Are These Top Cyclical Stocks In Your Portfolio Today?
While the broader stock market continues to experience growing pressures, cyclical stocks could be worth noting. For the most part, volatility and uncertainty continue to plague the stock market today. Accordingly, this week’s set of disappointing earnings figures from the retail industry would further dampen investor outlook on the U.S. economy. With inflation on everyone’s minds, the current broad-based sell-off in markets is arguably, not too surprising. However, amidst the current lows, some value-hunting investors may see an opportunity among the top cyclical stocks now.
Sure, retail giants like Target (NYSE: TGT) and Walmart (NYSE: WMT) are facing macroeconomic headwinds now. Even so, investors may not want to discount other players in the industry just yet. Take BJ’s Wholesale (NYSE: BJ) and Lowe’s (NYSE: LOWE) for example. Both firms posted overall positive results in their recent earnings calls this week. On one hand, BJ’s earnings report indicates that its comparable-store sales surged by 14% year-over-year. On the other hand, Lowe’s CEO Marvin Ellison notes that demand for the company’s home improvement offerings is persisting. Across the board, there seems to be no shortage of exciting developments from the cyclical space. As such, could one of these firms be worth looking at today?
Cyclical Stocks To Buy [Or Sell] Ahead Of June 2022
- Synopsys Inc. (NASDAQ: SNPS)
- Nike Inc. (NYSE: NKE)
- Palantir Inc. (NYSE: PLTR)
- Kohl’s Corporation (NYSE: KSS)
We begin today’s list with Synopsys, an electronic design automation company. It is a Silicon to Software partner for companies developing their electronic products and software applications that millions of users rely on. The company is also an S&P 500 company and a global leader in electronic design automation and semiconductor intellectual property. Besides, it offers one of the broadest portfolios of application security testing tools and services in the industry. SNPS stock is up by over 4% on today’s opening bell after reporting its second-quarter financials.
Diving in, the company reported a revenue of $1.27 billion, an increase of 24.9% year-over-year. Also, it posted a GAAP net income of $267.1 million or GAAP earnings per diluted share of $1.89. “Synopsys delivered an outstanding fiscal second quarter, exceeding our guidance targets with strength across all product groups and geographies. Based on strong first-half execution and confidence in our business, we are raising our full-year targets substantially,” said Aart de Geus, chairman, and CEO of Synopsys. “For fiscal 2022, we expect to grow annual revenue approximately 20% and pass the $5 billion milestone, drive further operating margin expansion, grow earnings per share by more than 25%, and generate approximately $1.6 billion in operating cash flow.” With that in mind, is SNPS stock a buy right now?
Following that, we have Nike, a cyclical company that is known for its athletic apparel, equipment, and accessories. In fact, it is also one of the largest suppliers of athletic shoes and apparel in the world. The company is also known for its Converse brand which designs and distributes lifestyle footwear and clothing. Earlier in the month, the company declared a quarterly cash dividend of $0.305 per share that will be payable on July 1, 2022, to shareholders of record at the close of business on June 6, 2022.
In late March, the company reported its third-quarter 2022. Firstly it posted a revenue of $10.9 billion, an increase of 5% year-over-year. A chunk of this revenue came from its Nike Direct sales at $4.6 billion, an increase of 15% year-over-year. Its digital sales were also up by 19% year-over-year. Nike also reported a diluted earnings per share of $0.87 for the quarter. The company says that this quarter showed that its Consumer Direct Acceleration strategy is working and it will continue to invest in its growth opportunities. All things considered, is NKE stock worth investing in?
Palantir Technologies Inc.
Palantir Technologies is a company that specializes in big data analytics and cybersecurity. The company has three core platforms that serve numerous companies and governments all around the world. Namely, they are Palantir Gotham, Palantir Apollo, and Palantir Foundry. For instance, its Palantir Gotham is used in counter-terrorism efforts by the U.S. On May 9, 2022, the company reported its first-quarter financials for 2022.
In it, Palantir posted a total revenue of $446 million, growing by 31% year-over-year. Commercial revenue and U.S. Commercial revenue grew by 54% and 136% year-over-year. It also reported that the customer count grew by 86% year-over-year. It also recently announced that it has been selected by the Department of Health and Human Services for its 5-year “Solutioning with Holistic Analytics Restructured for the Enterprise (SHARE)” Blanket Purchase Agreement (BPA). The $90 million BPA will allow officials across the department’s many agencies and missions to select Palantir’s platform to support their work. For these reasons, is PLTR stock a buy?
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Last but not least, we have the Kohl’s Corporation. In brief, the company, similar to Nike, primarily operates in the retail space. Through its chain of retail stores, Kohl’s has operations spanning the U.S. consisting of over 1,160 locations. Through its omnichannel retail services, Kohl’s offers consumers a variety of wares. This includes apparel, footwear, furniture, appliances, electronics, and housewares among other things. Thanks to the company’s latest operational updates, KSS stock is now in the spotlight.
Getting straight into it, Kohl’s will be receiving complete takeover offers in the coming weeks. This information comes directly from CEO Michelle Gass. According to Gass, Kohl’s is “pleased with the number of parties who recognize the value of our business and plan.” Even now, as the company, like some of its retail peers, feels the pressure from rising costs, it seems to have buyers lining up. As with most instances of potential acquisitions, this would draw investor attention towards KSS stock. Arguably, these offers could be coming at a strategic time for Kohl’s as well. As a result of all this, would KSS stock be a top cyclical stock to look out for in your book?