4 Cyclical Stocks To Look Out For In 2021

May
11, 2021

6 min read


This story originally appeared on StockMarket

Top Cyclicals Stocks To Watch In The Stock Market Today

As we approach the tail-end of the pandemic, more investors appear to be turning towards the top cyclical stocks. After all, as the economy improves, cyclicals would tend to follow suit. In turn, this would make them attractive bets in the stock market today. While this premise is simple, most investors would know that many industries fall under this group of stocks.

To begin with, we could look at commodity-focused companies. Specifically, copper stocks and silver stocks appear to be in the spotlight now. According to CNBC’s Mad Money host Jim Cramer, the top performers in this sector offer products in strong demand with limited supplies. Seeing as silver and copper prices continue to climb, the likes of Coeur Mining (NYSE: CDE) and Rio Tinto (NYSE: RIO) could follow suit. At the same time, companies operating in the tourism industry would also stand to benefit from broader economic recovery. Whether it is airline stocks or conventional entertainment stocks, investors are spoilt for choices. Evidently, both American Airlines (NASDAQ: AAL) and MGM Resorts International (NYSE: MGM) have more than doubled their share prices over the past year.

Across the board, I could see cyclical stocks gain momentum as investors continue rotating out of tech stocks this week. In turn, I can understand if you are interested to add some to your portfolio as well. On that note, here are four top cyclical stocks on the stock market now.

Top Cyclical Stocks To Buy [Or Sell] Now

DraftKings Inc.

DraftKings is a digital sports entertainment and gaming company. In detail, the company allows users to enter daily and weekly fantasy sports-related contests. The company is the only U.S.-based vertically integrated sports betting operator. It is also a multi-channel provider of sports betting and gaming technologies. It is the official daily fantasy partner of the NFL, MLB, NASCAR, and UFC among others. DKNG stock currently trades at $43.92 as of 2:26 p.m. ET.

top cyclical stocks (DKNG stock)
Source: TD Ameritrade TOS

The company recently reported its first-quarter revenue, which showed that it is off to an outstanding start in 2021. The company reported a revenue of $312 million for the quarter. DraftKings also reported that its monthly unique payers (MUP) for its B2C segment increased by 114% year-over-year. The average revenue per MUP was $61 in the first quarter. This represents a 48% increase versus the same period in 2020. The company is also increasing its 2021 revenue guidance. It plans to raise its fiscal year 2021 revenue to a top line of $1.15 billion, which implies a 79% growth year-over-year. For these reasons, will you consider including DKNG stock on your watchlist?

[Read More] Best Stocks To Buy In May? 4 Advertising Stocks To Watch

JPMorgan Chase & Co.

JPMorgan is an investment bank and financial services holding company that is headquartered in New York City. It is one of the oldest financial institutions in the U.S. and has a history dating back over 200 years. JPM stock currently trades at $159.01 as of 2:26 p.m. ET and has been up by over 70% in the last year. Last month, it reported its first-quarter financials, much to investor delight.

best cyclical stocks (JPM stock)
Source: TD Ameritrade TOS

In it, the company posted a revenue of $33.1 billion, which was up by 14%, predominantly driven by net reserve releases of $5.2 billion. Net income for the quarter was a whopping $14.3 billion, a 399% increase year-over-year. Its diluted earnings per share for the quarter was $4.50. A chunk of this revenue came from its Consumer & Business Banking segments, with net revenues of $5.6 billion.

Jamie Dimon, Chairman, and CEO had this to say, “JPMorgan Chase earned $14.3 billion in net income reflecting strong underlying performance across our businesses, partially driven by a rapidly improving economy. These results include a benefit from credit reserve releases of $5.2 billion that we do not consider core or recurring profits. We believe our credit reserves of $26 billion are appropriate and prudent, all things considered.” With that in mind, will you consider buying JPM stock?

Read More

Altria Group Inc.

Altria is a cyclical corporation and one of the world’s largest producers and marketers of tobacco, cigarettes, and related products. It is the parent company of Philip Morris USA, John Middleton, and Smokeless Tobacco Company. The company also holds diversified positions across tobacco, alcohol, and cannabis. MO stock currently trades at $50.30 as of 2:27 p.m. ET. Late last month, the company reported its first-quarter results and reaffirmed its 2021 earnings guidance.

best cyclical stocks (MO stock)
Source: TD Ameritrade TOS

Firstly, the company posted a net revenue of $6.036 billion. It also paid $1.6 billion in dividends for the first quarter. Given these strong results, the company believes that its businesses are on track to deliver against its full-year plans. The company has also been investing heavily to make progress in its non-combustible portfolio. It also announced that it now has full global ownership of on! Oral nicotine pouches as it closed transactions to acquire the remaining 20% of the company. With such exciting news surrounding the company, would you agree that MO stock is a top cyclical stock to buy right now?

[Read More] Best Communication Stocks To Watch Right Now

Carnival Corporation

Topping off our list today would be the Carnival Corporation. In short, Carnival is a leading name in the cruise industry. In terms of scale, it boasts one of the world’s largest cruise fleets consisting of over 100 vessels across 10 cruise line brands. Indeed, investors would be bullish on CCL stock now seeing as leisure cruise voyages will resume later this summer. Not to mention, the company also found that its 2022 advanced bookings exceed 2019 levels. With the company attracting travelers and investors alike, could we see CCL stock return to its former glory?

top cyclical stocks to watch (CCL stock)
Source: TD Ameritrade TOS

If anything, Carnival continues to gear up for busy times ahead. Last week, the company’s Holland America cruise line provided a positive update on its newest ship. Namely, the “Rotterdam” safely completed two sets of sea trials in Italy.

Moreover, the company’s AIDA Cruises subsidiary also made headlines in Germany yesterday by inaugurating Europe’s largest shore power plant. Through an existing partnership with the local government, AIDA Cruises continues to push Carnival’s green cruising strategy in the region. Overall, Carnival appears to be firing on all cylinders. Could all this mean that CCL stock has more room to grow moving forward?

Leave a Reply

Your email address will not be published. Required fields are marked *