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After a Gloomy 2022, 2023 Could be Much Better: 5 Growth Picks
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U.S. stocks ended 2022 with sharp losses, while the major indexes finished the year with nearly no record highs. Wall Street’s major bourses registered their first yearly drop since 2018 as the Federal Reserve’s aggressive monetary policy stance to tame sky-high inflation, recession fears, the Russia-Ukraine crisis and concerns over COVID outbreaks in China dampened investors’ sentiment.
The broader S&P 500 tanked 19.4% in 2022, its first double-digit percentage annual loss since the Great Recession period, and resulted in an almost $8 trillion decline in market cap. The tech-laden Nasdaq plummeted 33.1%, while the 30-stock Dow shed 8.9%.
The Dow Jones Market Data added that the S&P 500 wrapped up 2022 with just one record close, its lowest since 2012. In comparison, the index had notched a whopping 70 record-high closes in 2021. Similarly, the Nasdaq finished 2022 with no record closes for the first time since 2014. On the other hand, the Dow ended the year with only two record closes to its name.
The lack of new record highs in the equity market was accompanied by declines in other assets, such as bonds that are considered to be safer investment options and those that are primarily not, including cryptocurrencies. Nonetheless, the scarcity of milestones, particularly in the equity market, was mainly due to the Fed hiking interest rates aggressively to curb 40-year high inflation. But such a hawkish stance pushed borrowing costs higher and curtailed consumer spending levels, raising fears of an economic slowdown in the near future.
This year, however, the trajectory of the stock market is primarily dependent on inflation and the Fed’s policies in trying to contain it. Inflation, by the way, has started to show signs of cooling down. The consumer price index increased at an annual pace of 7.1% in November, which is less than October’s year-over-year increase of 7.7%. Lest we forget, the consumer price index had soared 9.1% year over year in June. Thus, thanks to the falling rate of inflation, the Fed may not unleash a barrage of rate hikes this year, as it did last year, eventually leading to a pickup in consumption.
Additionally, as COVID-led curbs are sooner or later expected to be repealed in China, its economy should open up and equities may make a comeback this year. At the same time, the emergence of automation and digitalization in 2023 would probably lead to a rotation of funds into growth players like tech stocks.
Thus, the year 2023 is likely to be a much better year for the stock market than last year. Hence, it’s prudent for investors to make the most of a better year by investing in stocks poised to grow in the near term. We have, therefore, highlighted five stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and a Growth Score of A or B, a combination that offers the best opportunities in the growth investing space. You can see the complete list of today’s Zacks Rank #1 stocks here.
CalMaine Foods (CALM - Free Report) is primarily engaged in the production, grading, packing and sale of fresh shell eggs, including conventional, cage-free, organic and nutritionally-enhanced eggs. CALM has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 51.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 351.5%.
Chico's FAS is a cultivator of brands serving the lifestyle needs of fashion-savvy women 30 years and older. CHS has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 7.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 127.5%.
DCP Midstream Partners is a leading energy infrastructure firm. DCP has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 14% over the past 60 days. The company’s expected earnings growth rate for the current year is 181.1%.
ADT (ADT - Free Report) provides security and automation solutions for homes and businesses, primarily in the United States. ADT has a Zacks Rank #1 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 200% over the past 60 days. The company’s expected earnings growth rate for the current year is 304%.
Halliburton (HAL - Free Report) is one of the largest oilfield service providers in the world, offering a variety of equipment, maintenance, and engineering and construction services to the energy, industrial and government sectors. HAL has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 94.4%.
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After a Gloomy 2022, 2023 Could be Much Better: 5 Growth Picks
U.S. stocks ended 2022 with sharp losses, while the major indexes finished the year with nearly no record highs. Wall Street’s major bourses registered their first yearly drop since 2018 as the Federal Reserve’s aggressive monetary policy stance to tame sky-high inflation, recession fears, the Russia-Ukraine crisis and concerns over COVID outbreaks in China dampened investors’ sentiment.
The broader S&P 500 tanked 19.4% in 2022, its first double-digit percentage annual loss since the Great Recession period, and resulted in an almost $8 trillion decline in market cap. The tech-laden Nasdaq plummeted 33.1%, while the 30-stock Dow shed 8.9%.
The Dow Jones Market Data added that the S&P 500 wrapped up 2022 with just one record close, its lowest since 2012. In comparison, the index had notched a whopping 70 record-high closes in 2021. Similarly, the Nasdaq finished 2022 with no record closes for the first time since 2014. On the other hand, the Dow ended the year with only two record closes to its name.
The lack of new record highs in the equity market was accompanied by declines in other assets, such as bonds that are considered to be safer investment options and those that are primarily not, including cryptocurrencies. Nonetheless, the scarcity of milestones, particularly in the equity market, was mainly due to the Fed hiking interest rates aggressively to curb 40-year high inflation. But such a hawkish stance pushed borrowing costs higher and curtailed consumer spending levels, raising fears of an economic slowdown in the near future.
This year, however, the trajectory of the stock market is primarily dependent on inflation and the Fed’s policies in trying to contain it. Inflation, by the way, has started to show signs of cooling down. The consumer price index increased at an annual pace of 7.1% in November, which is less than October’s year-over-year increase of 7.7%. Lest we forget, the consumer price index had soared 9.1% year over year in June. Thus, thanks to the falling rate of inflation, the Fed may not unleash a barrage of rate hikes this year, as it did last year, eventually leading to a pickup in consumption.
Additionally, as COVID-led curbs are sooner or later expected to be repealed in China, its economy should open up and equities may make a comeback this year. At the same time, the emergence of automation and digitalization in 2023 would probably lead to a rotation of funds into growth players like tech stocks.
Thus, the year 2023 is likely to be a much better year for the stock market than last year. Hence, it’s prudent for investors to make the most of a better year by investing in stocks poised to grow in the near term. We have, therefore, highlighted five stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and a Growth Score of A or B, a combination that offers the best opportunities in the growth investing space. You can see the complete list of today’s Zacks Rank #1 stocks here.
CalMaine Foods (CALM - Free Report) is primarily engaged in the production, grading, packing and sale of fresh shell eggs, including conventional, cage-free, organic and nutritionally-enhanced eggs. CALM has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 51.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 351.5%.
Chico's FAS is a cultivator of brands serving the lifestyle needs of fashion-savvy women 30 years and older. CHS has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 7.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 127.5%.
DCP Midstream Partners is a leading energy infrastructure firm. DCP has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 14% over the past 60 days. The company’s expected earnings growth rate for the current year is 181.1%.
ADT (ADT - Free Report) provides security and automation solutions for homes and businesses, primarily in the United States. ADT has a Zacks Rank #1 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 200% over the past 60 days. The company’s expected earnings growth rate for the current year is 304%.
Halliburton (HAL - Free Report) is one of the largest oilfield service providers in the world, offering a variety of equipment, maintenance, and engineering and construction services to the energy, industrial and government sectors. HAL has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 94.4%.