3 Cyclical Stocks For Your July 2022 Watchlist
Even as investors search for recession-proof stocks amidst the recent instability in the stock market, cyclical stocks could have some merit. Sure, most would argue that with a potential recession looming, cyclical stocks would not be in the best position now. However, such a broad-based macroeconomic headwind would, arguably, impact stocks across the board regardless. Pair this with the year-to-date losses of some of the biggest cyclical stocks around, and investors could see an opportunity in the sector.
Speaking of investors buying into the current dips, Warren Buffett appears to be doing so. Notably, Buffett’s Berkshire Hathaway (NYSE: BRK.A) recently increased its stake in Occidental Petroleum (NYSE: OXY). After purchasing 9.9 million shares for a price of $584 million, Berkshire now holds 163.4 million shares. This brings the Buffett-led firm’s total ownership stake to 17.4%. On the whole, this appears to be thanks to Occidental’s position in the oil and gas industry now, a cyclical industry to consider. As oil prices continue to gain worldwide, this would be the case.
At the same time, even companies in the entertainment space like Amazon (NASDAQ: AMZN) continue to refine their offerings. As of earlier today, the company is introducing further integrations for its Amazon Prime Video (APV) streaming platform. In essence, the Watch Party feature on APV is now available on Roku (NASDAQ: ROKU) streaming hardware alongside a wide array of smart TVs and even gaming consoles. Through this feature, up to 100 Amazon Prime subscribers can watch content together at a time. Aside from these two instances, cyclical firms continue to enhance their offerings despite the current economic conditions. As such, here are three more to look out for in the stock market today.
Cyclical Stocks To Buy [Or Sell] In July 2022
- Rubicon Technology Inc. (NASDAQ: RBCN)
- Shell PLC (NYSE: SHEL)
- Crocs Inc. (NASDAQ: CROX)
Rubicon Technology Inc.
Starting us off today, we have Rubicon Technology, a cyclical company that specializes in sapphire crystal growth technology. In fact, it has industry-leading capabilities in the growth, processing, and production of sapphire optical products. Its technologies and systems are customized for a wide selection of uses like core drilling, slicing, and polishing among others. Furthermore, its two proprietary crystal growth technology platforms produce excellent quality sapphire crystals.
RBCN stock is up by over 60% on today’s opening bell as investors respond positively to Janal Corporation (OTCMKTS: JANL) commencing a cash tender offer to purchase up to 45% of outstanding shares from Rubicon Technology at $20 per share. Upon completion of the tender offer, two of the company’s current directors will resign and Janel will have the right to select two individuals to fill the vacancies created by the resignation.
It is anticipated that the tender offer will commence within the next 10 business days, with the closing anticipated to be approximately 30 days thereafter. “After careful and thorough analysis, together with the advice of our advisors, the Board has endorsed this transaction as being in the best interest of Rubicon’s stockholders,” said Timothy E. Brog, the company’s Chief Executive Officer. “We are pleased that the combined tender offer and subsequent distribution of cash to our stockholders will provide stockholders a significant premium to the current market price, while also enabling investors to retain equity in the Company and participate in its future direction.” Given this piece of news, is RBCN stock worth investing in right now?
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Shell PLC
Moving on, we have Shell, a multinational oil and gas company that has over 80,000 employees in more than 70 countries. In detail, it is a global group of energy and petrochemical companies that strives to meet the energy needs of billions all over the world. It also innovates for cleaner energy solutions and also works toward building more economically and environmentally responsible solutions.
Today, news broke that the company will be investing in Qatar’s LNG expansion. The expansion will support the delivery of much-needed supplies of natural gas to markets around the world. The project will also integrate with carbon capture and sequestration to reduce emissions. Lowering carbon natural gas is a key pillar of the company’s Powering Progress strategy as it moves towards achieving its target of becoming a net-zero emissions business by 2050. Accordingly, this strategic partnership with QatarEnergy will also include multiple international partnerships like the world-class Pearl GTL asset.
Last month, Shell also announced that it has completed the acquisition of Landmark fuel and convenience network. The acquisition also includes supply agreements for the independently operated fuel and convenience sites. Through this acquisition, Shell is also advancing its Powering Progress strategy. Namely, this includes growing its retail footprint in a core market by providing opportunities to offer customers expanded clean fuelling options. With that in mind, is SHEL stock worth looking out for at the moment?
Crocs Inc.
Crocs is a world leader in innovative casual footwear for people of all ages. Its broad portfolio of all-season products remains true to its core molded footwear heritage and is worn by hundreds of millions of people all over the world. Impressively, it has sold over 720 million pairs of shoes since its inception in 2002. Today, the company’s stock is in focus after it received an upgrade from Loop Capital to a ‘Buy’ rating.
This comes as Loop advised its clients that the risk/reward dynamics for the stock are now more attractive following a recent selloff in the last few months. Additionally, the firm also reports encouraging checks that suggest investor sentiment is overly negative. Loop Capital also set a price target of $75 per share along with the new rating. Following last year’s HEYDUDE acquisition, analysts at Loop Capital said that it may accelerate the overall long-term growth rate given Crocs’ ability to sell the brand into its legacy distribution and it is already seeing some success in the family channel.
In May, the company reported its first-quarter financials. Diving in, revenue grew by 47% year-over-year to $660.1 million. HEYDUDE Brand revenues were $114.9 million for the period following the closing of the acquisition. Its direct-to-consumer revenues also grew this quarter, increasing by 34.6% year-over-year. Digital sales also grew by 23.5% year-over-year. All things considered, is CROX stock a top cyclical stock to add to your portfolio today?
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