What Are Cyclical Stocks? Here Are 5 To Check Out Today
Cyclical stocks are a type of stock that experiences regular ups and downs, corresponding to the cyclical nature of the company’s business. For example, a company that manufactures cars will usually see its stock price rise in the lead up to winter, when demand for cars is typically high. Vice versa, they’d fall in the spring, when demand is lower. Similarly, a company that produces construction materials will see its stock price rising in anticipation of a housing boom, and falling when the boom comes to an end. Cyclical stocks are often seen as being riskier than non-cyclical stocks, but they can also offer greater potential rewards for investors who are willing to take on the risk.
Meanwhile, as investors look for recession-proof stocks amid the current instability in the stock market, cyclical stocks could be in focus. Sure, many would debate that with a recession lingering, cyclical stocks would not be the best option right now. However, such a broad-based macroeconomic headwind would, arguably, impact stocks across the board regardless. If you are keen on investing in top cyclical stocks, here are five to watch in the stock market today.
Cyclical Stocks To Watch Right Now
- Visa Inc. (NYSE: V)
- Chewy, Inc. (NYSE: CHWY)
- NVIDIA Corporation (NASDAQ: NVDA)
- Kraft Heinz Company (NASDAQ: KHC)
- Bank Of America Corporation (NYSE: BAC)
Visa Inc. (NYSE: V)
First up, we have a top fintech company, Visa. The payments technology company provides digital payments across more than 200 countries around the globe. With its wide array of services, it connects consumers, merchants, financial institutions, and government entities to electronic payments. Separate from that, most consumers would also be familiar with its Visa-branded credit and debit cards. Meanwhile, shares of V stock are up over 3% in the last month of trading. As of Wednesday afternoon V stock is trading at $208.30.
Furthermore, Visa recently reported a beat for its fiscal third quarter 2022 results. In the report, the company posted earnings of $1.98 per share on revenue of $7.3 billion. Wall Street consensus earnings estimate was $1.74 per share on revenue of $7.1 billion. Chairman & CEO Alfred Kelly, Jr stated, “Against the backdrop of macroeconomic uncertainty, significant exchange rate headwinds and the suspension of our business in Russia, Visa had a very strong quarter, with net revenues up 19%, GAAP EPS up 36% and non-GAAP EPS up 33%. Sustained levels of growth in overall payments volume, cross-border volume and processed transactions demonstrated the resiliency of our business model.” Considering this, is V stock a buy right now?
Chewy (NYSE: CHWY)
Next, we have online pet retail company Chewy (CHWY). In brief, the company is a pure-play e-commerce company that caters to pet products. Chewy prides itself on delivering the best services as customer satisfaction remains its top priority. Its most notable brands include A Pet Hub, A Pet’s Life, ABO Gear, Bark, KONG, and others. Additionally, CHWY stock has recovered more than 3.7% over the past month. As of Wednesday afternoon, shares of CHWY stock are trading at $42.08 per share.
In June, the company reported its first quarter 2022 financial results. Specifically, the e-commerce retailer notched in earnings of $0.04 per share on revenue of $2.4 billion. The consensus expectation was a loss of $0.12 per share on revenue of $2.4 billion. In its letter to shareholders, CHWY said it estimates second-quarter revenue of $2.43 billion to $2.46 billion. The current consensus revenue estimate is $2.47 billion for the quarter.
“Fiscal year 2022 is off to a good start as we drove solid 14 percent top-line growth and delivered sequential improvements in gross margin and profitability,” commented Sumit Singh, Chief Executive Officer of Chewy. “Our first quarter results are a testament to the resiliency of the pet category and clearly demonstrate our ability to execute against our strategic priorities.” All in all, is CHWY stock on your watchlist of top cyclical stocks in the stock market today?
NVIDIA Corp (NASDAQ: NVDA)
Following that, we have semiconductor giant NVIDIA Corp. (NVDA). The multinational tech company that sells its graphics processing unit (GPU) and tech services. As a matter of fact, NVIDIA is a pioneer of GPUs and has played a significant role in the growth of high-performance computing and artificial intelligence (AI).
In July, NVIDIA announced its hybrid quantum-classical computing platform. In detail, their unified computing platform helps accelerate breakthroughs in quantum research. As well as development across a variety of industries such as artificial intelligence, health, finance, and others. “Scientific breakthroughs can occur in the near term with hybrid solutions combining classical computing and quantum computing,” stated Tim Costa, director of HPC and Quantum Computing Products at NVIDIA. “QODA will revolutionize quantum computing by giving developers a powerful and productive programming model.” As of Wednesday afternoon shares of NVDA stock are trading higher by 1.35% at $187.77 per share.
Kraft Heinz Company (NASDAQ: KHC)
Moving along, let’s take a look at Kraft Heinz Company (KHC). For the uninitiated, the company manufactures and markets products such as condiments, dairy, meats, coffee, and other grocery products across the globe. Most notably, its portfolio brands include names such as Kraft, Heinz, Velveeta, Jell-O, Grey Poupon, and Philadelphia to name a few. For context, Kraft Heinz is one of the biggest food and beverage companies in North America.
In July, KHC reported its second quarter 2022 fiscal results. In detail, Kraft Heinz reported earnings per share of $0.70 on revenue of $6.6 billion. Wall Street consensus earnings estimate was $0.67 per share on revenue of $6.4 billion. Next, the company reported a 0.9% decline in revenue, compared to the same quarter of 2021. Additionally, the company provided some guidance in the earnings report. The company estimates a 2022 revenue of approximately $28.0 billion. The company reported previous guidance of revenue at nearly $27.34 billion. Meanwhile, the current consensus revenue estimate is $25.62 billion. With that, shares of KHC are trading modestly higher on Wednesday at $37.25 per share.
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Bank Of America Corporation (NYSE: BAC)
Lastly, let’s check out Bank Of America Corporation (BAC). The company is a major financial institution with business operations across Consumer Banking, Global Wealth & Investment Management, Global Banking, and Global Markets. Its Consumer Banking segment offers a variety of credit, banking, and investment products to consumers and small businesses. Also, its Global Markets segment offers sales and trading services and research services to institutional clients across fixed-income, credit, currency, commodity, and equity businesses.
Share of BAC stock has rebounded by over 7% in the last month of trading. On Wednesday, BAC stock was trading at $33.62 per share. This rally has been fueled by the company’s reporting its more recent quarterly earnings results. In the report, BAC posted earnings per share of $0.73 on revenue of $25.2 billion. For context, wall street estimates were at $0.77 per share on revenue of $22.8 billion. This means, that although BAC missed on earnings per share, they beat revenue estimates. Now, would you add BAC to your list of cyclical stocks today?