by Ian Cooper
Markets have been chaotic.
There was the coronavirus, inflation, aggravated consumers, fears of recession, a more aggressive Federal Reserve, issues with Russia, China, and North Korea. And while we can’t tell you what could possibly happen next, we can point you in the direction of hot stocks that are not only oversold, but setting up for potentially big moves.
Apple (AAPL)
The company just beat expectations on revenue and profits, and it showed that global demand for its products is still high. In its fourth quarter, the company’s revenue was up 8% to $90 billion. That would have been higher, if the U.S. dollar didn’t spike as sharply as it did. In fact, even the company said growth would have been in the double-digits without that.
Mac sales were up 25% to $11.5 billion in the quarter. iPhone sales were up 10% to $42.6 billion. Operating income was up by 5% to $25 billion. And EPS was up 4% to $1.29, putting it above expectations for $1.27. Also, analysts, such as Deutsche Bank’s Sidney Ho, Apple is trading at a reasonable valuation, and has a buy rating, with a price target of $175. Apple also carries a dividend yield of 0.66%, and it’s been aggressive with stock buybacks.
Amazon (AMZN)
Amazon was beaten up badly over these last few months.
All thanks to slowing growth. In its third quarter, for example, the company posted revenue of $127.1 billion, which was up about 15% year over year. Unfortunately, it was lighter than expectations for $127.46 billion. Worse, its cloud business saw 27.5% growth for the quarter, which was the slowest since 2014. Its revenue forecast of between $140 billion and $148 billion was also below expectations for $155.15 billion.
But don’t write it off just yet. Amazon is still a strong company that’s simply down on temporary noise. Better, analysts still love the stock. Jefferies analyst Brent Thill, for example, says, “We believe Amazon’s current stock price already embeds headwinds from a recession/cost inflation and expect the market to attribute greater value to core-retail over time as cost headwinds are addressed and profitability expands.”
Tesla (TSLA)
Shares of Tesla got run over for most of 2022.
Most recently, it fell after posting Q3 numbers that fell short of expectations. The company also slid after reporting 343,000 total deliveries, which was below estimates for 364,660. Two, some investors turned bearish with Elon Musk’s involvement with Twitter. They believe there’s a risk of management distraction. However, don’t write this one off either.
Analysts still love the stock. Wedbush analyst Dan Ives, for example, said, “We view this more of a logistical speed bump rather than the start of a softer delivery trajectory into the [fourth quarter and 2023] and remain bullish on the Tesla story,” he said, as quoted by Barron’s.
Plus, the EV boom shows no signs of slowing. President Biden, for example, wants 50% of all new auto sales to be electric by 2030. In addition, the company does see growth in 2023, with new plants in Germany and Texas ramping up. And, it still plans to deliver another 450,000 vehicles in the fourth quarter of the year.
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