Are These Top Cyclical Stocks Worth Watching Now?
While cyclical stocks may not be in the best position in the stock market today, investors may not want to dismiss the sector entirely. For one thing, some of the biggest cyclical firms are taking a breather amidst the current downturn in markets. Accordingly, this would be due to the ongoing rotation out of growth stocks towards value stocks among other defensive spaces. For those uninitiated, cyclical stocks mainly consist of consumer discretionary stocks and industrial stocks. Both of which often grow alongside the economy.
For example, we could look at the likes of Netflix (NASDAQ: NFLX) and Intel (NASDAQ: INTC) now. On one hand, Netflix continues to entertain the masses amidst the current pandemic. If anything, the company has and continues to churn out top-quality content in the process. Following its latest quarterly earnings report yesterday, NFLX stock tumbled. Namely, this would be due to its weak guidance for subscriber growth for the current quarter. Considering that this is in comparison to banner years for Netflix, this conservative estimate is understandable.
On the other hand, chip companies like Intel remain hard at work growing their operations. This would be a response to the global chip shortages. As of today, Intel is currently planning to invest $20 billion towards constructing a new manufacturing facility near Columbus, Ohio. In detail, the firm is looking to build at least two chip fab plants on the 1000-acre site. The likes of which it projects should be operational by 2025. CEO Pat Gelsinger notes that Intel is looking to make it the “largest silicon manufacturing location on the planet.” By and large, there appears to be plenty of activity among cyclical stocks now. Could one of these be top picks in the stock market now?
Best Cyclical Stocks To Consider Ahead Of February 2022
- Schlumberger Limited (NYSE: SLB)
- Robinhood Markets Inc. (NASDAQ: HOOD)
- Walt Disney Company (NYSE: DIS)
Schlumberger is a cyclical company that provides oilfield services. With expertise in more than 120 countries, the company partners with customers to create industry-changing technologies to unlock cleaner and safer access to energy. Notably, it also has a Transition Technologies portfolio to address sustainability challenges and opportunities across the oil and gas industry value chain. The company helps customers address methane emissions and also aid in the electrification of infrastructure.
Today, the company reported stronger than expected fourth-quarter and full-year 2021 earnings. Diving in, revenue for the quarter was $6.22 billion, an increase of 13% year-over-year. Fourth-quarter GAAP earnings per share were $0.42, increasing by 56% compared to a year earlier. The company’s Board of Directors has also approved a quarterly cash dividend of $0.125 per share. Schlumberger CEO Olivier Le Peuch commented, “Strengthening activity, accelerating digital sales, and outstanding free cash flow performance combined to deliver another quarter of remarkable financial results to close the year with great momentum.”
Furthermore, Schlumberger says that the industry macro fundamentals are very favorable for the company as it heads into 2022. This is due to the combination of projected steady demand recovery, an increasingly tight supply market, and supportive oil prices. It also believes that this will result in a material step-up in the industry capital spending with double-digit growth in international and North American markets. All things considered, is SLB stock worth investing in?
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Robinhood Markets Inc.
Robinhood is a financial services company that is known for pioneering commission-free trades of stocks, exchange-traded funds, and also cryptocurrencies. It does this through its mobile app that is used by millions all over the world. On Thursday, the company announced that its Crypto Wallet Beta Program is live.
In detail, it will begin rolling out crypto Wallets to 1,000 customers from the top of its wallets waitlist. By March, it will be expanding the program to another 10,000 customers before rolling out the rest of the waitlist. This is the second major milestone for its Wallets rollout that will enable customers to send and receive their crypto from Robinhood to external crypto wallets. Its end goal would of course be to connect the millions of Robinhood customers to the blockchain ecosystem in a safe and accessible setting.
The company will also be announcing the release of its fourth-quarter and full-year 2021 financial results next Thursday, January 27, 2022. Earlier in the month, the company also welcomed Steve Quirk as Chief Brokerage Officer to oversee its broker-dealers, Robinhood Financials, and Robinhood Securities. As the company’s first-ever Chief Brokerage Officer, Mr. Quirk will help scale its products and services efficiently and safely. He has over 35 years of experience in the brokerage industry to help bring the best of finance and technology for Robinhood users. With that being said, is HOOD stock worth watching?
Walt Disney Company
Disney could also be worth considering among the top cyclical stocks in the market today. For the most part, this would be thanks to its unparalleled portfolio of entertainment assets. The likes of which span some of the biggest IPs in the media world to its library of timeless classics. Not to mention, the company continues to produce unforgettable new content as well. This is evident from its latest musical film Encanto topping music charts.
With the company’s shares trading lower by over 5% year-to-date, would investors be wise to jump on? Well, to highlight, Disney is not sitting idly by despite the current weakness in stocks. As of earlier this week, the company now has a new international content group (ICG). Through this ICG, the company is looking to grow its pipeline of local content alongside its global direct-to-consumer business.
All in all, this would be a solid play by Disney. As things continue to heat up in the video streaming industry, the firm is, accordingly, putting more emphasis on its streaming offerings. As it stands, Disney is already looking to double the number of countries with access to Disney+ to over 160 by 2023. After considering all of this, would DIS stock be a top watch for you?
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