Could These Be The Top Cyclical Stocks In The Stock Market Today?

Cyclical stocks are likely among the most trending stocks in the stock market today. Why? Well, for starters, cyclical stocks tend to follow the flow of the economy. Accordingly, there has been a slew of positive figures pointing towards broader economic recovery lately. Just this morning, the U.S. Labor Department revealed that there were 547,000 first-time unemployment insurance claims last week. Notably, this marks another pandemic-era low following last week’s 576,000 claims, below the Dow Jones estimate of 603,000. On this news, it would not surprise me to see investors looking out for the top cyclical stocks now.

After all, seasoned investors such as National Securities’ chief market strategist, Art Hogan, appear bullish on cyclical stocks now. Hogan said in a recent CNBC interview that it is important to have “a balance” of growth stocks and cyclical stocks now. In turn, he also argues that rebalancing between the two every couple of months puts investors “in a position to beat the S&P handily”. Evidently, both Southwest Airlines (NYSE: LUV) and Carnival Corporation (NYSE: CCL) continue to outpace the S&P 500 threefold year-to-date. As pandemic conditions continue to improve, I could see this trend continue. Having read till this point, you might be interested to invest in some of the top cyclical stocks on the stock market now. Should that be the case, here are four in focus now.

Cyclical Stocks To Buy [Or Sell] Right Now

American Airlines Group Inc.

American Airlines (AAL) is one of the largest airlines in the world. Pre-pandemic, it offered nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries. The company also has a cargo division that provides a range of freight and mail services with facilities and interline connections available across the globe. AAL stock currently trades at $20.45 as of 1:59 p.m. ET and is up by over 35% year-to-date. Today, the company reported its first-quarter financial results and continues to see a recovery in demand for air travel.

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

In detail, revenue for the quarter was $4 billion. Despite the airline industry being badly hit last year, the company could be on the verge of a comeback. It has managed to raise $10 billion through debt offering and this could help the company weather through what hopefully could be the last leg of the pandemic. AAL also ended the quarter with approximately $17.3 billion in total available liquidity.

AAL’s Chairman and CEO Doug Parker had this to say, “Looking forward, with the momentum underway from the first quarter, we see signs of continued recovery in demand. We remain confident the network enhancements, customer-focused improvements, and efficiency measures we’ve put into place will ensure American is well-positioned for the recovery.” Given all of this, should you consider buying AAL stock ahead of the economy fully reopening?

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AT&T Inc.

AT&T is a multinational conglomerate holding company with headquarters in Texas. It is a provider of telecommunications, media, and technology services globally. Through the company’s communications segment, it provides wireless and wireline telecom to consumers. AT&T’s WarnerMedia segment develops, produces, and distributes feature films, television, and gaming among others. T stock currently trades at $31.21 per share as of 2:00 p.m. ET. The company today reported its first-quarter results.

cyclical stocks (T stock)
Source: TD Ameritrade TOS

In it, the company reported consolidated revenues of $43.9 billion. AT&T also posted a diluted earnings per share of $1.04, up by 65% compared to a year ago. Its cash from operations increased by 12% to $9.9 billion. Also, the company ended the quarter with $5.9 billion in cash. It continues to excel in growing customer relationships in its market focus areas of mobility, fiber, and HBO Max.

For instance, HBO Max subscribers increased to nearly 64 million globally during the quarter. AT&T also continues to increase penetration in markets involving fiber broadband. With impressive financials, will you consider adding T stock to your portfolio?

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Pool Corporation

Pool is the world’s largest wholesale distributor of swimming pools and related outdoor living products. It operates over 395 sales centers across North America, Europe, and Australia. Impressively, it has distributed more than 200,000 national brand and private label products to roughly 120,000 wholesale customers. POOL stock currently trades at $412.15 as of 2:01 p.m. ET and has been up by over 25% since March. Today, the company reported record financials for its first quarter of 2021. Pool also increased its 2021 earnings guidance in light of this.

best cyclical stocks (POOL stock)
Source: TD Ameritrade TOS

Diving into its financials, the company reported record net sales of over $1 billion for the quarter, a 56% increase year-over-year. Its diluted earnings per share increased by 223% to a record $2.42. This record quarter seems to come from elevated demand for residential pool products, driven by home-centric trends that were influenced by the pandemic.

Looking ahead, the company expects to achieve strong growth tempered by tougher comps in the back half of the year. It is also well-positioned to accomplish its strategic initiatives given the circumstances. All things considered, will you buy POOL stock?

[Read More] 4 Hot Retail Stocks To Watch In April

Norwegian Cruise Line Holdings

Last but not least, we have Norwegian Cruise Line Holdings (NCLH). In short, the company is among the largest cruise line operators globally, in terms of passengers. By NCLH’s estimates, the company boasts a combined fleet of 28 ships, offering voyages to over 490 destinations worldwide.

top cyclical stocks to invest in (NCLH stock)
Source: TD Ameritrade TOS

If that wasn’t enough, NCLH is also among the key cruise line players in active discussions with the CDC to restart cruise operations. With the company’s portfolio and influence in the industry, investors may be watching NCLH stock closely now. Likewise, the company’s shares are currently looking at gains of over 170% in the past year. Could it be worth investing in right now?

Well, Goldman Sachs (NYSE: GS) analyst Stephen Grambling appears to believe so. Earlier this week, Grambling hit NCLH stock with a buy rating, raising his price target from $27 to $37 a share. Specifically, he argues that NCLH has “industry-leading capacity growth”. Bear in mind, this is after considering its larger peers such as Carnival and Royal Caribbean Cruises (NYSE: RCL). The likes of which Goldman Sachs rates at a Neutral as of now. Time will tell if this holds to be true. In the meantime, would you consider NCLH stock a buy right now?

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