5 Top Cyclical Stocks To Consider For Your May 2021 Watchlist
For most investors now, cyclical stocks are the name of the stock market game. Accordingly, this is because of how cyclicals often follow the cycles of the economy, hence the name. Thanks to widespread vaccination efforts and stimulus aid, pandemic-related economic strains would continue to lighten. In turn, since cyclical stocks benefit from consumer discretionary spending, it makes sense that they would flourish.
For example, companies in the leisure and travel industries would benefit from the economy reopening now. Airline stocks such as Alaska Air Group (NYSE: ALK) have already recovered to pre-pandemic levels and continue to soar. Elsewhere, companies in the restaurant business such as Domino’s Pizza (NYSE: DPZ) would also be in the same boat. According to billionaire investor Bill Ackman, Domino’s “pure franchising” strategy and current investments in delivery tech make it a viable play now. In line with that, Ackman recently announced that his hedge fund owns a 6% stake in the company.
These are but two instances of cyclical stocks being attractive investment play now. Other key areas involving cyclical would be the retail and automobile industries. Investors jumping on the cyclical train would be betting on all these industries that could make the most of pent-up consumer demands. Should you be looking to do the same, here are five of the hot cyclical stocks to watch in the stock market today.
Best Cyclical Stocks To Watch This Week
- Halliburton Company (NYSE: HAL)
- Eastman Kodak Company (NYSE: KODK)
- Uber Technologies Inc. (NYSE: UBER)
- Delta Air Lines Inc. (NYSE: DAL)
- Wells Fargo & Company (NYSE: WFC)
Halliburton is one of the world’s largest providers of products and services for the ever-evolving needs of the energy industry. It serves both national and independent oil and natural gas companies throughout the world. In essence, it offers a broad array of products and services to upstream oil and gas customers worldwide through 14 product service lines. HAL stock currently trades at $22.63 as of Wednesday’s closing bell and has more than doubled in the last year.
In April, the company announced its first-quarter financials for 2021. Firstly, Halliburton reported a net income of $170 million for the quarter or $0.19 per diluted share. Secondly, operating income for the quarter was $370 million. It also achieved a total company revenue of $3.5 billion for the quarter. Seeing how the company is gaining momentum, will you consider watching HAL stock?
Eastman Kodak Company
Kodak is a global technology company that is focused on print and advanced materials and chemicals. It provides industry-leading hardware, software, consumables, and services to a wide range of customers. KODK stock closed Wednesday’s session at $6.78 a share and is up by over 150% in the last year. The company will be announcing its first-quarter financials for 2021 today after the market closes.
Recently, the company announced that it had acquired the assets of ECRM Incorporated’s CTP device business. ECRM is a world-class manufacturing company and a global leader in imaging technologies for the graphic communications industry. The transaction includes equipment, contracts, inventory, and intellectual property of the acquired business. Ultimately, the acquisition would reflect Kodak’s commitment to the printing industry and its long-term growth. For these reasons, will you consider adding KODK stock to your watchlist?
Uber Technologies Inc.
Uber is a cyclical company whose services include ride-hailing, food delivery, package delivery, and freight transportation. The company is based in San Francisco and has operations in over 900 metropolitan areas worldwide. It is also one of the largest firms in the gig economy. Impressively, the company is also committed to becoming a fully electric, zero-emission platform by 2040, with 100% of rides taking place in zero-emission vehicles. UBER stock currently trades at $43.81 as of Wednesday’s closing bell.
Earlier this month, the company announced its first-quarter financials for 2021. In it, it reported that gross booking reached an all-time high of $19.5 billion, up by 24% year-over-year. Revenue for the quarter was $2.9 billion and mobility revenue was $853 million. Notably, its delivery revenue of $1.7 billion grew by 230% year-over-year. The company also ended the quarter with $5.7 billion in cash.
“Uber is starting to fire on all cylinders, as more consumers are riding with us again while continuing to use our expanding delivery offerings,” said Dara Khosrowshahi, CEO. “We will continue to innovate and find new ways to deepen engagement with our customers, as the only global platform that helps you go wherever you need and get whatever you want.” Given all of this, do you think UBER stock is a top cyclical stock to watch?
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Delta Air Lines Inc.
Delta is one of the major airlines of the U.S. and a legacy carrier. The airline, along with its subsidiaries and regional affiliates, including Delta Connection, operates over 5,400 flights daily and serves 325 destinations in 52 countries pre-pandemic. DAL stock currently trades at $43.03 as of 4:00 pm ET on Wednesday and has doubled in the last year.
Last month, the company announced its March quarter financials. Delta says that the company is accelerating into the recovery with its brand, stronger and more trusted than ever. It also says that recent demand trends are encouraging with rising confidence in air travel as vaccination rates improve and travel restrictions ease. Specifically, current domestic leisure bookings are 85% recovered to 2019 levels. With that in mind, will you watch DAL stock?
Wells Fargo & Company
Last but not least we will be looking at banking giant Wells Fargo. With operations throughout the U.S. and across the globe, it is no newcomer to the financial services scene. This coupled with an economy on the uptrend could benefit Wells Fargo and investors alike.
Overall, as payroll figures increase and pandemic conditions improve, consumers would be more likely to use their hard-earned cash. This would be where banks such as Wells Fargo come into play. In fact, WFC stock is already looking at significant gains of over 50% year-to-date. As the company’s shares continue to climb towards pre-pandemic levels, would investors be wise to jump on now?
Well, Deutsche Bank (NYSE: DB) appears to believe so. Late last month, DB lifted its price target for WFC stock, up from $45 to $48. DB analyst Matt O’Connor argues that WFC stock is a “must-own stock” based on its recent post-earnings surge. Meanwhile, CNBC’s Jim Cramer also likes the stock now, saying, “That’s the cheapest bank. It’s going to be the best bank.” Given WFC stock’s current trajectory, would you agree with the analysts on this one?