Are These The Top Cyclical Stocks To Buy Right Now?

With July fast approaching this week, investors could be turning their attention towards cyclical stocks again. After all, this section of the stock market would be in focus as monthly economic growth figures come in. For starters, we will be getting an update from the Conference Board on the June consumer confidence index on Tuesday. As the name suggests, this index would be a measure of how optimistic consumers are regarding their respective financial situations. Following that, the U.S. Labor Department will also be releasing its June jobs report on Friday. According to consensus data from Bloomberg, nonfarm payrolls could potentially grow by 700,000. This would indicate an uptick from May’s 559,000. Should these two measures bring positive news, I could see investors flocking towards cyclicals.

Evidently, the consumer discretionary element of cyclical stocks would be a key growth driver for the sector now. For instance, as consumers seek to refresh their wardrobes for the summer, retail spending would be on the rise. The most recent example would be sports attire retailer, Nike (NYSE: NKE). The retail giant recently blazed past Wall Street’s expectations in its latest quarter fiscal. In it, the company reported year-over-year surges of 71% in net income and 69% in earnings per share. According to CEO John Donahoe, this would be thanks to Nike’s pivot towards the digital commerce space among other factors.

Meanwhile, even the automotive industry could be looking at more tailwinds ahead. In particular, the electric vehicle (EV) market received a major boost last week thanks to President Joe Biden’s $579 billion infrastructure bill. This would put companies such as ChargePoint (NYSE: CHPT) and Ford (NYSE: F) in the spotlight. With all that said, here are three top cyclical stocks to know in the stock market today.

Best Cyclical Stocks To Buy [Or Sell] Now

Fisker Inc.

Right off the bat, we have California-based automaker, Fisker Inc. For some context, the company primarily manufactures EVs. Specifically, Fisker is a company that focuses on developing the most environmentally sustainable vehicles. The company is currently working on the Fisker Ocean, an all-electric SUV made from recycled and vegan materials. Now, as an upcoming name in the U.S. EV market, Fisker would be on investors’ watchlists. With President Biden’s plan to invest billions towards EV infrastructure nationwide, we could see an increase in EV charging stations. As a result, this would further incentivize the general adoption of EVs in the U.S.

Even now, we can see that investors are keen on FSR stock. Namely, the company’s shares are currently looking at gains of over 40% in the past month. Notably, Fisker is set to join the Russell 3000 Index today, less than a year after going public last October. CEO Henrik Fisker highlighted this as another key milestone for the company. He also said, “Our plan is on track to launch at least four new vehicles into the market before 2025. I believe this strategy will make us the fastest growing pure EV maker over the next four years.

On the operational front, Fisker has not been sitting idly by as well. As of June 17, the company is currently working with Canadian automobile manufacturer, Magna International (NYSE: MGA). The duo is part of a binding manufacturing agreement where production of the Fisker Ocean SUV will take place at Magna’s carbon-neutral plant in Graz, Austria. According to Fisker, the production process of the Ocean SUV will likely begin on November 17, 2022. With all this exciting news around Fisker now, would you consider FSR stock a top cyclical stock to own now?

cyclical stocks (FSR stock)
Source: TD Ameritrade TOS

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Royal Caribbean Cruises Ltd.

Another top name in the cyclical space now would be the global cruise holding company Royal Caribbean Cruises (RCL). In brief, RCL is among the largest cruise line operators in the world. Through its portfolio, the company owns three global cruise vacation brands. They are its Royal Caribbean International, Celebrity Cruises, and Silversea divisions. For a sense of scale, RCL boasts a massive fleet of 59 vessels with 14 more in development. As a major player in the cruise line industry, investors would be turning to RCL stock on the reopening trade now. The company’s shares are already up by over 270% since its pandemic era low.

While this is great, RCL seems to be kicking into high gear as we see the return of cruises. Over the weekend, the company launched the first passenger cruise from the U.S. since the initial pandemic no-sail orders. That’s right after over a year RCL is the first through the gate amongst its cruise industry peers in the U.S. Now, the company’s Celebrity Edge ship is currently operating at 36% capacity, facilitating social distancing guidelines. According to CEO Richard Fain, all crew members are completely vaccinated, and the ship now holds a larger and more comprehensive medical unit. All this would serve to provide a safer environment for passengers in the long term as well.

Fain also notes that demand for cruise voyages remains high, as most would expect. In the case of RCL, he said that the company is “overwhelmed with people calling, clearly want to get back and go into normalcy”. Time will tell if things are smooth sailing for the cruise industry moving forward. Nevertheless, would you say that now is a good time to invest in RCL stock?

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

[Read More] What Are The Best Stocks To Invest In? 5 EV Stocks To Watch Now

Dillard’s Inc.

Next up, we will be taking a look at Arkansas-based apparel retailer, Dillard’s Inc. For the uninitiated, Dillard’s identifies as an upscale American department store chain operator. Today, the company is one of the largest fashion retailers in the U.S., operating 250 stores and 32 clearance centers spanning 29 states. In detail, Dillard’s offers consumers a wide array of products ranging from premium fashion apparel to beauty and home collections. The likes of which consist of both national and exclusive brand sources.

Now, with the recent uptick in consumer spending on clothing, DDS stock has been on a tear. Over the past year, the company’s shares are currently sitting on gains of over 600%. In fact, it hit a new all-time high during intraday trading on Friday last week. This could be thanks to a recent research report from Michelle Meyer, Bank of America’s (NYSE: BAC) head of U.S. economics. According to Meyer, the two-year sales growth rate at clothing stores continues to grow as “consumers are overhauling their wardrobes”. This would be the case when you consider that shoppers would be eyeing both leisurewear and back-to-work office wear as the economy reopens.

If anything, we can see that Dillard’s continues to benefit from these trends. In its recent quarter fiscal posted last month, the company saw green across the board. To begin with, Dillard’s reported a 65% year-over-year surge in total revenue, totaling $1.36 billion for the quarter. Furthermore, it also saw massive year-over-year surges of 197% in net income and 779% in cash on hand. Given all of this, will you be adding DDS stock to your portfolio this week?

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

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