Are These Top Cyclical Stocks Worth Investing In Now?
Cyclical stocks were some of the most heavily shorted stocks of 2020. As investors were flocking towards semiconductor stocks and other tech names, they exited their cyclical holdings in droves. Given the rough economic conditions last year, I can understand why. After all, cyclicals often follow the state of the economy closely. Now, over a year later, investor sentiment has shifted towards the top cyclical stocks. No doubt, this is because of improving pandemic conditions stemming from ample stimulus aid and widespread vaccination efforts. Not to mention, industrial stocks which are also part of the cyclical industry are riding high on President Joe Biden’s recent $2 trillion infrastructure package. Taking all this into consideration, it would not surprise me if most investors are bullish on cyclical stocks right now.
Evidently, conventional tourism players such as Penn National Gaming (NASDAQ: PENN) are already in focus now. The company continues to adapt its business strategy, making the most of online gambling trends. At the same time, it would also stand to benefit from the economy reopening. Accordingly, PENN stock is looking at massive gains of over 600% in the past year. Elsewhere, conventional retail names such as Under Armour (NYSE: UAA) would also see increased foot traffic in a post-pandemic market. Given all of this, would you consider investing in one of these trending cyclical stocks now?
Cyclical Stocks To Buy [Or Sell] This Week
- Apple Inc. (NASDAQ: AAPL)
- Nike Inc. (NYSE: NKE)
- Carnival Corporation (NYSE: CCL)
- United Airlines Holdings Inc. (NYSE: UAL)
Apple Inc.
Apple is a multinational technology company that is headquartered in California. The cyclical company designs and manufactures mobile communication and media devices. It also sells a range of related software and services. and applications to a wide range of industries and consumers. Known for its range of premium products like the iPhone and Apple Watch, the company is one of the world’s largest technology companies by revenue. It is also one of the world’s most valuable companies. AAPL stock currently trades at $131.14 as of 11:16 a.m. ET and has been up by 8% since the start of the month. Recently, it was reported that Apple is working on a combined TV box and speaker to revive its smart home portfolio.
In detail, the company is working on a product that would combine an Apple TV set-top box with a HomePod speaker and include a camera for video conferencing. If launched, it would represent Apple’s most ambitious smart-home hardware offering to date. It is also mulling the launch of a high-end speaker with a touch screen to better compete with industry leaders like Google (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN).
In the company’s latest quarter results in January, it reported another record quarter. Firstly, Apple posted all-time record revenue of $111.4 billion, up by 21% year-over-year. Secondly, the company also posted earnings per share of $1.65, up by 35% compared to a year earlier. Given the impressive financials, will you consider buying AAPL stock ahead of its earnings release later this month?
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Nike Inc.
Nike is a cyclical company that focuses on the development and marketing of athletic apparel, footwear, and equipment. The company has an extensive portfolio of brands that include Hurley, Nike Brand, and Converse. Nike was one of the few cyclical stocks that have weathered through the pandemic given their strong e-commerce presence. NKE stock currently trades at $135.87 as of 11:17 a.m. ET. Its revenue declined by 4% in fiscal 2020 as it had to deal with store closures as the pandemic worsened last year. Nike’s digital sales surged during the quarter and this reflected the expansion of its consumer channels.
Impressively, it reported stellar financials last month in its third-quarter fiscal 2021. The company posted quarterly revenue of $10.4 billion up by 3% compared to a year ago. As mentioned, it continues to enjoy an increase in digital sales at 59% for the quarter. It seems that Nike’s strategy is working as it continues to accelerate innovation and create a premium marketplace. It also has a strong competitive advantage given the quality of its products that are currently in the market. All things considered, will you add NKE stock to your portfolio?
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Carnival Corporation
Carnival is a leisure travel company specifically in the cruise line business. It is a provider of cruise destinations throughout the world and is one of the largest leisure travel companies in the world. With its portfolio of global cruise line brands, it has a fleet of 87 ships visiting over 700 ports. Furthermore, it will add a total of 16 new ships to its brands through 2025. CCL stock is currently looking at gains of over 35% year-to-date.
Last week, it provided a business update for its first quarter of 2021. In it, Carnival notes that booking volumes are accelerating. So much in fact that during the first quarter of 2021, the company was receiving approximately 90% higher volumes compared to a quarter earlier.
Impressively, cumulative advanced bookings for the full year 2022 are ahead of a very strong 2019. This could be reflecting significant pent-up demand and also long-term potential for cruising as the industry was decimated last year. As the country could potentially reopen by this year, will you consider buying CCL stock?
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United Airlines Holdings Inc.
Another cyclical stock worth watching now would be United Airlines. Why? For starters, the company has a prominent role in the air travel industry. Notably, this would place United Airlines in a prime position to cater to swarms of tourists post-pandemic. This could be the case, seeing as the company boasts a massive aircraft fleet with operations spanning the globe.
Overall, I could see UAL stock become a go-to for investors looking to bet on the tourism industry now. In fact, the company’s shares have almost doubled in value over the past year. While it has yet to recover to pre-pandemic levels, could now be a good time to buy on the dip?
For one thing, United Airlines has been hard at work optimizing its current operations. Earlier today, the company revealed that it had achieved a positive average daily core cash flow in March. Moreover, United Airlines also expects this trend to continue this year, citing “forward acceleration in customer demand” for travel. As the company continues to show its resilience amidst these trying times, could UAL stock return to its former glory?
