December 9, 2022

Brad Marolf

Business & Finance Wonders

Stocks To Watch This Week? 4 Cyclical Stocks For Your List

Are These The Best Cyclical Stocks To Invest In This Week?

With the current mix of potential stock market headwinds on deck, could investing in cyclical stocks make sense now? Well, for one thing, this section of the stock market today is closely linked to the state of the economy. The likes of which continue to recover at a notable pace. Sure, there is the issue of inflation weighing in on consumer spending now. With the economy running hot, the Federal Reserve has finally approved the first interest rate hike in more than three years. Not to mention, the latest weekly jobless claims came in below expectations, a further testament to the strength of the economy.

As all of these factors come into play, some investors could be considering cyclical stocks. For one thing, companies in the cyclical space are not sitting idly by amidst all this. Take Occidental Petroleum (NYSE: OXY) for instance. As of last week, the energy firm is working with European jet-maker Airbus. Through the four-year deal, Occidental will be supplying Airbus with emissions-offsetting carbon credits. Furthermore, even consumer discretionary firms like Roblox (NYSE: RBLX) are expanding their offerings as well. The company is reportedly looking to hire a PlayStation software engineer which could help in expanding the reach of its platform. With all this in mind, here are four cyclical stocks making headlines in the stock market now.

Cyclical Stocks To Buy [Or Sell] In March 2022

GameStop Corporation

Starting us off today, we have GameStop, a cyclical company that focuses on its consumer electronics and gaming merchandise retail. In fact, the company is one of the largest video game retailers in the world. It has thousands of stores across the world under the GameStop, EB Games, and Zing Pop Culture brands. On Thursday, the company reported its fourth-quarter and full-year 2021 financials.

Diving in, it reported a net sales of $2.254 billion for the quarter. The company also established new and expanded brand relationships with PC gaming companies like Alienware, Corsair (NASDAQ: CRSR), and Lenovo (OTCMKTS: LNVGY). Furthermore, the company also entered into a partnership with Immutable X to support the development of GameStop’s NFT marketplace and provides the company with up to $150 million in IMX tokens upon achievement of certain milestones. Also, GameStop has launched a redesigned app, which includes an enhanced user interface, improved scalability for a larger product catalog, and more functionality to support exclusive offers and promotions. All things considered, is GME stock a top cyclical stock to invest in right now?

Source: TD Ameritrade TOS

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Roku Inc.

Following that, we have Roku, a cyclical company that has pioneered streaming to TV. It connects users to the streaming content they love. It also enables content publishers to build and monetize large audiences, and provide advertisers with unique capabilities to engage consumers. Roku streaming players and TV-related audio devices are available in the U.S. and select countries through direct retail sales and licensing arrangements with service operators.

Last month, the company also reported its fourth-quarter and fiscal year 2021 results. Firstly, the company reported a total net revenue growth of 55% year-over-year to $2.76 billion. Platform revenue itself grew by 80% year-over-year to $2.28 billion. Secondly, gross profit for the year was $1.41 billion, increasing by 74% year-over-year. These upbeat results were driven by an increase in both active accounts and streaming hours. Streaming hours, for instance, increased by 14.4 billion hours year-over-year to 73.2 billion. For these reasons, should you consider adding ROKU stock to your portfolio?

NASDAQ ROKU
Source: TD Ameritrade TOS

Alibaba Group Holdings Ltd.

Alibaba is a multinational tech company that specializes in e-commerce, retail, and technology. The company allows businesses to transform the way they market, sell, and operate by having the technology infrastructure and marketing reach to grow their businesses. It also has a cloud and local consumer services business. On February 24, 2022, the company reported its December quarter financials.

Revenue for the quarter was $38.1 billion, an increase of 10% year-over-year that was driven by revenue growth of its China commerce segment. Its cloud segment grew by 20% year-over-year at $3.1 billion. Alibaba also saw its annual active consumers of the Alibaba Ecosystem reach approximately 1.28 billion. This includes a net addition of 43 million. Income from operations was $1.11 billion for the quarter. “Alibaba delivered steady progress this quarter as we continued to execute our multi-engine growth strategy in a complex and volatile market environment. We achieved positive momentum in key strategic businesses through a disciplined focus on capacity building and value creation to fuel our future growth,” said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group. Given this piece of news, is BABA stock worth buying?

BABA stock
Source: TD Ameritrade TOS

[Read More] 4 Top Consumer Staples Stocks To Watch Right Now

FedEx Corporation

Another cyclical name worth noting in the stock market today would be the FedEx Corporation. Overall, FedEx is one of, if not the most prominent players in the logistics business now. Through its vast portfolio, the company primarily offers transportation, e-commerce, and business services. For a sense of scale, FedEx’s operations rake in revenue of roughly $90 billion per year. More importantly, FDX stock seems to be gaining attention following its latest quarterly earnings update.

In it, FedEx reported earnings of $4.59 per share alongside revenue of $23.6 billion. For comparison, consensus forecasts on Wall Street were expecting $4.64 and $23.4 billion respectively. For the most part, the focus of investors today seems to be FedEx’s earnings miss. Even so, the company continues to go from strength to strength on the operational front. Through solid performances from its team, FedEx is now looking at record December operating income figures. The company highlights higher revenue per shipment and a net fuel benefit throughout its transportation divisions as key contributors to this. As such, would you consider FDX stock worth investing in amidst the current dips?

FDX stock
Source: TD Ameritrade TOS

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.