Are These The Best Cyclical Stocks For Your May 2021 Watchlist?

It comes as no surprise to see that cyclical stocks are trending in today’s stock market. Indeed, they are among the most active stocks now thanks to investors betting on the economy reopening. As most seasoned investors would know, cyclical stocks often follow the economy closely. Without going into much detail, when the economy is doing well, cyclicals tend to follow suit. If you couple this with the broader economic recovery we are experiencing now, the hype around the sector is not unwarranted. In fact, just this morning, April’s private employment figures were reported. U.S. employers supposedly added 742,000 payrolls, the highest amount since September 2020. While investors continue to receive more positive news about economic recovery, I could see the current cyclical stock tailwinds persist.

Notably, a wide array of companies fall under the category of cyclical stocks. Two core sections now would be the industrials and tourism companies. On one hand, industrial stocks such as 3M (NYSE: MMM) would be on the uptrend as manufacturing operations ramp up. On the other hand, investors also appear bullish on top travel stocks like Carnival (NYSE: CCL) and America Airlines (NASDAQ: AAL). This would be the case as consumer travel demands continue to grow amidst the current pandemic. After considering all of this, I can understand why investors would be looking out for the best cyclical stocks now. Should you be in the same boat, here are four cyclical stocks worth knowing on the stock market now.

Best Cyclical Stocks To Watch Right Now

General Electric Company

General Electric is a Boston-based multinational conglomerate. The company operates through many cyclical segments like aviation, power, digital industry, and additive manufacturing among others. In 2020, General Electric was ranked among the Fortune 500 as the 33rd largest firm in the U.S. by gross revenue. GE stock currently trades at $13.23 as of 11:58 a.m. ET and has more than doubled in the last year. Late last month, the company reported its first-quarter financials for 2021.

cyclical stocks (GE stock)
Source: TD Ameritrade TOS

In it, the company seems well-positioned to deliver on its 2021 commitments and long-term profitable growth. Total orders for the quarter were $17.0 billion and total revenue was $17.1 billion. Notably, the company saw organic expansion year-over-year with three of its businesses improving.

CEO H. Lawrence Culp, Jr had this to say, “We are shifting more toward offense and capturing opportunities in the energy transition, precision health, and future of flight. I am confident we are well-positioned to drive profitable growth, achieving high single-digit free cash flow margins over time and creating long-term value for shareholders.” Given all of this, will you consider watching GE stock?

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Lyft Inc.

Lyft is an on-demand transportation-as-a-service (TaaS) provider. It provides peer-to-peer transportation and an on-demand ridesharing platform. Its transportation network brings together rideshare, scooters, bikes, car rentals, and transit all under one app. LYFT stock currently trades at $54.24 as of 11:58 a.m. ET and has been up by over 18% since February. Yesterday, the company reported its first-quarter financials for the year.

top cyclical stocks (LYFT stock)
Source: TD Ameritrade TOS

In detail, Lyft posted first-quarter revenue of $609 million, which grew by 7% quarter-over-quarter, The strong first-quarter results could reflect ongoing recovery and it also exceeded outlook. The company also ended the quarter with $2.2 billion in cash. It continues to build a company that can attack the trillion-dollar-plus market opportunity. Given how the economy is recovering and as more people start to move around again, could Lyft continue to enjoy this momentum in the months ahead? 

Last week, the company also announced that it has signed an agreement with Woven Planet Holdings, a subsidiary of Toyota Motor Corporation (NYSE: TM), to acquire Lyft’s self-driving vehicle division, Level 5. This would allow Lyft to focus on its core business while it continues to work with Woven to take a major step forward for autonomous vehicle technology. With that in mind, will you consider adding LYFT stock to your portfolio?

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AMC Entertainment Holdings Inc.

AMC is a movie theater chain company that is one of the largest movie theater chains in the world.  It owns the largest share of the U.S. theater market and boasts over 1,000 theaters. In essence, it conducts operations through two segments; U.S. markets and International markets. AMC stock currently trades at $9.26 as of 11:58 a.m. ET and has doubled in the last year. The company will announce its first-quarter financials tomorrow after the market closes.

best cyclical stocks to buy (AMC stock)
Source: TD Ameritrade TOS

How has the company been doing financially then? In its latest quarter financials that was posted in March, the company had resumed operations at approximately 78% of its domestic theatres. Given how the company has weathered through the brunt of the pandemic, could this latest quarter be a turning point for the company moving forward? Your guess is as good as mine. With blockbuster movie titles that are currently scheduled to be released in significant quantity in the coming months, the company could return to pre-pandemic levels of revenues by the end of the year. All things considered, will you watch AMC stock?

[Read More] Best Tech Stocks To Buy Right Now? 4 To Watch

Uber Technologies Inc.

Last but definitely not least, we have ride-hailing giant Uber Technologies Inc. Similar to our earlier entries, Uber was among, if not, one of the hardest pandemic-hit companies. When its flagship ride-sharing services were virtually halted, the company focused on other revenue streams. Primarily, Uber has and continues to make major improvements to its Uber Eats delivery services. With the company having weathered the worst of the pandemic, many investors would be eyeing UBER stock now. This would especially be the case seeing as Uber would make for a strong reopening play.

stocks to watch today (UBER stock)
Source: TD Ameritrade TOS

On the operational front, Uber continues to impress. Just yesterday, two key pieces of news around the company were announced. For starters, Uber is now working together with everyday essential item delivery company, GoPuff. Through this collaboration, Uber Eats now delivers a diverse selection of everyday essentials to customers in over 650 cities. Following that, U.K.-based electric vehicle (EV) manufacturer Arrival (NASDAQ: ARVL) revealed that it is working with Uber’s ride-hailing division as well. The duo is now looking to develop an affordable EV for Uber’s drivers with production to begin in late 2023. Accordingly, this would be in line with Uber’s plans to become a fully electric mobility platform. With the company firing on all cylinders now, will you be adding UBER stock to your May watchlist?

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