A double bonus today for your Christmas gift -- the best blue chips and the best cheapies. Hope everyone had a great holiday. I had to cancel my plans because of the roads and almost everyone I know canceled their plans due to either the roads or illness in the family. My friends and I are now planning a double celebration New Year's Eve. The big blessing is that at least we're not in Ukraine.
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TODAY'S FEATURED STOCK STORY Blue-chip stocks are those that have top-notch reputations. They are the companies known for being high-quality, faring well during recessions and having the brands, managerial excellence and resiliency to prosper regardless of what's going on elsewhere in the economy. While there is no one definitive list, people have generally looked to the Dow Jones Industrial Average as a good measure of blue-chip stocks. That index tends to prefer older, established companies compared to the S&P 500 and Nasdaq, which include smaller, newer and more growth-focused companies. While the Dow may have lost some of its luster, it regained its momentum in 2022. Through Dec. 20, the Dow is off 9.6% this year, whereas the S&P 500 and Nasdaq have seen much sharper losses of 19.8% and 32.6%, respectively. Here are 10 blue chips that should outperform in 2023:
Walmart Inc. (ticker: WMT). Walmart remains the country's dominant brick-and-mortar, mass-merchandise retailer. The company's e-commerce business is also a growing portion of its revenue. On top of that, Walmart has an extensive international arm, with operations in two dozen countries spread over more than 10,000 stores. For many years, investors felt that Amazon.com Inc. (AMZN) had left Walmart in the dust, but Amazon has stumbled in recent years, and its profitability metrics have sagged. Meanwhile, its Whole Foods grocery expansion failed to meaningfully dent Walmart's hold on that key category. If anything, omnichannel retail is becoming the new preferred method, and Walmart's large store footprint and massive logistics network give it a strong competitive position. Overall economic conditions are also a factor. The current inflationary wave and potential recession on the horizon should bode well; Walmart usually does well during periods of economic uncertainty, as consumers trade down to cheaper options.
Home Depot Inc. (HD). Home Depot is a dominant building supply store. It, along with Lowe's Cos. Inc. (LOW), have built an effective duopoly across much of North America, with both companies delivering tremendous returns to shareholders over the decades. Home Depot shares have sold off significantly over the past year around housing market jitters. It's certainly true that higher interest rates will cause a meaningful drag on new home construction. However, home repair and remodeling drives a great deal of business for building supply stores, and that segment should be less affected during a housing bust. It's also worth considering that Home Depot stock regained all its 2008 financial crisis-era losses by early 2012. Home Depot's recovery should be even quicker this time around. Throw in strong long-term demographics for the housing market, and this current entry point at less than 20 times forward earnings looks attractive.
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10 best blue-chip stocks to buy for 2023:- Walmart Inc. (WMT)
- Home Depot Inc. (HD)
- PepsiCo Inc. (PEP)
- Nike Inc. (NKE)
- Visa Inc. (V)
- Procter & Gamble Co. (PG)
- Johnson & Johnson (JNJ)
- 3M Co. (MMM)
- Texas Instruments Inc. (TXN)
- Chevron Corp. (CVX)
InvestedAdvice, rankings and stock market news for investors. |
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| TODAY'S FEATURED STOCK STORY The stock market has struggled in 2022, providing buying opportunities in high-quality stocks. Unfortunately, quality stocks trading for less than $10 per share are few and far between. A stock priced at this level could be a red flag that something is seriously wrong with a company. Many of these stocks have challenged underlying business models or difficult near-term outlooks.
That's not always the case, however, and CFRA Research has identified some cheap, high-quality stocks that could be excellent buys for frugal investors. Here are nine of the best stocks to buy for less than $10 per share, according to CFRA:
Arlo Technologies Inc. (ticker: ARLO). Arlo Technologies produces smart connected devices, including security cameras, baby monitors and outdoor lights. Analyst Keven Young says Arlo's shift to a more services-focused business has created value for investors. He says the transition has gone smoothly up to this point. In fact, Arlo reached $125 million in annual recurring revenue in the third quarter, up 56% from the third quarter of 2021. Perhaps even more impressive, Arlo reported 1.67 million paid accounts, up 91% year over year. The company's growth is particularly encouraging, given its current customer acquisition cost of $0. CFRA has a "buy" rating and $7 price target for ARLO stock, which closed at $3.15 on Dec. 19.
Crescent Point Energy Corp. (CPG). Crescent Point Energy is a Canadian oil and gas exploration and production company that has assets in Western Canada, Utah and North Dakota. This is the best-performing stock on this list in 2022, with a year-to-date gain of 22.7% through Dec. 19. Analyst Jonnathan Handshoe says Crescent Point is one of many energy companies taking advantage of sky-high oil and natural gas prices by reducing its debt and improving its balance sheet. CFRA has a "buy" rating and 13 Canadian dollar ($9.55) price target for CPG stock, which closed at $6.55 on Dec. 19.
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9 of the best cheap stocks to buy under $10:- Arlo Technologies Inc. (ARLO)
- Crescent Point Energy Corp. (CPG)
- Nokia Oyj (NOK)
- Orange SA (ORAN)
- Oatly Group AB (OTLY)
- Rocket Lab USA Inc. (RKLB)
- Telefonica SA (TEF)
- Telecom Italia SPA (TIIAY)
- Tencent Music Entertainment Group (TME)
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