Do You Have These Top Cyclical Stocks On Your Watchlist?
For investors, cyclical stocks appear to be a very viable play in the stock market today. Naturally, this is thanks to how closely companies in this industry follow the cycles of the economy, hence the name. While most investors would know this, what exactly are cyclical stocks, might you ask? For the most part, cyclical stocks represent companies that produce or market discretionary wares and services. The likes of which are often in demand when the economy is doing well. This ranges from top airline stocks like American Airlines (NASDAQ: AAL) to vital manufacturing companies such as Honeywell (NASDAQ: HON). Overall, with the economy booming now, some investors would argue that cyclical stocks could do the same.
Just last week, CNBC’s Jim Cramer commented on the recent tech pullbacks and how they relate to cyclicals. Namely, the Mad Money host argues that high growth tech stocks are now a “source of funds” for cyclical stocks. Moreover, Cramer also believes that cyclical players whose products are in strong demand while supplies remain limited could continue gaining. Fortunately for investors, there are plenty of companies to choose from in this category now. On that note, here are five of the hottest cyclical stocks in the stock market now.
Best Cyclical Stocks To Watch Today
- Target Inc. (NYSE: TGT)
- Exxon Mobil (NYSE: XOM)
- TJX Companies Inc. (NYSE: TJX)
- Walmart Inc. (NYSE: WMT)
- L Brands Inc. (NYSE: LB)
Target is a cyclical company that focuses on retail. In fact, it is one of the largest retailers in the U.S. and is a component of the S&P 500 Index. The company boasts over 1,900 stores in the U.S. and has over 40 distribution centers.
Impressively, the company claims that 75% of the U.S. population lives within 10 miles of a Target store. Target has been one of the few cyclical companies that weathered through the pandemic exceptionally well. The company reported its first-quarter financials Wednesday.
Comparable sales for the quarter increased by 22.9% year-over-year. Digital comparable sales grew by a commendable 50%, on top of a 141% growth a year ago. First-quarter GAAP earnings per share was $4.17, skyrocketing by 643.2% compared to a year ago. It also gained more than $1 billion in market share in the first quarter. Total revenue for the quarter was a whopping $24.19 billion, a 23.4% increase year-over-year. Given all of this, will you consider adding TGT stock to your watchlist?
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Exxon Mobil Corporation
Exxon is a multinational oil and gas corporation that is headquartered in Texas. In essence, it is an industry leader in the energy and chemical manufacturing businesses. The company has also invested heavily in the research and development of next-generation technologies to help fuel global economies and address risks of climate change. XOM stock has been up by over 40% year-to-date.
In late April, the company reported its first-quarter financials for 2021. In it, ExxonMobil reported earnings of $2.7 billion for the quarter or $0.64 per share assuming dilution compared with a loss of $610 million a year ago. Its cash flow from operating activities of $9.3 billion fully funded its dividend and capital expenditures.
Also, it reduced its debt by over $4 billion as well. The company also continues to advance several initiatives to reduce emissions. ExxonMobil also launched its Low Carbon Solutions business to commercialize an extensive low-carbon technology portfolio. For these reasons, is XOM stock a top cyclical stock to consider watching?
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TJX Companies Inc.
TJX is a multinational off-price department store corporation. The company has over 4,500 stores in nine countries, four e-commerce sites, and approximately 320,000 associates. Its mission is to deliver great value every day to its customers.
Specifically, its goods and products are generally 20% to 60% below full-price retailers. The company also reported its first-quarter financials Wednesday and has exceeded its expectations.
Firstly, overall open-only comparable store sales increased by 16% compared to a year ago. Net sales for the quarter were $10.1 billion, more than doubling year-over-year. Its HomeGoods segment comparable sales increased by 40% year-over-year. It also reported that its U.S. divisions delivered outstanding double-digit open-only comp store sales increases. With so much happening with the company, is TJX stock worth watching right now?
Next, we will be looking at the world’s largest retailer, Walmart. Through its massive network of hypermarkets spanning 24 countries, the company continues to dominate the retail space. According to Walmart, it’s over 10,000 stores cater to an estimated 220 million customers and members globally. More importantly, WMT stock would be in the spotlight now thanks to the company’s recent quarterly earnings posted Tuesday.
Notably, Walmart reported earnings per share of $1.69 on revenue of $138.3 billion for the quarter, beating Wall Street’s estimates. According to CEO Doug McMillon, this is mostly thanks to Walmart’s rapidly growing e-commerce sales.
Looking forward, the company also seems confident, raising its full-year 2021 earnings outlook on anticipated “pent-up demand throughout 2021”. Solid earnings aside, Walmart seems to be busy expanding its services as well. Just last week, the company acquired virtual fitting room company, Zeekit, marking a push into the apparel market. Given all of this, would you say that WMT stock is a top watch in the stock market today?
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L Brands Inc.
Following that, we have yet another top player in the retail space now, L Brands. If anything, most consumers today would be familiar with the company’s flagship Victoria’s Secret and Bath & Body Works brands. In terms of scale, the company operates out of over 2,600 stores in the U.S., Canada, and Greater China. Not to mention, L Brands also boasts 700 franchise locations across the rest of the globe.
Ideally, as consumer spending trends gain momentum, L Brands would stand to benefit in the long run. This could put LB stock on investors’ radars today seeing as it is slated to post first-quarter earnings after the closing bell. As it stands, the company’s shares are currently looking at massive gains of over 400% in the past year.
Speaking of its upcoming earnings report, L Brands appears confident of its ability to perform. Back in March, the company raised its earnings per share top-line estimates for the quarter by over 50%. According to L Brands, this is mainly thanks to improving sales trends boosted by favorable consumer spending habits. Meanwhile, the company is also looking to spin off its two key divisions as per its latest news release last week. Given all of this, we could be looking at exciting times ahead for LB stock. Having said that, will you be keeping an eye on it now?