It may have been the hottest investing trend of 2021. But as the new year beckons, it’s tough to be bullish on meme stocks. With numerous uncertainties clouding the market, the top names in this category, AMC Entertainment (NYSE:AMC) and GameStop (NYSE:GME), have been trending lower in recent weeks.
The same thing has happened for key secondary plays once popular with retail traders active on platforms like Reddit’s r/WallStreetBets subreddit, such as short-squeeze targets like Clover Health (NASDAQ:CLOV) and ContextLogic (NASDAQ:WISH). Penny stocks caught up in the meme stocks trend, like Sundial Growers (NASDAQ:SNDL), have given back their respective meme-related gains.
That said, don’t take this to mean all meme plays are “avoid-at-all-cost” situations. Among the scores of stocks once boosted by the trend, there are plenty that could buck the latest trend, and move higher. However, not due to another wave of meme mania. Instead, due to their own respective catalysts.
Although the meme stocks phenomenon is sagging in popularity, these seven current and/or former Reddit favorites could make another “to the moon” move or two in 2022:
- Bakkt Holdings (NYSE:BKKT)
- Cleveland-Cliffs (NYSE:CLF)
- Nokia (NYSE:NOK)
- PubMatic (NASDAQ:PUBM)
- Cassava Sciences (NASDAQ:SAVA)
- Virgin Galactic (NYSE:SPCE)
- Tilray (NASDAQ:TLRY)
Meme Stocks: Bakkt Holdings (BKKT)
Source: Mehaniq / Shutterstock.com
A financial services firm with a crypto focus, Bakkt Holdings went public in October, via a special purpose acquisition company (SPAC) merger. But it was two key developments not too long after that that sent its shares rocketing from just under its SPAC offering price ($10 per share), to as much as $50.80 per share.
First, a partnership deal with Mastercard (NYSE:MA), gives it access to the payment giant’s global network. Second is another partnership deal, this one with Fiserv (NASDAQ:FISV). Both relationships could help expand the number of individuals, merchants, and financial institutions that use Bakkt’s platform.
However, since this surge in price, BKKT stock below where it started. Chalk it up to the volatility seen lately in the markets. Adding to it, anticipated high insider selling. Even so, while it’s gone from $10 to $50, and back to $10 and below, now may be a great time to initiate a position.
In the months ahead, subsequent developments could help it to bounce back, including updates on its user base expansion efforts. New partnerships, such as the one announced recently with Manasquan Bank, could also enable Bakkt Holdings to move in the right direction once again. If you’re bullish crypto will make a comeback next year, consider this stock another way to play it.
Source: Pavel Kapysh / Shutterstock.com
During 2021, CLF stock rose around 39%. Primarily due to the pandemic recovery, but the meme stocks trend did play a minor role in its strong performance. Yet while it’s delivered an outsized return this year, “old school” iron ore and steel player Cleveland-Cliffs continues to trade as if its earnings are about to fall off a cliff (pun intended).
Admittedly, Cleveland-Cliffs is expected to see its earnings dip in 2022. Analyst consensus calls for earnings per share (EPS) of $5.82, versus an estimated EPS of $6.04 for 2021. However, trading for around 3.5x full-year 2022 earnings estimates, does a low single-digit dip in earnings justify giving the company a low single-digit earnings multiple?
Not so fast. As I discussed back in October, prospects look bright in terms of steel demand in 2022. Namely, assuming that the global chip shortage gets resolved, and auto production gets back to normal, boosted demand for steel stemming from the bi-partisan infrastructure bill could also enable it to deliver solid results over the next few quarters.
Given its cyclical nature, chances are CLF stock will continue to sport a single-digit price-to-earnings (P/E) ratio. Even so, as a move from a 3.5x to 7x would still result in a 100% gain for shares, the risk/reward proposition with this situation looks tilted in your favor.
Meme Stocks: Nokia (NOK)
Source: rafapress / Shutterstock.com
In early 2021, Nokia became one of the secondary meme stocks. This may have been due to its low stock price, or perhaps due to familiarity with its brand. Yet its gradual move to over $6 per share, after crashing following the first round of meme mania? That wasn’t due to speculative frenzy. Instead, the telecom equipment maker’s bounce back toward near its 52-week highs was due to improving fundamentals.
Before 2021, it was a bit of an “also ran” when it came to locking down 5G deals with telecom companies. But throughout the year, it’s had more success tapping into this demand. This, coupled with success with its turnaround efforts, points to a promising future for the company.
As a result, NOK stock is up more than 58% year-to-date. However, I wouldn’t see this as a warning that after a strong year stock performance-wise, more muted gains lie ahead. Continued 5G success, plus a possible end to the chip shortage, are just two factors that could help propel the stock, reasonably priced at 15.1x earnings, to much higher levels in the coming year.
While no longer much of a meme favorite, it doesn’t need association with this fading trend anymore. As it keeps on proving its skeptics wrong, expect things to continue to look up for Nokia and Nokia stock.
Source: Tada Images / Shutterstock.com
Back in the summer, PUBM stock looked like a possible short-squeeze play. With short interest at the time above 30% of float, it wasn’t out of the question that a stampede of Reddit buyers could have sent PubMatic stock “to the moon,” as what happened with Clover Health at the time.
Of course, shares in the digital advertising company failed to have such an epic squeeze. Instead, PubMatic shares have traded sideways. The shorts have covered their positions, and the meme crowd has left the scene as well. So, if it’s no longer a meme play/short-squeeze play, what’s the appeal?
Namely, valuation. As a Seeking Alpha contributor recently put it, PUBM is one of the few reasonably priced Software-as-a-Service (SaaS) stocks. This comes despite its success overcoming high competition from larger rivals like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) The Trade Desk (NASDAQ:TTD). Along with that, consider its strong chance of experiencing continued high revenue growth (30-40%) over the next few years.
I will admit there may be a caveat to buying PubMatic. Too much of the bull case hinges on its relatively lower valuation. If SaaS stock multiples keep compressing, its seemingly cheap valuation may not seem so cheap down the road. But if you’re looking for a more than reasonably priced growth play, and believe that multiple compression from rising interest rates won’t be severe, consider this former meme stock a buy.
Meme Stocks: Cassava Sciences (SAVA)
Source: Pavel Kapysh / Shutterstock.com
Until August, Cassava Sciences was one of the top meme stocks, zooming higher thanks to the potential of its Simulfilam Alzheimers drug candidate. However, not too long after that, shares experienced a big decline, due to data manipulation allegations.
SAVA stock has attempted to bounce back a few times since then. But so far, it’s failed to get back to past price levels (well above $100 per share, versus around $44.75 per share today). Still, despite its rebound struggles, this high-risk, high-possible return biotech remains a story stock worth keeping an eye on.
As InvestorPlace’s Louis Navellier argued in early December, there’s tremendous upside with this stock, if Simulfilam gets through the allegations, and makes its way through the FDA approval pipeline. With yet another academic journal saying it can’t find evidence of data manipulation, there’s now even more credence to CEO Remi Barbier’s claims that this key controversy is the product of a “short-and-distort” campaign from short sellers.
Of course, like with any clinical-stage biotech play, be careful. Even if the data allegation brouhaha finally goes away, SAVA stock will likely experience another massive drop, if the FDA rejects Simulfilam for FDA approval. Nevertheless, with the big potential for it to bounce back in 2022, keep an eye on it.
Virgin Galactic (SPCE)
Source: Christopher Penler / Shutterstock.com
Put simply, the meme stocks trend was like rocket fuel for SPCE stock in early 2021. With its high concept business plan (space exploration), it’s no shock Reddit traders sent Virgin Galactic from the low $20s per share, to the low $60s per share, last January and February.
Yet while it did join in on the fun during the short squeeze-centric second meme stock wave, after first plunging due to the spring SPAC wipeout, it’s been tough for Virgin Galactic investors since then. This is due to several factors, including selling by insiders like Chamath Palihapitiya, and delays in its commencement of commercial flights.
The near-term could remain tough for Virgin. The drop in enthusiasm for speculative growth stocks could continue, due to concerns about a more hawkish Fed. With this, you may not want to buy SPCE stock right away. However, you may want to buy it, if it’s still at depressed prices a few months from now.
It’s going to take years for Virgin Galactic to experience its true “lift off” moment. But between now and then, shares could make another bolt to the skies. Progress with its business could convince investors to warm back up to it.
Meme Stocks: Tilray (TLRY)
Source: Jarretera / Shutterstock.com
Despite blue wave election results, U.S. pot legalization failed to happen in 2021. The chances of federal pot reforms still appear questionable for 2022 too. With this, plus a recent report from Barclays arguing that there’s not much upside for Canadian cannabis companies from U.S. pot reform, Tilray stock has continued to draft lower.
This comes atop the big declines it endured earlier this year, after its short-lived experience as a meme stock. In all, the TLRY stock price has fallen nearly 89% since hitting its 52-week high on Feb. 10. It may seem like it’s best to follow the meme crowd’s lead, and forget about this stock completely.
Or is it? Tilray may be a situation where going against the grain could pay off. U.S. legalization may not be a big catalyst for it anymore, much less a likely one. Yet there are several catalysts at play. Ones that could send the stock (at around $7.50 per share today) back to much higher prices.
Like I discussed back in November, its expansion efforts in Canada and Europe could do just that. As my InvestorPlace colleague David Moadel recently argued, success with its line of THC-infused investors could have TLRY stock investors soon seeing green. Investors still bullish on pot stocks may want to buy it. There’s still plenty in its corner to help spark up a recovery.
On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.
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Platinex Acquires W2 Copper-Nickel-PGE Project Near Ring of Fire
Source: The Critical Investor 01/20/2022
After acquiring the W2 Copper-Nickel-PGE project in Ontario, Platinex adopted a new dual strategy…
Source: The Critical Investor 01/20/2022
After acquiring the W2 Copper-Nickel-PGE project in Ontario, Platinex adopted a new dual strategy by going back to its roots, which involved platinum group elements (PGE), but is also in the process of revitalizing its large and prospective Shining Tree gold exploration project in the Abitibi Greenstone Belt, also in Ontario, writes The Critical Investor.
is developing quite an attractive asset portfolio in Ontario, Canada. The company already owns the highly prospective and strategically located district-scale Shining Tree gold project and very recently acquired the W2 Copper-Nickel-PGE project. Additionally, Platinex holds numerous net smelter return (NSR) royalties in its portfolio. (PTX:CSE; 9PX:FSE)
In the last year, management and board were strengthened, and a high-quality core investor base came in following these changes, providing additional value and support. The stock is coming off long time lows, and remains at an attractive entry point for new investors. Backed by its new investor base, the company is looking to raise money soon.
It is anticipated that strong drill results, positive metal price movements, and renewed enthusiasm in the Ring of Fire after the recently finalized acquisition of Noront by Wyloo Metals could provide substantial catalysts for share price appreciation in 2022. Potential new and complementary asset acquisitions could provide an additional boost. In addition, in the first half of 2022 the company will be looking at other strategic transactions to potentially enhance shareholder value without significant dilution.
Investors are encouraged to review the Key Points at the end of this article for a quick snapshot of the company.
Platinex is a junior mining company exploring mineral properties in Ontario, Canada. The company has adopted a dual strategy: it will continue its gold exploration activities at the Shining Tree gold project in southwest Timmins, and is also entering the battery metals space now through the acquisition of the W2 Copper-Nickel-PGE project in the Ring of Fire region. Demand for battery metals such as copper, nickel and PGEs (platinum group elements including platinum and palladium), is at historical highs, with future growth expected due to the unstoppable electrification and durable energy paradigm shift.
The Shining Tree gold project has been the company’s main focus for a long time, as it has been in the company since 2008. After a quiet period during the 2013–2015 bear market, the company approached Shining Tree with renewed vigor in 2017, expanding the project over five times, and completing reconnaissance exploration programs including channel sampling, mapping, and gold in till sampling, with strong results. More recently an airborne magnetics survey was completed, and a LIDAR survey will be done soon.
After this, drill targets will be selected, with the company aiming to begin the next drill program at Shining Tree in the near term, pending the closing of an upcoming capital raise. The Shining Tree asset is viewed as a strategic asset for the company. With a large land package in an active camp including(AGI.TO), IAMGold (IMG.TO), Aris Gold (ARIS.TO) and many quality juniors, there is an real opportunity for the Shining Tree camp to contain another Coté Gold deposit, which located to the west.
On January 17, 2022, the company expanded its horizon, and acquired the large W2 Copper-Nickel-PGE project from a private owner, returning the company to its historical roots and in keeping with the name Platinex. As copper and nickel are both very important to the ongoing paradigm shift towards electrification, the W2 project fits perfectly with the new strategy. The next step for Platinex at W2 will be to complete a comprehensive data compilation and obtain an exploration permit. Following this, the company will be able to commence drilling of targets that have already been identified but remain untested, and carry out prospecting and geophysical surveys to identify and refine new targets.
It seemshas timed its acquisition of a 100% interest in the W2 project well, as Wyloo acquired nearby Noront (NOT.V) for C$616.9 million after a bidding war with a formidable competitor: BHP. As BHP is known for doing extremely thorough due diligence on its transactions, it seems certain the company saw compelling reasons to bypass the usual Ring of Fire objections, as this area still has been underdeveloped due to lack of infrastructure. The Ring of Fire is viewed as one of the most promising mining opportunities in Ontario for more than a century.
After a total of C$278 million in exploration has been carried out in the Ring of Fire so far, numerous significant discoveries involving chromite, copper, nickel, zinc, gold and PGEs are waiting for the first initiatives on building mining projects and accompanying infrastructure, potentially with the help of Ontario, the province with the most revenues coming from mining across Canada.
In the meantime, Platinex will be exploring its new project as soon as possible, to potentially prove up a significant deposit. The W2 project has seen significant exploration so far, ranging from sampling to airborne surveys to 8,772 meters (m) of drilling. Drill results for the property were impressive:
- 6 m of 0.56% copper equivalent (CuEq) or 0.956 grams per tonne (g/t) palladium equivalent (PdEq) (LH-01-06)
- 6 m of 0.57% CuEq or 0.971 g/t PdEq including 17 m of 1.08% CuEq or 1.86 g/t PdEq (LH-01-05)
- 42 m of 1.02% CuEq or 1.8 g/t PdEq including a high grade 4.5 m section of 4.52 g/t PdEq (LH-01-02)
Most results were intercepted close to surface, indicating substantial open pit potential. Numerous targets have been identified, and the T5 target appears to have the same geophysical signature as Eagle’s Nest (Noront/Wyloo).
Therefore it is likely the company will start drilling at these targets soon after permits are granted.
Besides the W2 project, Platinex has also assembled another impressive property: the 100% owned Shining Tree gold project in the Abitibi Greenstone Belt in Ontario, home to some of the richest gold mineralization worldwide, with total production surpassing a staggering 180 million ounces (Moz). The company has expanded this asset into an impressive 21,720 hectare land package, located strategically in between adjacent projects owned by IAMGold (the aforementioned Coté Gold > 6.5 Moz gold (Au), going into production in 2023, and Gosselin), Aris Gold (Juby, 2.3 Moz Au) and Orefinders (ORX.V) (Knight).
As can be seen, the property encompasses over 20 km of the prospective Ridout-Tyrell Deformation Zone, which is also host to the aforementioned Coté Gold and Juby deposits. The Shining Tree project is located at the crossing of the Larder Lake Fault, which is home to some of the largest gold deposits in Canada, and the Michiwakenda Lake Fault. Platinex has completed gold in till sampling in the past, outlining significant anomalies:
Platinex also completed a 51 drill hole program a while ago at the Herrick target, and hit gold at almost every hole, with highlights accounting for 7.15m @2.76 g/t Au, 46.3m @0.65 g/t Au, 7.2m @2.38 g/t Au, 14.1m @1.2 g/t Au and 12.2m @1.47 g/t Au, all within open pit depths.
Mineralization at the Herrick target is open at depth, and management hopes to find more mineralization at depth, as lots of deposits in the Abitibi show these characteristics. Besides Herrick, there are many more targets to be drill-tested, and management is currently outlining plans for this at the moment as mentioned.
Platinex also holds an interesting portfolio of royalties on projects located in Ontario, with for example a 2.5% NSR on Big Trout Lake (PGM-Ni-Cu-Cr), a 1% NSR on a claim block in the Ring of Fire (Au-Ni-Cu-PGM-Cr) and a 1% NSR on a part of the Shining Tree project. The company also holds a 2% NSR from Newmont (NGT.TO) on the Sonia-Puma Au-Cu property in Chile. Platinex’s current strategy for its royalty portfolio encompasses the creation of interesting royalties on both Shining Tree and the new W2 property, in turn creating a substantial royalty portfolio that in the future could be monetized by selling or spinning out.
There are 161.65 million shares outstanding (fully diluted 214.65 million), 38.1 million warrants (average strike price of C$0.095) and incentive stock options issued to the tune of 15 million options. Platinex has a current market capitalization of C$7.2 million based on the January 18, 2022 share price of C$0.045.
Platinex Inc, 1 year timeframe (Source: tmxmoney.com)
The current cash position of Platinex is approximately C$0.5 million, and the company will be looking to raise additional funds soon. Shares are tightly held, as management holds no less than 12% of the current shares outstanding (CEO Greg Ferron holds 2%), Treasury Metals (TML.TO) holds 10%,3.5%, European HNW’s with strong ties to management hold 25.5%, and the company also enjoys approximately 7% institutional ownership.
CEO Greg Ferron: Mr. Ferron has 20 years of mining industry and capital markets experience. He has held various senior level roles in mining, corporate finance, corporate development, and investor relations – including at(LAM.TO), , TMX Group and Scotiabank. Mr. Ferron has significant diverse merger and acquisitions experience, including Laramide’s Westwater ISR project acquisition, and more recently the Goldlund project acquisition as CEO of Treasury Metals, creating one of Canada’s largest gold developers. Mr. Ferron is also a director of Inc (FNC.V).
Non-Executive Chairman James Trusler: Chairman of the Board of the company, 1998 to present; CEO and President of the company 1998–2018, 2019 to 2021; President, J. R. Trusler & Associates (mineral consultant), 1995 to present. Geological Engineer with over 45 years of exploration experience with a history of discovery (multiple Ni-Cu-PGM deposits at the Raglan Nickel mine, owned by Glencore) and strategic acquisitions of world-class scale gold, uranium and Ni-Cu-PGE deposits.
Director Felix Lee: Mr. Lee is an economic geologist and senior executive with over 30 years of business and project management experience in the minerals industry both in Canada and internationally. Mr. Lee completed his tenure as Director and Principal Consultant to CSA Global Canada in 2019 and was previously owner and President of the predecessor Toronto-based geological consultancy ACA Howe International Limited. Felix Lee is currently the President of Prospectors and Developers Association of Canada (“PDAC”) the largest such mining industry organization in the world.
Finance Committee: Frank Hoegel: His background includes more than 20 years of direct experience in the mining industry, and a successful track record as an international financier/investor. He currently manages a natural resource fund, sits on the advisory board of Concept Capital Management, and sits on the board of several TSX Venture listed companies.
Finance Committee: Olivier Crottaz: Independent asset manager who founded Crottaz Finance. 30 years in the Swiss banking business as senior portfolio manager and tactical asset allocator at UBS and Credit Suisse as managing director.
Technical Committee: Lorne Burden: Senior manager with over 30 years experience, recently Manager Corporate Development and Senior Geologist Logistics at Royal Nickel Corporation. Former Director of PDAC.
Technical Committee: Blaine Webster: Experienced Geophysicist, Discovered 4 Moz Au property, Completed 1,500 geophysical surveys in 35 countries as President of JVX Ltd. Former President Goldeye Exploration Ltd. President Golden Mallard Corp.
- On January 17, 2022, Platinex acquired the W2 Copper-Nickel-PGE property in Ontario, close to the prospective Ring of Fire area, which is home to large chromite, base-, and precious metal deposits
- Platinex also fully owns the prospective 21,720 hectare Shining Tree gold project, which is located strategically between other gold projects nearby
- The Shining Tree gold project contains 21 km of the prolific Ridout-Tyrell Deformation Zone, which in turn contains the 6.5 Moz Coté Gold deposit (IAMGold), and the 2.3 Moz Juby gold deposit (Aris Gold)
- The company plans to conduct exploration programs on both projects in 2022
- Platinex also has an interesting royalty portfolio on copper, zinc, chromite, gold and PGE properties in Canada and Chile.
- Platinex has experienced management, and enjoys strong financial backing by Treasury Metals, a few institutions and a group of powerful European investors
- Platinex is valued at an attractive entry point at the moment, with a tiny market cap of just C$7.2 million
With its recent acquisition of the W2 Copper-Nickel-PGE project just completed as part of its new dual strategy, a new CEO, and new strategic backers coming in, and the large, prospective Shining Tree gold project ready to explore, Platinex seems to be shifting gears now. After the upcoming raise is closed, the company will be ready to execute on new exploration programs for both W2 and Shining Tree, which already have seen strong results in the past and have lots of mineralized potential. It will be interesting to see how far Platinex management can take these two large, very intriguing land packages.
This article is also published on www.criticalinvestor.eu. To never miss a thing, please subscribe to my free newsletter, in order to get an email notice of my new articles soon after they are published.
The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high-quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value.
Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.
The author is not a registered investment advisor, and currently has a long position in this stock.is a sponsoring company. All facts are to be checked by the reader. For more information go to www.platinex.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
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2) The following companies mentioned in the article are sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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( Companies Mentioned: PTX:CSE; 9PX:FSE,
7 Stocks to Buy for a Year Full of Volatility and Rate Hikes
“This time, it’s different.” Often considered the four most dangerous words in finance (five if you don’t count contracted words as singles), the…
“This time, it’s different.” Often considered the four most dangerous words in finance (five if you don’t count contracted words as singles), the sentiment warns of ignoring historical lessons and plowing ahead without a care in the world. That’s why to my knowledge, no one has uttered them in the new normal. Still, not saying it doesn’t mean you shouldn’t consider shifting strategies for stocks to buy.
For instance, you’ll often hear real-estate brokers claim that you can’t compare the housing bubble of the 2000s decade with the current rally. The idea is that buyers today are not of the subprime quality that dominated the last crisis. Without the threat of losing their homes due to say, questionable decisions of acquiring adjustable-rate mortgages, housing-related stocks to buy could likely continue rising higher.
That is, except for one problem: many of those sector-specific stocks to buy are not doing well. While the acquisitive party themselves may be prime borrowers (or even cash buyers), the overall economy still stands on shaky ground. As the Wall Street Journal pointed out, U.S.-based collective corporate debt is over $11 trillion. Additionally, other headwinds such as soaring consumer prices could cause people to limit their purchases — and that’s exactly what happened.
It’s not inflation that entirely should take the blame. The novel coronavirus’ omicron variant has taken its toll on commerce. Yet, the Federal Reserve has seen enough data to be worried. Thus, it’s likely that this year will be one of aggressive and hawkish monetary policies. The rate hikes may come earlier and with perhaps greater gusto as inflation fears continue to shape politics. In turn, that’s a good sign to rethink your stocks to buy.
However, don’t get too comfortable that rising borrowing costs are the end-all, be-all. As I’ve warned in multiple InvestorPlace articles, money velocity is down near all-time recorded lows. That’s an indication that regular folks are deeply concerned about what lies ahead. Therefore, it’s a good idea to consider these historically resilient stocks to buy.
- Charles Schwab (NYSE:SCHW)
- Progressive (NYSE:PGR)
- Kellogg (NYSE:K)
- Coca-Cola (NYSE:KO)
- Duke Energy (NYSE:DUK)
- Southern Copper (NYSE:SCCO)
- WPM) (NYSE:
Perhaps more than any other period in modern market history, investors must remain vigilant and agile. While it’s good to have a well-grounded framework to base your ideas from, should events and narratives change, you want to be flexible with your stocks to buy. Nevertheless, these ideas may prove worthwhile if the Fed is serious about its hawkishness.
Stocks to Buy: Charles Schwab (SCHW)
Source: Isabelle OHara / Shutterstock.com
Ordinarily, I wouldn’t think about adding Charles Schwab on any list of stocks to buy. Don’t get me wrong — it’s a fine establishment, one of the most respected institutions in high finance. However, people tend to want a little pizzazz in their portfolio. Certainly, when people get up in the morning to check their tickers, financial services securities don’t exactly rank highly.
I can imagine folks getting a jolt similar to a caffeine boost from cryptocurrencies. SCHW stock, though? Not so much.
But as I alluded to earlier, the narrative has changed. Now, financial services firms may be among the most attractive stocks to buy. Primarily, the company serves many high-net-worth investors, who probably benefitted handsomely from the time following the spring doldrums of 2020. How could you not? A monkey throwing darts would have yielded some positive ideas.
However, it’s in times of great uncertainty — such as the present juncture — where financial advisors really earn their keep. It’s easy to pick bullish ideas in an extremely bullish bull market. Now pick ones that will keep the boat afloat in ambiguous waters. And that’s part of the reason why SCHW stock may be off to a good start this year.
If I had to pick a more sleep-inducing sector than financial services as an investment, it would be insurance. Home insurance, auto insurance, whatever — it’s really boring. Again, it’s not about the business itself. As I mentioned in an article for Benzinga, the insurance industry has a rich history in the U.S. In fact, entrepreneurs established the first insurance firm in South Carolina to provide fire coverage.
If you want to go further back in time, in ancient Babylon, merchants signed bottomry contracts, which were loans that covered sea shipments. If an incident resulted in lost cargo, merchants did not have to repay the loan. Furthermore, the interest on this contract covered the insurance risk.
However, what about modern times? Well, insurance stocks to buy tend to have a linear relationship with interest rates: the higher the rates, the greater the growth. Obviously, you don’t want to invest based on arbitrarily defined short-term windows. However, I can’t help but notice that PGR stock is up nearly 5.5% year-to-date (YTD).
Fundamentally, it’s possible that as Covid-19 fades, companies will recall their workers. In turn, that would imply a greater need for auto insurance — benefitting Progressive.
Stocks to Buy: Kellogg (K)
Source: DenisMArt / Shutterstock.com
From boring stocks to buy to boring breakfasts, Kellogg really encompasses it all.
I love Kellogg and it’s a wonderful business. However, when one in four Americans say they never have time to make breakfast — and with nearly two-thirds sometimes getting so busy that they skip meals — the critics of K stock have some viable arguments regarding relevancy concerns.
However, with the new normal, Kellogg could hedge against the return-to-work idea I just mentioned. If the mass work-from-home experiment becomes permanent, then people will have more time to munch on Kellogg’s various scrumptious breakfast products. Worse comes to worst, you might be able to claim Amish identity and have your webcam turned off.
On a more guttural level, grocery shortages inherently and cynically provide a tailwind for Kellogg through enhanced demand. Plus, like many resilient stocks to buy, K stock features a higher-than-average dividend. So, all in all, investors should continue to keep this in mind for their portfolio of stocks to buy.
Source: Fotazdymak / Shutterstock.com
By now, we’re all familiar with the concept of retail revenge. But if you haven’t heard, it’s the collective opening of wallets as consumers essentially bid to make up for lost time and experiences. Furthermore, with the personal saving rate skyrocketing during the lockdowns for obvious reasons, Americans had a lot of money to spend.
While I’m not entirely clear how much of the pandemic savings are in consumers’ balance sheets, as a rate of personal income relative to cash outlays and taxes, spending has normalized back down to pre-pandemic norms. Cynically, this may bolster Coca-Cola under the thesis of cheap entertainment stocks to buy.
Naturally, mainstream media outlets have a tendency to shift the blame on the profligacy of American consumers. But the ultra-low money velocity suggests this idea may not be entirely accurate. Instead, it’s possible that big corporations have decimated wages to the point where it’s impossible for average Americans to get ahead. The widening wealth gap also provides confirming evidence.
And please — don’t give me this toxic positivity, hustle-culture garbage about working for your dreams. If it was remotely possible for everyone to 10X their income, everyone would do it. Instead, the reality is that people will penny-pinch while still seeking cheap thrills, which cynically bodes well for Coca-Cola’s addictive products.
Stocks to Buy: Duke Energy (DUK)
Source: jadimages / Shutterstock.com
Speaking of hustle culture, one of the ways that you may be able to determine whether a trend is a fading fad or a viable construct is to check if the concept works in any other context. For instance, if hustling can generate 10X your current income, can hustling utility workers generate 10X more electricity than they already do?
The answer of course is no, and the reason is that we live in a world of finite resources. Certainly, it’s possible for some elements within a system to 10X their productivity. But that would also limit many other elements from achieving their 10X potential.
Believe me, the primary beneficiaries of toxic positivity are only the ones dumping said toxicity.
And that brings me to Duke Energy. Since it’s impossible for any utility firm to 10X their capacity through “grinding” — whatever that means — Duke Energy benefits as one of the core stocks to buy during times of uncertainty. Why? Because modern society can’t survive without energy.
Put another way, consumers will cut almost anything out of their budget before they cut utilities. And once you go there, your life can 10X but in the other direction.
Southern Copper (SCCO)
Source: Coldmoon Photoproject/Shutterstock.com
Although some measure of volatility should be expected throughout 2022, the impact on the commodities market could be mixed. In particular, copper demand has soared since the spring doldrums of two years ago. Furthermore, while much of the trading in the spot market throughout last year has been horizontal in nature, what’s more important is that copper prices show no sign of fading.
Should this continue to be the case, Southern Copper could represent one of the stocks to buy during this uncertainty. Even with a questionable economic backdrop, the political powers in this nation are generally eager supporters of electric vehicles (EVs). Sure enough, copper is a “major component in EVs used in electric motors, batteries, inverters, wiring and in charging stations.”
Put another way, if you believe in EVs, then you also synergistically believe in copper. And of course, that lends itself to potentially higher prices of both SCCO stock and the underlying asset.
Finally, copper has become even more of a strategic asset now that China is competing aggressively with the U.S. in the EV space. Combined with its well-above-average dividend yield, SCCO stock makes for an interesting case among stocks to buy.
Stocks to Buy:(WPM)
Source: allstars / Shutterstock.com
To be upfront, precious metals miners — or in the case of, streaming companies — tend to perform best under inflationary circumstances. Under this scenario, the weakening dollar incentives investors to rotate some of their risk capital into assets commanding universal intrinsic value. That way, they can preserve their purchasing power, rotating back into fiat currencies once the opportunity is appropriate.
But to wager on WPM stock when the dollar might get stronger due to hawkish monetary policies? That seems awfully risky until you consider the precious metal complex’s other catalyst, the fear trade.
Recently, I’ve been reading reports about how thieves are digging through train cargo loaded with packages in downtown Los Angeles. Due to these activities, they’re also creating massive trash heaps around the railroad tracks. What’s more, other articles state that many folks are scavenging through the trash, occasionally finding items of value.
Let me be clear: there’s no excuse for lawlessness. At the same time, desperate economic measures are facilitating wholesale desperate actions. So I’m not necessarily quick to judge.
However, such actions may point to disturbing realities regarding our economy — meaning that WPM stock could be among the relevant stocks to buy this year.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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Intel to ramp up domestic production again
Intel breaks news today with additional plans to help with an ongoing chip shortage in the microprocessor industry. Reuters reports Intel plans a $20…
Intel breaks news today with additional plans to help with an ongoing chip shortage in the microprocessor industry.
Reuters reports Intel plans a $20 billion investment in two Ohio plants that would create a combined 10,000 jobs, including the labor needed to build the plants.
Citing previous Intel efforts in Arizona, Martin Baccardax at The Street also offers the context of a $52 billion Biden funding plan for domestic chip development.
“(The bill) would help U.S. chipmakers expand domestic production levels and reduce their dependence on overseas markets for crucial components in the nation’s industrial and tech supply chain,” Baccardax writes.
But lest we think that the chip shortage is over, we have breaking updates showing that companies are still having a hard time sourcing microprocessors, including this news from Toyota:
“Toyota (has said it is) unlikely to meet its 2021-22 production target due to the chip shortage,” writes an unnamed analyst at TechXplore. “The world’s top-selling carmaker Toyota said Tuesday it no longer expects to meet its annual production target with operations hampered by the global chip crunch.”
“The chip shortage isn’t likely to resolve itself until well into 2022, and eventually, the group of people willing to pay a higher price may run dry,” adds Sean Szymkowski at Road/Show.
And then there’s the EV boom.
“The price of nickel, a critical component in the production of electric vehicle (EV) batteries, has hit a decade high,” writes Amit Mishra at Swarajya Jan. 20. “On the London Metal Exchange, the three-month nickel contract jumped as much as 4.4 per cent to $22,745 a tonne on 12 January 2022, the highest since August 2011. The rise reflects a broader boom in the commodity market due to falling stockpiles of critical metals and a production increase of EV’s from car manufacturers. With battery raw material prices soaring, the price sustainability of EV is under stress and has the potential to disrupt the transition to electric mobility which is a promising global strategy for decarbonising the transport sector. India is among a handful of countries that support the global [email protected] campaign, which targets to have at least 30 per cent of new vehicle sales be electric by 2030.”
So if you have related holdings, form your own idea of what to expect with chips based on available data. And make moves accordingly.
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