The market giveth and the market taketh away. After surging to a record high at the end of last week, the S&P 500 index has had a rough week but is making a game attempt to reclaim its high water mark. A popular sentiment this week is that “the easy gains are gone.” That doesn’t mean the market won’t continue to go up, it just means that maybe, just maybe, fundamentals are coming back into fashion. Investors are going to have to dig a little harder to find the value in some of their favorite stocks.
Fortunately, that’s what we’re here for. The MarketBeat team of writers is routinely looking to find the stocks and the stories that are moving the market, and turning that into insight that you can use to power your portfolio higher. Here’s a look at some of the stocks they analyzed this week.
Articles by Sean Sechler
Sean Sechler cited that the lithium-ion battery market value is forecast to reach approximately $46 billion by 2026. Lithium-ion batteries are going to play a major role in the expected growth of the electric vehicle industry. And that’s not the only use for lithium, which is why Sechler recommends you look at these three lithium stocks for your portfolio. Sechler was also leaning into the volatility in today’s market and gave investors three mega-cap stocks that offer stable earnings and less volatility. Another good hedge against volatility is to look for defensive stocks. As the pandemic begins to wind down, Sechler reminds investors about three pharmaceutical stocks that have products on the market that consumers will pay for regardless of economic conditions.
Articles by Jea Yu
A sound investing strategy is to find companies that manufacture the materials needed for the products we desire. In the face of a global chip shortage, Jea Yu advises investors to look for an opportune price to buy Applied Materials (NASDAQ:AMAT). The company holds a dominant position in supplying technology, equipment and software needed to manufacture semiconductors. Yu was also looking at Fiserv (NYSE:FISV), a company that provides the digital backbone for traditional banks. Because of the continued demand for digital and mobile banking, the company will be an essential part of those institutions plans for the foreseeable future. And as a pandemic recovery play, Yu suggests investors look at Medical Properties Trust (NYSE:MPW) the global hospital property REIT that is still trading below its pandemic highs, but is set for a nice recovery as outpatient services and inpatient procedures increase.
Articles by Thomas Hughes
Most investors know that dividend stocks aren’t just for income investors. And some of the best dividend stocks are growing companies that are increasing their payout. Thomas Hughes gave readers three dividend stocks that meet these criteria and should be on your radar. On the other end of the spectrum are penny stocks. These are high-risk investment, but they can deliver an exceptional reward if you pick right. Hughes offers three hyper-growth stocks that you can buy for under $5. Hughes was also looking at ManpowerGroup (NYSE:MAN) which he forecasts will make a major move higher with a rapidly improving labor market.
Articles by Nick Vasco
Along with semiconductors, another industry experiencing a Covid-19 related supply chain issue is the lumber industry. That’s one reason Nick Vasco was putting Weyerhauser (NYSE:WY) on investors’ radars. The company’s stock was sawed nearly in half at the start of the pandemic and continues to lag even with demand remaining high. Vasco was also looking at two restaurant chains that have been thriving in the pandemic due to their digital infrastructure. The first was Chipotle (NYSE:CMG) that saw digital sales rise 174% to $2.8 billion which was 46% of total sales. Another pick was Wingstop (NASDAQ:WING) which saw digital sales rise 63.6% year-over-year in the first quarter and now comprise 60% of total sales.
Articles by Sam Quirke
By now we all know that Netflix (NASDAQ:NFLX) had an underwhelming earnings report. Sam Quirke was writing about the streaming giant prior to earnings and lays out the bull and bear case and gives you a trading strategy for NFLX stock. Quirke was also looking at IBM (NYSE:IBM) and advised investors that after a strong earnings report and bullish comments by analysts, IBM stock may be ready to solidly break out of its sideways range. Speaking of breaking out, Ford (NYSE:F) stock has been on a tear recently. The stock has charged ahead 180% since the onset of the pandemic. And Quirke gave investors three reasons why Ford shares should continue to go higher.
Articles by Chris Markoch
Chris Markoch had infrastructure on his mind. That led him to analyze Nucor (NYSE:NUE) prior to the company delivering earnings. Even as steel prices are set to level off as supply begins to match demand, Markoch believes there’s a solid level of support upon which Nucor can climb higher. Markoch was also looking at Tractor Supply Company (NASDAQ:TSCO). This retailer was a pandemic winner. And while investors shouldn’t expect the same level of growth as in 2020, the company is still set up for slow, steady growth in 2020. And when it comes to slow and steady, investors could do worse than to buy Kimberly-Clark (NYSE:KMB). Markoch gave investors three reasons why they should own the stock no matter what happens during earnings.
Articles by Kate Stalter
Many traders look for stocks that are at beginning of a run-up. As Kate Stalter pointed out, even the best stocks often have pullbacks usually due to institutional investors taking profits. But those periods of price consolidation can form the base for a strong rally and Stalter had her eye on three stocks that appear to be setting up for a move higher. Stalter was also educating investors about the difference between stocks that are performing well in the S&P 500 index and stocks that carry the largest weight. In this case, Stalter was pointing out three stocks that are the S&P’s top performers but carry little weight with the index. And Stalter also wrote about Nvidia (NASDAQ:NVDA) which saw its stock climb 11% after the release of its Grace chip that is specifically designed for AI data centers.
This article presents seven large-cap stocks that are regarded as cheap based on their price-to-earnings ratio. The price-to-earnings ratio tells an investor how much they are paying per share for every dollar of a company's profit.
You can find a stock's P/E ratio by dividing its stock price by its earnings per share. That looks like this:
P/E Ratio = Stock Price/Earnings per share (EPS)
For example, if a company is reporting earnings of $3 per share and their stock is selling for $30 per share, the P/E ratio is 10 ($30 per share/$3 per share). Many investors will look at a benchmark index like the S&P 500 as their guide for defining if a company's P/E ratio makes a stock cheap or expensive. At the time of this writing, the average P/E ratio for stocks in the S&P 500 was 14x to 17x. That is the range we're using for determining if a stock is cheap.
Of course, what is considered a “good" P/E ratio may depend on the market sector. For example, technology stocks tend to have a higher P/E ratio than the S&P average because they are projected to have stronger earnings and stock price growth than the broader market.
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