Are These The Best Cyclical Stocks To Invest In Today?
Amid all the back and forth in the stock market recently, investors may want to consider watching cyclical stocks. For the most part, this group of stocks would fall on both sides of the ongoing growth vs value stocks debate. On one hand, you have consumer discretionary firms that mostly focus on growing their portfolios. Namely, this would be to meet the constantly shifting demands in consumer markets, hence the emphasis on growth. On the other hand, some would argue that there are also industrial stocks among other value stocks in the cyclical trade as well. This could be the case given the recent decline in reopening stocks due to Omicron-related pressures.
Overall, with the current weakness in markets, investors looking to grow their portfolios could be eyeing the top cyclical stocks. We could look at the likes of Nucor (NYSE: NUE) for instance. The steel production titan remains a viable play on the industrial stock front despite the recent headwinds. Like it or not, steel is a crucial component in the construction process and this could, arguably, provide NUE stock with more growth potential post-pandemic. In fact, the company’s shares are still holding on to gains of over 110% year-to-date.
At the same time, consumer discretionary names such as Victoria’s Secret (NYSE: VSCO) continue to impress as well. As of yesterday, the lingerie retailer is currently working with Goldman Sachs (NYSE: GS) to accelerate its share repurchase program by $250 million. This alongside improving holiday sales figures could put the company in focus among investors in the stock market today. With all that in mind, could one of these cyclical stocks be your next big investment?
Top Cyclical Stocks To Buy [Or Sell] This Week
- Akamai Technologies Inc. (NASDAQ: AKAM)
- JD.com Inc. (NASDAQ: JD)
- GlobalFoundries Inc. (NASDAQ: GFS)
- Caterpillar Inc. (NYSE: CAT)
Akamai Technologies Inc.
First up, we have Akamai Technologies, a cyclical company that provides content delivery network, cybersecurity, and cloud services. Impressively, the company provides its services to billions of people around the world. With the world’s largest and most trusted edge platform, the company keeps apps, code, and experiences close to its users and threats further away. It has over 1,400 networks across 135 countries. AKAM stock currently trades at $118.18 as of 12:54 p.m. ET.
On Tuesday, D.A. Davidson analyst Rudy Kessinger initiated coverage on the company with a buy rating, calling Akamai the best-kept secret in security. Kessinger also set a $143 price target on AKAM stock, saying that it continues to benefit from having one of the largest global networks and shares in the content distribution network (CDN) markets. He also notes that cybersecurity will become a dominant part of Akamai’s business in the near future. This is evident as Akamai has over 30% of its revenue coming from security products during the third quarter of this year. Given this piece of information, is AKAM stock a top cyclical stock to be on the lookout for right now?
JD.com is a leading Chinese e-commerce company. Its cutting-edge retail infrastructure seeks to enable consumers to buy whatever they want, whenever they want it. Moreover, JD’s e-commerce platform provides over 550 million active customers with direct access to an unrivaled range of authentic, high-quality products. Its cross-border platform also enables brands from around the world to sell directly to Chinese consumers, even for companies that do not have a physical presence in China. JD stock currently trades at $65.38 as of 12:54 p.m. ET.
Recently, the company announced that its Board of Directors has approved modifications to its existing share repurchase program adopted in March 2020. It has increased the repurchase authorization from $2 billion to $3 billion and has been extended until March 17, 2024. Last month, the company also announced its third-quarter financials. Diving in, net revenues for the quarter were $33.9 billion, a 25.5% increase from a year ago. Income from operations for the quarter was $400 million. It also increased its annual active customers’ accounts to 552.2 million during this quarter, up by 25% year-over-year. All things considered, is this the time to invest in JD stock?
GlobalFoundries is one of the world’s leading semiconductor manufacturers. It has redefined innovation and semiconductor manufacturing by developing feature-rich process technology solutions that provide leadership performance in pervasive high-growth markets. The company offers a unique mix of design, development, and fabrication services. GFS stock currently trades at $63.12 as of 12:55 p.m. ET and is up by over 40% in the past year alone. Last week, the company released an exciting piece of news.
In detail, GlobalFoundries announced that it has agreed to amend its Wafer Supply Agreement with AMD (NASDAQ: AMD) to increase the volume of chips that GlobalFoundries will supply. It will also extend the terms of the agreement to secure supply through 2025. Furthermore, the agreement will also expand on the breadth of the partnership, including supply assurance for AMD chips serving the data center, personal computing, embedded, and other growth markets. GlobalFoundries has been manufacturing chips for AMD for more than 12 years and this new agreement would continue to build on this long-standing partnership. With that being said, is GFS stock worth buying today?
Last but not least, we will be taking a look at Caterpillar. In short, it is the largest construction equipment manufacturer in the world today. As it stands, CAT stock currently trades at $207.56 as of 12:55 p.m. ET. Now, industrial stocks like CAT stock, among other infrastructure stocks, are in a unique position, to say the least. Sure, the recent blow to President Joe Biden’s Build Back Better bill alongside rising Covid fears continue to weigh in on CAT stock. Year-to-date, the company’s shares are up by over 13%, marking a decline of over 14% from its all-time high seen earlier this year.
However, some would argue that this presents a buying opportunity for investors looking to jump on any post-pandemic tailwinds for Caterpillar. Not to mention, the company seems to be kicking into high gear across the board. Firstly, it posted stellar figures in its latest quarterly earnings report. Notably, Caterpillar saw both its net income and earnings per share surge by over 113% year-over-year. Secondly, Caterpillar is also working to diversify its portfolio. This is evident from its ongoing partnership with Chevron (NYSE: CVX) with hydrogen fuel cell-powered locomotives. Having read all of this, would CAT stock be a top buy for you in the stock market now?
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