Should Investors Be Watching These Top Cyclical Stocks In The Stock Market Now?
With the stock market stabilizing after an overall good week, cyclical stocks could be worth considering. After all, like it or not, companies in the cyclical industry provide notable offerings and services. On one hand, you have industrial firms providing the raw materials and equipment needed for infrastructure. On the other hand, consumer discretionary businesses continue to cater to consumers amidst the current pandemic. Across the board, as stocks are still trading lower on the year-to-date front, some investors could be seeing opportunities in the sector.
By and large, this seems to be the case even as the Federal Reserve announced its first pandemic-era interest rate hike last week. Some would argue that investors have and continue to take this raise in stride after months of anticipating aggressive countermeasures against surging inflation. Nevertheless, investors will likely remain as focused as ever on the top cyclical players. For instance, Nike (NYSE: NKE) is set to report its latest quarterly financials after today’s closing bell. With the company facing supply chain pressures in China while pulling out operations from Russia, investors could be watching closely.
At the same time, Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) does not seem to be slowing down anytime soon. As of earlier today, the conglomerate is planning to acquire Alleghany (NYSE: Y) for $11.6 billion. The acquisition of the insurance firm would mark Berkshire’s largest purchase since 2016. Safe to say, this would serve to significantly bolster its insurance division. With all this activity in the cyclical space now, I could understand if investors are eyeing the top cyclical stocks. Should you be one of them, here are three to note in the stock market today.
Cyclical Stocks To Watch Ahead Of April 2022
- BlackBerry Ltd. (NYSE: BB)
- Lam Research Corporation (NASDAQ: LRCX)
- General Motors Company (NYSE: GM)
BlackBerry Ltd.
Starting us off for the week, we have BlackBerry, a cyclical company that focuses on cybersecurity. In fact, the company provides intelligent security software and services to enterprises and governments around the world. The company also secures more than 500 million endpoints that include 195 million vehicles. Besides, it leverages AI and machine learning to deliver innovative solutions in the areas of cybersecurity, safety, and data privacy.
Today, RBC Capital Markets upgraded BlackBerry to a Sector Perform rating from Underperform. It says that the stock’s valuation has normalized and is now more aligned with BlackBerry’s fundamentals. Analyst Paul Treiber also maintained a price target of $7. He also describes how this current value reflects its opportunities and potential risks. On the bright side, Treiber notes that BlackBerry’s Internet of Things segment is likely to see continued growth due to the strength in the global auto market. BlackBerry is also seeing a boost in average selling price per vehicle due to rising software content in vehicles.
Last week, the company strengthened its software supply chain with corporate-wide OpenChain ISO/IEC 5230:2020 across its entire product portfolio. OpenChain is the International Standard for open-source license compliance and is designed to build trust in the supply chain. The company also saw the need to lead in this space to adopt a higher standard for its software supply chain. Given all of this, is BB stock worth adding to your portfolio today?
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Lam Research Corporation
Following that, we have Lam Research Corporation, a semiconductor company that supplies wafer fabrication and related services to semiconductor research. Its equipment and services allow customers to build better and smaller performing devices. In fact, almost every advanced chip is built with Lam technology.
Last month, the company announced a new suite of selective etch products that apply breakthrough wafer fabrication techniques and novel chemistries to support chipmakers in the development of gate-all-around transistor structures. Composed of three new products, Argos, Prevos, and Selis, its etch portfolio provides a powerful advantage in both the design and manufacturing of advanced logic and memory semiconductor solutions. For instance, Argos selectively modifies and decontaminates wafer surfaces. Its groundbreaking treatment and conditioning capabilities enable chipmakers to treat wafer surfaces precisely, optimizing them for peak performance.
Its products are already being used in the fabs of industry leaders like Samsung Electronics to support nearly a dozen critical steps in the advanced logic wafer development process. Recently, Morgan Stanley (NYSE: MS) says that Lam Research is a top semiconductor pick. A team of analysts, led by Joseph Moore, notes that Lam has sold off materially in recent weeks, but still benefits from localized spending due to geopolitical uncertainty. It also offers intermediate-term visibility. With that being said, is LRCX stock a buy?
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General Motors Company
Another name to consider among cyclicals this week would be General Motors or GM for short. In essence, GM is a massive name in the automotive industry today. This is apparent from its vast array of conventional vehicles to its cutting-edge work in automotive tech. Regarding the latter, the company has and continues to make progress across the board on its electric vehicle (EV) and autonomous vehicle (AV) ventures. Accordingly, this could be why investors are tuning in to GM stock this week.
For starters, the company appears to be doubling down on its AV investments. Namely, GM is putting an additional $3.45 billion towards Cruise, its AV tech development arm. Interestingly, the move comes as SoftBank’s Vision Fund is exiting its current position in Cruise. It is doing so by selling its stake to GM for $2.1 billion. At the same time, GM will be adding the remaining $1.35 billion in a separate investment. Because of all this, GM now boasts an 80% stake in Cruise.
GM is planning to start the production of the Cadillac Lyriq today. Worth mentioning, this would be the company’s first EV model going into production. To highlight, the Lyriq is currently selling at a starting price of $59,990. It also marks GM’s first step forward towards electrifying its entire portfolio by 2030. According to Rory Harvey, the vice president of GM’s Cadillac division, interest in the Lyriq is strong. Harvey notes that over 220,000 “hand-raisers,” are already enquiring about the vehicle. With all this in mind, will you be keeping an eye on GM stock moving forward?
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