The stock market seems like a pretty good place to be right now.
Despite a government report indicating slower economic growth to 2% in the third quarter, stocks still ended the week at record highs.
Even bad news can be good news for stocks, as investors may have viewed the data as a reason the Federal Reserve decided not to announce that it would start cutting its buyback program. obligations.
Or it may just be that investors think the worst of the pandemic is in the rearview mirror (after all, the gross domestic product report is looking back) and that a strong corporate earnings season bodes well for the country. economy.
“As the economy continues to grow, with an infrastructure bill soon to be passed by Congress and possibly a major social services program, and with COVID cases receding, investors should be positioned for a further reopening of the economy and further expansion, âsaid Chuck Lieberman, chief investment officer at Advisors Capital Management. “This is all good news for stocks, which is why stock declines tend to be short lived.”
With that in mind, here are three hot stocks to buy now:
- Aehr test systems (ticker: AEHR)
- LP energy transfer (ET)
- Quanta Services Inc. (PWR)
The three major US stock indices closed on the last trading day of October at record highs amid strong corporate earnings. While these heady numbers are great for many short-term investors, they make others wary.
“With the S&P and Nasdaq mega-caps so wide and still vulnerable, we suggest focusing on a handful of stocks in special situations,” said Gene Inger, who provides daily analysis of the stock markets through The Inger. Letter.
He mentions Aehr Test Systems, a global supplier of semiconductor testing equipment whose inventory has grown by more than 800% since the start of the year. It’s hard to find hot stocks that work like AEHR. âThey are leading the pack in testing silicon carbide wafers,â said Inger.
As the specialist website Semiconductor Engineering points out, electric vehicles represent a âgreat growth opportunityâ for these alternatives to traditional silicon semiconductors. âIt can extend runtime per charge compared to silicon, reduce the time it takes to charge a battery, and contribute to the overall efficiency equation by providing the same runtime with less battery capacity and less weight,â says the publication.
As the demand for silicon carbide chips increases, it looks like the demand to test them will also increase. In the company’s latest quarterly report, the company said its net sales increased 181% year-over-year and raised its revenue forecast for its 2022 fiscal year by around 80%, to at least $ 50 million. The company said it ended the quarter with record single-quarter bookings, including several “large orders” from automotive semiconductor supplier Fortune 500.
âWe believe we will add several new silicon carbide customers over the next 18 months,â CEO Gayn Erickson said in a press release accompanying the results.
And that can’t hurt Aehr’s chances of being based in Fremont, Calif., Which is also home to Tesla Inc. (TSLA), the world’s largest electric vehicle maker.
Next among the hot stocks to buy now is Energy Transfer LP. As the economy recovers, so will the transportation of people and goods and the manufacture of those goods, which all require energy.
While the United States has made strides in producing renewable energy from wind and solar power, it still depends on fossil fuels for most of its electricity, natural gas takes the lion’s share. And whether by car, train, boat or plane, our transport is still mainly supplied by petroleum products.
These products must be transported between their point of extraction and end users, and pipeline company Energy Transfer says about 30% of U.S. natural gas and crude oil passes through its pipelines.
The company reduced its capital spending, as well as its cash distribution, during the pandemic. Yet Energy Transfer shares, which rose more than 55% in 2021, pay a hefty dividend of 6.3%. This is an interesting distribution given that the Treasury yields are very low.
Because of the amount of cash to distribute available to the company relative to its distribution, Lieberman expects “more money will soon be diverted to increase its distribution or buy back shares.”
If the company reduced its distribution to what it was before the pandemic, shareholders would gain, as they would if the company bought back shares, thus raising the share price.
Quanta Services Inc. (PWR)
The last of the hot stocks to buy now is Quanta Services. This company specializing in infrastructure subcontracting services straddles the old energy economy and the new.
âQuanta’s business is aligned with long-term sustainable trends, including the transition to a carbon neutral economy, 5G wireless networks, battery storage and hydrogen,â said Will Reese, head of research on shares at UMB Bank. âQuanta is an indirect way to play in the growing wind and solar markets, which are poised for significant growth over several decades as North America moves towards a carbon neutral economy.
In October, she completed the acquisition of Blattner Holding Co., a leading utility-scale renewable energy infrastructure solutions company that provides engineering, procurement, project management services. and construction developers of wind, solar and energy storage. This adds to Quanta’s expertise in infrastructure projects for the utilities, communications, oil and gas sectors.
Overall, as the outdated U.S. electricity grid continues to transform, Quanta’s acquisition of Blattner should help them capitalize on North America’s energy transition by adding a renewable energy construction company. to its primary transmission and distribution platform, âReese said. “This should help Quanta achieve greater market share in a fragmented industry and help propel the company higher in the long run.”
In August, the company reported record second quarter revenue and net income, along with a record $ 17 billion backlog. It raised its expected revenues for 2021 to between $ 12.20 billion and $ 12.45 billion. Quanta shares have risen more than 75% since the start of the year.