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Sport News | These 7 hot stocks are about to get so much hotter in the first quarter 

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These 7 hot stocks are about to get so much hotter in the first quarter

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the Dow and S&P500 reached new all-time highs in the first days of 2022 – in the absence of the Nasdaq – but have continued to have a difficult few weeks since. Despite this, there were actually a handful of hot stocks.

These stocks not only withstood the selling pressure in the broader market, they actually traded higher too much.

Another name for this list could be relative strength. In other words, they outperform other stocks and the market as a whole. Moreover, these stocks tend to have high growth and many of them have reasonable valuations.

In short, at a time when everything seems to be going south, these stocks still have the potential to go north. Let’s look at some hot stocks to consider buying.

  • Ford (NYSE:F)
  • SPDR Energy Select Sector Fund (NYSEARC:XLE)
  • Exxon Mobil (NYSE:XOM)
  • Toronto-Dominion Bank (NYSE:TD)
  • Procter & Gamble (NYSE:PG)
  • PepsiCo (NYSE:DYNAMISM)
  • Pioneer of natural resources (NYSE:PXD)

Hot stocks to buy: Ford (F)

Source: DK Grove / Shutterstock.com

Ford is an interesting action, because if this article had been published before January 19th, it would have been a very successful name. The stock would be above all its major moving averages and it would beat the indices hands down.

After a 20% dump from the recent peak, Ford has lost some of its shine. However, it is now roughly flat on the year against the S&P 500 and Nasdaq, which are down 7.5% and 11.5%, respectively.

So despite recent bumps in the road, Ford shares are still outperforming the broader market.

However, there are plenty of reasons to be excited here. Not only is the company electrifying part of its fleet, the best-selling in the country vehicle – the F-150 – is also in shock. The company will soon launch its F-150 electric pickup truck, beating most of its competitors to the punch.

This could unlock huge potential for the stock. That is, if it trades something like electric vehicle stocks in the recent past. With a waiting list exceeding 200,000 customers before Ford stopped taking reservations and considered double production of the truckthere is a lot to look forward to here.

Additionally, analysts expect fairly solid growth in 2021 and 2022 for the automaker, with estimates calling for a double-digit increase in revenue. Finally, the stock trades at around 10 times earnings and recently reinstated its dividend.

Selected Energy Sector SPDR Fund (XLE)

Sport News | These 7 hot stocks are about to get so much hotter in the first quarter 

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A few weeks ago, there were only two sectors that were trading particularly well. One was finance, but that group disappeared once the big investment banks started reporting profits. The other was energy.

While the energy values ultimately plunged with the market on January 21 – as the S&P 500 fell to its 200-day moving average and with the Nasdaq in correction territory – there is a chance that this group could continue to rise.

Of course, this all coincides with energy prices. If the demand for energy were to remain high, the demand for these stocks should also be.

Every share of the top 10 holdings in the XLE has risen over the previous three months. That is, with the exception of his holding No. 10, Kinder Morgan (NYSE:KMI), which is down 1.3%. However, this is only 3% of its fund.

In total, the top 10 stocks in XLE account for 75% of its total weighting, so it’s quite significant that 90% of this group is higher over the past 90 days, especially when the market is under pressure.

Hot stocks to buy: Exxon Mobil (XOM)

Sport News | These 7 hot stocks are about to get so much hotter in the first quarter 

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If we want to be precise in energy space, let’s be precise. The largest holding in the XLE ETF is Exxon Mobil, which has a weighting of 22.3%. This slightly takes it away Chevron (NYSE:CLC), which has a weighting of 21.2%.

I didn’t choose Exxon because it was the highest weighting in the XLE ETF. Instead, I picked it based on its relative outperformance. Simply put, when the going got tough last week, Exxon held up better than many of its peers.

The way he performs against Chevron is also impressive.

Exxon is up 18% so far this year and 46% over the past 12 months. Chevron has also performed well — especially relative to the broader market — but is up only 8.2% and 33.1% this year and in the past 12 months, respectively.

Exxon is an energy conglomerate, so as long as demand for natural gas and crude oil remains stable, this stock should continue to perform well. Additionally, technicals continue to favor this stock, as well as this sector.

Helping the most could be the evaluation. Shares are trading at just 14 times 2021 earnings, which are expected to rise 18% in 2022.

Toronto-Dominion Bank (TD)

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Financiers were a recent leadership group, but the sector lost that distinction once JP Morgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and others have started reporting their quarterly results.

The regional banks held up better, but they ended up disappearing too. The only exception was the Toronto-Dominion Bank.

Known as “TD” for short, this stock continues to perform well. It may be the next to topple – the next “domino to fall,” so to speak.

But it continues to outperform its peers and if it can maintain some of its trend, it could continue to rise.

Like Exxon, it has a low valuation, trading at just 12.2 times 2021 earnings. Although its earnings and revenue growth forecasts are only modest for 2022, it pays a dividend yield of 3.5 %.

Hot stocks to buy: Procter & Gamble (PG)

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Source: Jonathan Weiss/Shutterstock.com

Seeing a staple consumer product like this as the market leader is somewhat worrying. However, it’s hard to deny the strength we’ve seen in Procter & Gamble lately. This relative strength is no secret either.

While P&G fell in two straight weeks to start 2022, it had ripped off 10 straight weekly gains before that time. That’s pretty impressive for what many would consider a boring, slow defensive stock.

Despite the slight pullback, the shares were trading fairly well overall before the company reported earnings. Contrary to what we see with most companies right now, the stock has actually rallied on earnings.

Earnings beat analysts’ estimates, while revenue of nearly $21 billion beat expectations by $600 million.

Management cited high demand as the reason for the beats. However, it was their comments about the future that helped propel the stock higher. The company raised its outlook for full-year organic sales and cited strong pricing power.

When you have a business model that’s built on innovation, that delivers higher levels of enjoyment, that solves consumer problems better, you’re able to charge a little more,” said CEO Jon Moeller.

PepsiCo (PEP)

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Another defensive leader is PepsiCo. As the stock market hit new lows for the year on Friday, January 21, PepsiCo hit new tops. And I’m not just talking about new highs for 2022, but new all-time highs.

Can the company hold out? For what it’s worth, Coca Cola (NYSE:KO) is also trading well, so it’s not like PepsiCo is all alone in the middle of its rally.

Analysts expect revenue growth of around 11% this year and earnings growth of 13%. However, as 2021 draws to a close (at least in terms of reported financial years), attention turns to 2022.

For next year, analysts expect revenue and profit growth of only 4% and 8%. While these are pretty solid expectations, this is a deceleration from 2021, which could act as a negative catalyst. That is, unless management can tell a better-than-expected story to investors when the company reports earnings, as P&G did.

For now though, it’s hard to bet against the drinks and snacks conglomerate.

Hot stocks to buy: Pioneer Natural Resources (PXD)

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I thought about increasing this gallery up to eight stocks, as I was torn between Pioneer Natural Resources and Mondelez (NASDAQ:MDLZ), the latest of which has just reached new heights.

However, I decided to keep the list to seven stocks and go with Pioneer Natural Resources.

The stock and the company has momentum and, combined with its low valuation, I think it could have more upside.

Analysts expect 190% revenue growth and 550% earnings growth in 2021. In other words, it’s been a year of massive recovery for energy stocks, as demand has returned in strength. However, 2022 should not be a slack year.

Analysts are expecting 16% revenue in the coming year, but what’s really exciting are earnings. Consensus estimates call for more than 50% growth in net income and come at a time when the stock is trading at just 15.5 times 2021 earnings.

As of the date of publication, Bret Kenwell had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Bret Kenwell is the director and author of Future Blue Chips and is on Twitter @BretKenwell.



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