3 Top Cyclical Stocks To Check Out Right Now
While investors aim to navigate the current bouts of volatility in the stock market, cyclical stocks could be worth noting. On the whole, it is important to note that this industry tends to follow economic cycles closely. However, even as inflation and other macroeconomic factors persist, there is no shortage of exciting developments coming from this space. As such, investors may not want to discount the top cyclical stocks in the stock market today just yet.
For instance, we could look at the likes of Roku (NASDAQ: ROKU). Sure, the content streaming firm’s shares are looking at sizable year-to-date losses. Even so, thanks to a new report from Business Insider posted yesterday, investors appear to be flocking to ROKU stock. Namely, sources in the report note that Netflix (NASDAQ: NFLX) could potentially be looking to acquire Roku. This follows mentions of the two streaming goliaths holding talks for a possible takeover in recent weeks. Not to mention, Roku also abruptly halted trading for its employees as well. With Netflix making a push toward content packages with advertisements, such a move could make sense.
Furthermore, consumer tech companies such as Apple (NASDAQ: AAPL) are not slowing down on the development side too. Just this week, the company has and continues to reveal new software and hardware updates to its portfolio. This would range from new iOS 16 features to MacBooks containing its latest M2 processor chips. Evidently, cyclical firms continue to innovate and bring more to the table even now. With all this in mind, could one of these cyclical stocks be your next big investment?
Cyclical Stocks To Buy [Or Sell] Today
- Thor Industries Inc. (NYSE: THO)
- Campbell Soup Company (NYSE: CPB)
- Western Digital Corporation (NASDAQ: WDC)
Thor Industries Inc.
To begin with, we will be taking a look at Thor Industries, or THO, for short. In brief, it is a manufacturer of recreational vehicles (RVs). The company’s offerings mainly consist of towable motorized RVs. Through a collection of brands such as Airstream, Heartland RV, and Livin Lite RV, THO markets its RVs to consumers. With the beginning of road travel season over the Memorial Day weekend, THO stock could be worth considering as Americans take to the roads.
Notably, this could be the case following the company’s latest earnings report from yesterday. According to the earnings report, THO’s earnings per share for the quarter is $6.32. Also, the company’s total revenue for the quarter is $4.66 billion. To put things into perspective, consensus figures on Wall Street are earnings of $4.74 per share on revenue of $4.18 billion.
Weighing in on the company’s overall quarterly performance is CEO Bob Martin. He highlights THO’s resilience, citing its record net sales and profitability for the quarter, despite facing an “uncertain business environment.” According to Martin, major production efforts from the THO team are among the key growth drivers for the quarter. After considering all this, would THO stock be a top buy for you?
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Campbell Soup Company
Following that, we have Campbell Soup, a company that has been around for generations. In fact, it has two distinct divisions, Meals & Beverages and Snacks, with 13 core categories. Its products like Campbell and Prego are used by millions of people all around the globe. Yesterday, the company reported its third-quarter financials for fiscal 2022.
Diving in, net sales for the quarter increased 7% year-over-year to $2.1 billion. This comes as demand for Campbell’s products remains strong, with consumption also increasing by 4% year-over-year. Secondly, it reported a net earnings per share of $0.62, increasing by 15% compared to a year earlier. Mark Clouse, Campbell’s President, and CEO had this to say, “As expected, we had a strong recovery across the business in the quarter with high-single-digit sales growth driven by sustained consumer demand for our brands and significantly improved supply. Our improved supply chain execution along with inflation-driven pricing began to mitigate the margin pressure we have experienced over the last 12 months. While the operating environment remains challenging and we continue to expect significant inflation, our team is executing well, and Campbell is on a much stronger foundation today.”
On top of that, the company is raising its full-year fiscal 2022 net sales outlook and reaffirming its prior adjusted EBIT and adjusted EPS guidance to reflect the ongoing inflation-driven margin pressure. All things considered, is CPB stock worth investing in right now?
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Western Digital Corporation
Lastly, we have Western Digital Corporation, a hard disk drive, and data storage company. With its Flash and HDD franchises, the company continues to create breakthrough innovations and powerful data storage solutions that enable advancements in-memory technologies. Impressively, its products are used in both the cloud and automotive industry as well.
The company recently announced that it is reviewing its potential strategic alternatives aimed at further optimizing long-term value for its shareholders. This would include a possible split of its flash memory and disk drive businesses. This also comes as one of its largest investors, Elliot Investment Management, has been pushing for these changes. Elliot Investment also says that it is willing to provide strategic resources and additional capital to help the company realize the full value of both of its businesses.
In a recent Investor Day presentation, Western Digital says that it is well-positioned to benefit from an architectural data growth opportunity. Moreover, the company anticipates that its Cloud segment revenue will grow up to about 50% of its total revenue. With sectors like AI and augmented reality growing, it expects NAND demand in the cloud segment to have a 37% year-over-year data growth from 2022 to 2027. Among the company’s technology development strategy, it continues to reimagine every subsystem for its HDD segment. It will also utilize its in-depth know-how in magnetics and solid-state memories to further improve its products. The company also currently has approximately 14,000 active patents. Given all of this, should you consider adding WDC stock to your portfolio?
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