3 trending cyclical stocks to watch in the stock market right now
It goes without saying that cyclical stocks would be one of the most active stocks today in the scholarship. Understandably, this would be the case if the economy is to bounce back towards post-pandemic levels. In fact, investors got more good news about the job market earlier today. According to the Labor Department’s jobs report in May, the unemployment rate fell to 5.9%, a new low in the pandemic era. Countering this would be the fact that nonfarm payrolls came in at 559,000, against estimates of 650,000. While the economy may not recover at breakneck speed, it is growing gradually. As such, investors would now like to jump on the top cyclical stocks.
For the most part, I wouldn’t blame them. Take the hotel industry, for example. Indeed, it was one of the hardest hit sectors during the onslaught of the pandemic. Now players in the hotel industry such as Marriott International (NASDAQ: MAR) and Hilton hotels (NYSE: LDS) have more than doubled since the lows of their pandemic era. Shares of both companies have already impressively returned to pre-pandemic levels. It seems investors are now all too eager to bet on pent-up consumer demand for travel.
Industrial players such as Caterpillar (NYSE: CAT) and John Deere (NYSE: FROM) also continue to bloom. Since the duo’s core activities are closely linked to the construction and agriculture sectors respectively, I understand why. After all, both sectors benefit in times of economic growth. Now, both CAT and DE stocks have skyrocketed far above pre-pandemic levels to new heights. Across the board, cyclical stocks appear to be leading the broader market in gains this year. On that note, here are three top cyclical stocks worth mentioning in the fair today.
Best Cyclical Stocks to Watch This Month
General Electric Company
General Electric (GE) is a multinational conglomerate headquartered in Boston. GE has been the industry leader for more than 125 years and continues to help the world become more efficient and reliable. With its dedicated team and industry-leading technology, the company is the 33rd largest company in the US by gross revenue in the Fortune 500. GE shares are currently trading at $13.95 as of 11:23 am ET and are up more than 75% year-over-year. The company recently won one of the largest onshore wind contracts in Southeast Asia.
In detail, the company announced that it had signed a contract with BIM Wind JSC, a project joint venture between AC Energy of Ayala Corporation and BIM Energy Holding. BIM Group is one of the largest private conglomerates in Vietnam. Under the joint venture, GE will supply, install and commission GE Cypress onshore wind turbines for BIM Wind’s 88 MW wind farm in Ninh Thuan Province, South-Central Vietnam. The 88MW order is the company’s largest transaction with the company’s Cypress platforms in Southeast Asia, eclipsing three other Cypress orders in Vietnam in the past 12 months.
The company has aggressively promoted its renewable energy business. On Tuesday, it released an independent report from PwC Canada, commissioned by GE Hitachi Nuclear Energy. The report highlights the economic benefits of deploying the BWRX-300 small modular reactors in Canada and the potential export of this technology worldwide. First, the construction and operation of Ontario’s first BWRX-300 reactor is expected to generate approximately $2.3 billion in GDP, $1.9 billion in labor revenues and more than $750 million in federal, state and municipal tax revenues. . Given the prowess of the company’s energy segment, would you consider looking at GE stock?
Five Below Inc.
Five Below is a chain of specialty discount stores that sell products that cost up to $5. In essence, the company is a leading high-growth retailer for tweens, teens and beyond, offering high-quality products. The company has more than 1,000 stores in 39 states. FIVE shares are currently trading at $186.30 as of 11:40 a.m. ET. The company today reported strong first quarter financials, much to the delight of investors.
The company is diving in, reporting net sales of $598 million, up 64% year-over-year. Net income for the quarter was $49.6 million and earnings per share increased 91% to $0.88 year-over-year. Joel Anderson, President and CEO of Five Below had this to say: “We are excited to continue to grow and innovate in our key strategic initiatives in product, experience, and supply chain. We are on track to open 170 to 180 new stores this year and bring our unique Five Below experience to more new customers. With the inherent flexibility of our eight worlds, unique merchandising approach and focus on innovation, we believe we remain in a strong position to continue to grow Five Below and create sustainable, long-term value for all stakeholders.”
The company expects net sales in the second quarter of $640 million to $660 million based on the opening of approximately 30 new stores. Net income is expected to be between $56.9 million and $63.7 million. Want to add FIVE stocks to your watchlist for these reasons?
Another name to watch in the cyclical space is Zumiez Inc. Basically, the Washington-based company identifies as a multinational clothing specialty store. In addition to clothing, the company also sells shoes, accessories and hard goods. The company’s offer is mainly aimed at young men and women who are looking for the latest trends. This summer, the company’s target market would be the market for new outfits. If you couple this with rising vaccination rates, it could look like it now for Zumiez. As it stands, ZUMZ stock is looking at a 30% year-to-date gain and is currently trading at $46.52 per share as of 11:39 a.m. ET.
Just yesterday, the company reported a record first quarter from fiscal, baffling investors. For starters, Zumiez reported earnings per share of $1.03, which is ahead of Wall Street’s consensus estimates of $0.04 per share. In addition, the company also doubled its net profit compared to the same quarter last year. Despite keeping some of its brick and mortar stores close by, Zumiez continues to thrive.
Looking ahead, the company also appears optimistic. Zumiez quoted his “strong balance sheet and differentiated strategies” as the key factors that will help maintain positive momentum this year. In particular, the company believes it is well positioned to increase its global market share and increase long-term shareholder value. After reading all this, would you consider ZUMZ stock a top watch now?
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