per share landing at $3.21 on revenue of $2.27 billion. Last year, the company posted EPS of $2.91 on sales of $2.1 billion.

Ross Stores (ROST)

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Falling under the apparel retail space, Ross Stores (NASDAQ:ROST) is an off-price department store retailer. At first glance, it might not seem that relevant of an idea. However, with the unemployment rate ticking higher, it implies that more companies are not hiring and even laying folks off. If that’s the case, people need to dress for success. Ross enables this endeavor to happen at a reduced cost.

While it might be an oddball narrative, the market appreciates the thesis apparently. In fiscal 2023, Ross Stores’ average positive earnings surprise came out to nearly 9%. Again, it’s not an exciting print but the company consistently beats its bottom-line targets. That’s all you can ask for during this challenging time.

As a retailer, ROST trades at a hot revenue multiple; we’re talking 2.21X trailing-year sales. However, analysts are looking forward to fiscal expansion for this year. EPS could reach $5.94 on sales of $21.3 billion. Last year, the company delivered earnings of $5.56 with a top line of $20.38 billion. Given the rising relevance, ROST is one of the stocks to buy.

Procter & Gamble (PG)

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A household goods giant, Procter & Gamble (NYSE:PG) benefits from everyday utility. It doesn’t matter what’s going on with the economy. Chances are, you’re going to eat. Moreover, you will engage in many other activities that require care items, which P&G provides. Further, as a family brand, the company benefits from generational awareness.

Basically, if your parents happened to use certain P&G products, there’s a good chance you’ll use them too. That familiarity just doesn’t apply to many other enterprises, which could give PG an edge as one of the stocks to buy. To be sure, this isn’t the most exciting company out there. However, it’s consistently profitable, yielding an average earnings surprise of 6.55% in the past four quarters since the first quarter of 2024.

For the current fiscal year, covering experts project EPS to land at $6.55 on sales of $84.36 billion. Last year, it delivered earnings of $5.90 per share on sales of $82.01 billion. With a forward dividend yield of 2.41%, PG makes a nice addition to your stocks to buy.

Grocery Outlet (GO)

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A self-explanatory business, Grocery Outlet (NASDAQ:GO) operates in the grocery store industry. However, it distinguishes itself from the competition through its independent operations. It also offers various food categories – including fresh produce and meat – at discounted prices. Obviously, that presents an attractive business model during this challenging economic environment.

That said, GO stock is itself challenged. In the business week ending May 10, the company suffered a nearly 20% drop in equity value. Unfortunately, management didn’t impress with its latest Q1 earnings report. It’s a shame because, in the three quarters preceding Q1, the average earnings surprise stood at 16.8%.

However, with Grocery Outlet brought back to reality, it’s possible that GO could be a de-risked opportunity. It’s going to be a tough call and analysts have downgraded their expectations. Still, if the original revenue forecast for fiscal 2024 of $4.35 billion holds true, GO could be off to the races. It’s not unreasonable to think this given that consumers must spend on the essentials and thus forego discretionary items.

For speculators, it’s one of the stocks to buy.

Portland General (POR)

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A relatively small utility firm, Portland General (NYSE:POR) presents an intriguing idea for stocks to buy. As a utility company, it enjoys a natural monopoly. Basically, would-be competitors don’t even bother due to the high barriers to entry. At the same time, Portland General benefits from geographic advantages. Namely, young people are moving to more rural regions due to cost-of-living incentives.

In other words, Portland General – while it may be a smaller entity – is positioned where the money will be. That makes it a hidden gem among stocks to buy. Further, people must pay their utility bills and so the prioritization effect could benefit shares as well. While it’s trading flat for the year, over the past month, shares gained over 9%.

For the current fiscal year, experts believe EPS will reach $3.07 on revenue of $3.04 billion. Last year, the company posted earnings of $2.38 on sales of $2.92 billion. And in the following year, revenue could swing up again to $3.21 billion.

Portland General also carries a robust forward yield of 4.49%.

Encore Capital (ECPG)

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A terribly cynical idea for stocks to buy, Encore Capital (NASDAQ:ECPG) is a specialty finance firm. Per its public profile, Encore offers debt recovery solutions and other related services for consumers. The company purchases portfolios of defaulted consumer receivables at deep discounts to face value. It then “manages” these debts by working with individuals to repay their obligations.

Obviously, it’s not the most heartwarming company: no one likes being called hundreds of times to pay off financial obligations. At the same time, it’s a necessary service. Plus, consumers shouldn’t be in over their heads to begin with. However, with the challenges of the current economic cycle, you got to imagine that business will be good for Encore.

Indeed, for fiscal 2024, covering experts believe EPS will soar to $5.62. Last year, the company produced earnings of $2.13 per share. Further, the high-side target calls for $5.76 per share. On the top line, revenue could hit $1.41 billion, up 15.1% from last year’s print of $1.22 billion.

Robert Half (RHI)

As an employment services specialist, Robert Half (NYSE:RHI) presents an interesting business. Yes, it’s somewhat controversial among some circles, with the criticism that it fleeces the flock. However, that’s really the case for any middleman entity. Still, in the current environment, Robert Half could rise to the forefront with its focus on accounting and similar roles.

As The Wall Street Journal pointed out, white-collar jobs are harder to get these days. That’s probably going to be truer as the months tick by. With companies suffering from economic troubles themselves, layoffs could materialize. Naturally, this dynamic suggests that the labor market could become much more competitive. That’s when Robert Half could flex its muscles with its connections.

To be sure, RHI represents the riskiest idea arguably on this list of stocks to buy. Currently, analysts rate shares as a consensus moderate sell. That’s based on downward expectations for earnings and revenue in fiscal 2024. However, a recovery could take place in fiscal 2025.

Still, what if the recovery occurred earlier than expected? That’s the crux of the buy argument for Robert Half.

On the date of publication, Josh Enomoto 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.