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11 Best Stocks to Invest in by Sector

Matt Whittaker
·9 min read

These are the top stocks to buy in each sector.

As of a 2018 reorganization, companies in the S&P 500 fall into 11 different sectors -- communication services, consumer discretionary, consumer staples, energy, financials, health care, industrials, information technology, materials, real estate and utilities. The sectors help investors identify companies with similar businesses and guide the creation of funds that invest in groups of companies. If you're an investor looking to build a diversified portfolio, it's not a bad strategy to select the best players across the market. Here's a look at a top stock pick within each of the 11 different sectors.

Communication Services: The Walt Disney Co. (ticker: DIS)

Although the pandemic has pressured several of Disney's segments as sporting events have been canceled, theme parks closed and movies delayed, Will Reese, director of equity research with UMB Bank, says he expects the company to generate positive cash flow for the year. Disney has decided to forgo its dividend payments, but Reese says that isn't because of financial necessity. Rather, it's a good-faith move because the company has had to furlough so many employees. As sports return on a limited basis, Reese expects ESPN to be the Disney asset to recover the quickest, while its theme park business might return to normal sometime in 2022, after a vaccine has been widely distributed. Until then, the company's Disney+ streaming service is quickly gaining subscribers -- reaching nearly 74 million as of its latest quarterly report.

Consumer Discretionary: Starbucks Corp. (SBUX)

Starbucks is another notable company that stands to benefit from the widespread distribution of a vaccine. In the meantime, the iconic coffee chain has some factors playing in its favor. The company's strong drive-through presence and digital platform supportive of carryout orders are helping offset some of the challenges created by the pandemic, Reese says. Once things return to normal, whatever "normal" looks like, he adds that the company's track record of new-store and same-store sales growth could help lead to double-digit earnings growth -- which means bullish investors should consider buying up shares before that happens.

Consumer Staples: Walmart (WMT)

The megaretailer has hired more than 500,000 new employees in 2020 and plans to hire more than 20,000 seasonal workers at e-commerce fulfillment centers. According to Reese, the company's aggressive hiring plan is "a fantastic indicator of future sales." Of course, with Walmart, the elephant in the room when it comes to competition is Amazon.com (AMZN). Reese says Walmart is "extremely well-positioned to offer both digital and physical sales offerings that can compete against Amazon." Walmart's investments in store pickup and delivery have served it well during the pandemic and may continue doing so after the pandemic passes if people continue some of their lockdown shopping habits.

Energy: Chevron Corp. (CVX)

The energy sector has been one of the clearest beneficiaries of recent stock market enthusiasm about a vaccine. The thinking is that a return to normalcy for travel and the transportation of goods will boost demand for oil as well as the shares of companies that produce it. Chevron has been in cost-cutting mode, but the company has maintained a dividend and currently yields 6%. Chevron completed an acquisition of Noble Energy in October, paying a premium for Noble's shares compared with their pandemic sell-off low but marking a steep discount to where they were trading last year. For investors, it can be seen as a mark of relative strength that a company can be an acquirer during an industry downturn, instead of getting bought itself.

Financials: Morgan Stanley (MS)

When Morgan Stanley reported its quarterly results last month, it didn't just surprise to the upside on its top and bottom lines. The multinational investment bank and financial services company also surpassed analyst expectations for revenue for its wealth management business. At more than $4.6 billion in sales, that division accounted for nearly 40% of the company's total revenue, while investment management accounted for roughly 9%. Revenue and earnings from those two businesses are more stable than those in the volatile investment banking business, and "continued growth in wealth and investment management should lead to a higher valuation multiple," Reese says. Still, don't write off investment banking for Morgan Stanley. During the pandemic, those operations have been "extremely resilient," he says, as firms come to the capital markets to shore up balance sheets weakened during the economic downturn.

Health Care: AbbVie (ABBV)

This biopharmaceutical company may be best known for its drug Humira that treats conditions including arthritis, but in the investing community, the company is also known for its impressive history of raising its dividend. From its inception in 2013 through its latest dividend announcement in September, the company has increased its dividend by 195%, according to the company. Its recent yield of around 5% makes it much more attractive than Treasurys for yield-seeking investors. In addition to returning money to shareholders in the form of a regularly increasing dividend, Greg Bassuk, CEO of AXS Investments, also points to AbbVie's push toward environmental targets. Environmental, social and corporate governance (ESG) issues have become more important to investors in recent years. Despite competition for Humira, he says AbbVie has a low relative valuation, which positions it well for a strong remainder of this year and a "rewarding" 2021.

Industrials: Rockwell Automation (ROK)

This company, which focuses on industrial automation, is well-positioned to benefit from the increase in American companies looking to repatriate manufacturing from abroad after the supply chain disruptions during the U.S.-China trade war and pandemic lockdowns. That's according to Jay Jacobs, head of research and strategy at Global X ETFs, who says that Rockwell can help firms that have to be cost-conscious when returning manufacturing to the U.S. because of the higher cost of domestic labor. "Rockwell Automation is a leader in smart manufacturing, developing intelligent software and machines that can automate sophisticated manufacturing processes to reduce costs, improve flexibility and meet stringent quality standards," Jacobs says.

Information Technology: Broadcom (AVGO)

According to JoAnne Feeney, portfolio manager with Advisors Capital Management, providers of components for expanding data centers, 5G networks and the internet of things should do well in 2021. Broadcom's sales of components for high-end smartphones are getting a boost from the rollout of 5G phones, and the company is also well-positioned to benefit from growth in data centers and 5G infrastructure, in addition to 5G consumer devices, she says. The company was recently yielding 3.4%, and according to Feeney, Broadcom has been attractively priced based on a recent forward price-to-earnings ratio of 14.6.

Materials: Ecolab (ECL)

While this global leader in the cleaning and sanitation industry has seen strong demand for sanitizing products during the pandemic, those have been more than offset by reduced restaurant, lodging and entertainment facility demand for other products. Although year-over-year revenue and earnings have declined, the company's most recent quarter showed sequential quarterly improvement from the pandemic-related lows in the second quarter. "We expect the improvement to continue in our fourth quarter, though likely at a slower rate as the second COVID-19 wave impacts reopenings," CEO Douglas Baker said in a recent press release. Reese likes the high level of recurring revenue and solid pricing power provided by Ecolab's business model. "This leads to earnings visibility in Ecolab's core business, which is rare in the materials sector," he says.

Real Estate: Duke Realty Corp. (DRE)

This real estate investment trust, or REIT, boasts approximately 159 million rentable square feet of industrial assets in 20 major U.S. logistics markets. All that space comes in handy when companies need warehouse space where they can collect and ship orders that customers place online. "Growth in e-commerce commands additional industrial warehouse facilities, which stands to benefit Duke Realty," Reese says. Although the stock was recently trading at a slight premium based on funds from operations, Reese says buying the stock still makes sense. "We think this premium is warranted given the defensive nature of the business model and the secular e-commerce growth drivers," Reese says.

Utilities: NextEra Energy (NEE)

Last month, this solar- and wind-focused utility made headlines as its market capitalization surpassed that of oil and gas giant Exxon Mobil Corp. (XOM). Although Exxon has since retaken the lead over NextEra, it was nonetheless a remarkable milestone as oil prices -- and the shares of oil producers -- tanked during the pandemic and interest in renewable energy has been on the rise. NextEra scores high marks among ESG investors, especially when compared with other utilities. That's one reason Bassuk is bullish on the stock for the rest of this year and next year. "The winners in the 'new normal' market environment going forward will be companies that not only are ESG-friendly but also have highly sustainable business models," he says. "NextEra is emblematic of this dynamic." Bassuk adds that NextEra is poised to benefit under President-elect Joe Biden's administration with renewed emphasis on renewable energy.

The top stock picks to buy from 11 sectors:

-- Communication Services: The Walt Disney Co. (DIS)

-- Consumer Discretionary: Starbucks Corp. (SBUX)

-- Consumer Staples: Walmart (WMT)

-- Energy: Chevron Corp. (CVX)

-- Financials: Morgan Stanley (MS)

-- Health Care: AbbVie (ABBV)

-- Industrials: Rockwell Automation (ROK)

-- Information Technology: Broadcom (AVGO)

-- Materials: Ecolab (ECL)

-- Real Estate: Duke Realty Corp. (DRE)

-- Utilities: NextEra Energy (NEE)

Matt Whittaker began writing for U.S. News & World Report in 2015, covering investing topics. Based in Colorado, he also specializes in natural resources and outdoor industry journalism. Mr. Whittaker has reported on renewable energy, coal, oil, natural gas, metals and seafood companies from the Americas, Europe and Asia, and his work has appeared in The Wall Street Journal, Barron's, Pacific Standard, VICE Sports, Backpacker online and High Country News. He has been a fellow with the Knight Center for Specialized Journalism and is particularly proud of an Overseas Press Club Foundation scholarship he won for a series of articles on landmines in Bosnia and Herzegovina. Born in Knoxville, Tenn., Mr. Whittaker graduated with a degree in journalism from the University of Tennessee. You can follow him on Twitter and connect with him on LinkedIn.

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    China's holdings of US government debt have fallen to their lowest level since February 2017, following a fifth successive month of net US Treasury sales in September, according to a US government report.China sold US$6.22 million of US Treasury securities in September, lowering its total holdings to US$1.062 billion, according to the latest monthly Treasury International Capital (TIC) report from the US Department of the Treasury.Analysts cautioned that the reduction in China's US Treasury holdings was not necessarily a sign it was reducing its overall US dollar-denominated securities holdings, since it could buy other assets such as stocks or corporate bonds instead.Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.Nevertheless, while reducing its holdings of US debt, China has been on a buying spree of Japanese government bonds this year.According to data from the Japanese Ministry of Finance, China snapped up 27.7 billion yen (US$2.7 billion) worth of Japanese debt in September, resulting in 2.4 trillion yen of purchases over the first nine months in the year, up 73 per cent from the same period in 2019.China lost its status as the largest foreign holder of US Treasury securities to Japan more than a year ago, in the midst of a bitter trade war between the two superpowers that some speculate could descend into an all-out financial war.Ongoing discussions among Chinese academics have suggested that Beijing's ongoing rotation of its US$3.14 trillion foreign exchange reserves could point to further shedding of as much as 20 per cent of its remaining US Treasury holdings.This could be a move to insulate itself from tensions with Washington, including the risks of US financial sanctions and the potential seizure of Chinese assets in the US, according to ongoing discussions among Chinese academics.China will "gradually decrease its holdings of US debt to about US$800 billion under normal circumstances", Xi Junyang, a professor at the Shanghai University of Finance and Economics, was quoted as saying in September by the Global Times, which operates under the official People's Daily, the Chinese Communist Party mouthpiece.China does not publish the composition of its current foreign exchange reserves, nor a detailed account of how much US dollar-denominated assets it owns, as it considers the information to be a state secret.The latest available official data showed that the share of US dollar assets in China's foreign exchange reserves dropped to 58 per cent at the end of 2015 from 79 per cent in 1995.How the US uses the dollar payments system to impose sanctions on a global scaleGuan Tao, chief global economist at Bank of China Securities, said it would be inappropriate to interpret the reduction of foreign investors' holdings of US debt as a decline in the status of the US dollar.Foreign investors may reduce their investments in US government debt but increase the allocation of other US-based financial assets. And while the Chinese government may be a net seller of US dollar assets, the private sector may still be net purchasers, Guan said.In the face of a retreat in foreign purchases over the past decade, the appetite among home grown buyers - from US mutual funds and pension plans to the Federal Reserve - is crucial to the US$20.4 trillion market.Due to the large increase in US government spending to offset the economic damage caused by the coronavirus pandemic, Washington is on track to issue an unprecedented US$5 trillion in net new debt in 2020 to plug its exploding budget deficit.US president-elect Joe Biden has called on the US Congress to pass another US$2.4 trillion stimulus bill to shore up the economy in the face of the recent sharp increase in virus infections in the country, though new legislation is unlikely until early next year.The Treasury's record US$27 billion 20-year bond sale this week was greeted with soft demand that sent yields in secondary market trading higher.Meanwhile, global investors are reconfiguring their global portfolios to give Chinese securities a much greater role, with China set to be the only major economy to report positive economic growth for 2020.On Wednesday, China's Ministry of Finance's sale of 4 billion euro (US$4.74 billion) in euro-denominated sovereign bonds received an enthusiastic response, with strong participation coming from long-term investors in Europe and the US.A survey by HSBC Qianhai Securities showed 62 per cent of top international institutional investors and large corporations plan to increase their China portfolio allocations, by an average of 24.5 per cent in the next 12 months."The international appetite for access to Chinese financial markets is at an all-time high," said Justin Chan, head of Greater China, global markets at HSBC. "A steady stream of developments, from index inclusion to the Stock and Bond Connect schemes is opening this market like never before, and yield hungry investors from across the world are piling in."This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

  • The 3 Hottest Electric Vehicle Stocks Of The Year

    Many Electric vehicle stocks have had a spectacular year, and as the world progresses towards a greener economy, it’s clear this sector is only getting started

  • Snap could be worth $200 billion in 5 years, analyst says

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  • 7 High-Yield Dividend Value Stocks to Buy

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  • Shift Into 5G Could Fuel a Rally in These 3 Stocks

    The tech world is in the midst of a shake-up. Since the end of 2017, the new 5G wireless technology has been moving forward, bringing with it a combination of faster connection speeds and lower latency, and the promise of great changes in how we connect to the online world. New technologies – connected automobiles and agile IoT come to mind – would not be possible without 5G.Investment research firm HSBC Global, in a recent report on the advent of 5G tech, takes up the questions of whether the new networking is a boom or a bust. Specifically, HSBC asks why 5G has been underwhelming – so far. Industry expert Professor William Webb notes that 5G’s rollout has not lived up to the hype, even in Asia where networks are more extensive and better integrated. He describes the technology as ‘evolutionary, not revolutionary.’Webb points out several areas where 5G clearly needs further evolution: the expansion of networks, which will necessitate further buildouts of towers and cells; smoother transitions between cells; and improved functionality, once devices are connected. In his view, 5G is a beginning rather than an end.Commenting on Webb’s views, and on the technology generally, HSBC's Head of Telecoms Neale Anderson, writes, “[We] see it as unfortunate (although sadly inevitable) that 5G was rushed to market... The bar will further be raised by mmWave services, which have been launched in the US, and recently in Asia in Japan. We see this as the ‘real’ 5G, and expect it to open up – albeit slowly – new opportunities for operators.”Whether 5G underwhelms or overwhelms in the short term, in the longer term it is here to stay – and that means some stocks are going to gain as 5G expands. Wall Street’s analysts have been busy finding those stocks, and the TipRanks database has the scoop. Here are three of them.Inseego Corporation (INSG)First up, Inseego, is a wireless and mobile hotspot company. As can be imagined, the company has gained directly from the moves toward increased remote work and virtual offices. The stock is up 27% this year, even after accounting for high volatility in April and August.Inseego has a direct concern in 5G. As a wireless provider, the company cannot afford to ignore the new tech, and is directly involved in developing and marketing home-use 5G routers. Inseego has an ongoing partnership with Verizon on networking and hardware, and is also working to expand its hotspots to IoT uses. The company has not ignored the innards of the devices, and works with Qualcomm on advanced 5G router chips.Like many networking providers, Inseego has performed at the financial level. Quarterly revenues have posted sequential gains through 2020, with Q3 exceeding $90 million at the top line. Q3 EPS showed a loss of 6 cents; the loss was considered normal, as Inseego, again like many other tech firms, typically shows a net loss per share. The important point to the EPS was, it was the smallest such loss in two years.Analyst Lance Vitanza, in his coverage of the stock for Cowen, writes, “While the company continues to see significant demand for legacy 4G products, its second-generation 5G product suite continues to ramp… Inseego is positioned to profit from the advent of 5G, technology that is estimated to generate $500 billion in GDP in the U.S. and which will give way to more traditional upgrades of existing mobile hot spots from 4G to 5G.”In line with these comments, the analyst puts an Outperform (i.e. Buy) rating on the stock. His price target, at $13.50, indicates room for 44% growth in 2021. (To watch Vitanza’s track record, click here)Overall, Inseego holds a Moderate Buy rating from the analyst consensus, based on 6 reviews breaking down to 4 Buys and 2 Holds. Meanwhile, the average price target, $13.17, suggests it has 41% upside potential in the year ahead. (See INSG stock analysis on TipRanks)Amdocs Limited (DOX)Software company Amdocs has built a strong reputation in the communications and media niche, while remaining under the radar compared to its competitors. In recent months, Amdocs has expanded its operations into 5G through the acquisition of Openet, a provider of telecom services for network commercialization and analytics. Openet bills itself as ‘built for 5G,’ and this acquisition, valued at $180 million, will bring Amdocs directing into the 5G network.In the meantime, a look at Amdocs’ recent performance shows that the company holds a sound position in the software universe. The company’s revenues barely blinked through the corona crisis, remaining in the range of $1.03 to $1.05 billion for the past four quarters. Earnings did even better; the $1.17 EPS recorded in 3Q20 is the company’s highest in over two years.Despite the solid financial performance, Amdocs shares have still not fully recovered from the mid-winter market crash. The stock is down 10% year-to-date, JPM analyst Jackson Ader believes that this stock’s relatively low price presents a clear opportunity for investors. “As 5G adoption begins to pick up and North American revenue stabilizes we think it is time to step in to this value name that has significantly lagged our coverage and the market this year… we believe 5G tailwinds, improving cash flow conversion and a potential value rotation warrant an upgrade to Overweight,” Ader noted. Along with that upgrade to Overweight (i.e. Buy), Ader sets a one-year price target of $75, suggesting a 17% upside for the stock. (To watch Ader’s track record, click here)Overall, with 3 recent Buys and 1 Hold, Amdocs gets a Strong Buy rating from the analyst consensus. The stock is selling for $63.97 and the average price target is $76, slightly more bullish than Ader’s and implying an upside of ~19%. (See Amdocs stock analysis on TipRanks)Tower Semiconductor (TSEM)Last but not least is Tower Semiconductor, a fabrication company in the chip industry. Fabs are a vital link in the semiconductor business, as many of the big chip designers don’t actually manufacture their own products – they do the design, make the prototypes, and outsource the serial production. Tower is one of the serial producers, making chips for major names among the big semiconductor companies, including Broadcom, Intel, and Samsung.Tower is heavily invested in 5G, producing a range of chips for 5G enabled devices, including everything from handsets to data centers. As 5G networks expand, and as end users begin the process of switching to enabled devices, Tower is well-positioned to gain. No matter which big chip companies get the lion’s share of the new business, Tower will be there – it runs the fabrication plants. It’s an enviable niche at a time when the market is starting to change at an accelerating rate.The combination of a firm foundation and good prospects can be seen in the revenues and earnings outlook. At the top line, income has been stable through this pandemic year, while at the bottom line, EPS is projected to start swinging back up in Q4 of this year.Needham analyst Rajvindra Gill is upbeat about Tower’s forward path. He rates the stock a Buy along with a $30 price target, suggesting a 30% upside on the one-year horizon. (To watch Gill’s track record, click here)Backing his stance, Gill writes, “We expect robust growth in '21 given our expectations of the 5G smartphone market doubling and RF content increases of 40-60%... We view [TSEM] as our top small-cap 5G play, as we believe it is particularly well-positioned to benefit from the 5G cycle (both on smartphone & infrastructure side)."All in all, Tower’s Strong Buy analyst consensus rating is unanimous, supported by 3 recent Buy reviews. The stock has an average price target of $27.67, which implies a 20% upside from the current share price of $23.08. (See TSEM stock analysis on TipRanks)To find good ideas for 5G stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

  • Wall Street Bullish On Nio Despite Recent Pullback: 'A Must-Own Growth Stock'

    Despite near-term weakness in Nio Inc - ADR (NYSE: NIO) shares following Citron Research's bearish call on the stock, Wall Street is showing confidence in the Chinese electric vehicle manufacturer. The Nio Analysts: Deutsche Bank Securities analyst Edison Yu reiterated a Buy rating on Nio and increased the price target from $34 to $50.BofA Securities analyst Ming Hsun Lee reiterated a Buy rating and hiked the price target from $23 to $54.70.JPMorgan analyst Nick Lai maintained an Overweight rating and lifted the price target from $46 to $50.Credit Suisse maintained an Outperform rating and raised the price target from $25 to $60.Deutsche Bank Sees A Major Winner In Chinese EV Market: Nio's third-quarter results could be termed mixed, as it reported in-line revenues but a lower-than-expected gross margin due to the timing of regulatory credits, Deutsche Bank's Yu said in a note.The fourth-quarter delivery and sales outlook was materially ahead of the consensus estimates, the analyst said. Supply constraints have become less of an issue, with the company ramping capacity to achieve production of 7,500 units by January, he said.Despite the volatility and potential corrections depending on EV sentiment and fund flows, Nio is on track to take share from traditional internal combustion manufacturers thanks to its aspirational brand status and innovative and nimble business model, Yu said.This will help the company emerge a major winner in the Chinese auto market by the middle of the decade, the analyst said. "This sets up NIO to be a must-own stock for growth-oriented and ESG investors, in our view." In the near-term, Deutsche Bank said it continues to expect robust monthly delivery volume until the Chinese New Year, driven by the newly launched EC6 SUV coupe, 100-kWh battery pack option and growing battery-as-a-service adoption.The firm raised its fourth-quarter and 2021 forecasts across the board, reflecting higher sales volume and associated operating leverage, and also to account for higher contributions from regulatory credits.Related Link: 7 Takeaways From Nio's Q3 Earnings Call Nio To Turn Profitable By 2023, BofA Says: Nio will turn profitable in 2023, a year earlier than BofA had previously estimated, Hsun Lee said in a note. The analyst raised his 2021 through 2023 sales volume forecast above consensus estimates, attributing the elevated expectations to a more positive view on Nio's strategies; a potential overseas contribution starting in 2022; and cooperation with Mobileye on robotaxis in China.View more earnings on NIOBofA also narrowed its net loss forecast for 2020 through 2021."As such, we believe NIO's share in China EV market will rise from 2% in 2019 to 9% in 2022," the analyst said. JPMorgan On Nio's Competition: Nio's fast-growing ecosystem -- with a charging network, online customer community, value-added service and sticky customers -- will ultimately benefit Nio's business opportunities, JPMorgan analyst Lai said.The analyst noted that about 40% new buyers are referrals from existing users. Nio's sales volume and how it tackles competition in premium segments will be crucial, he said. Based on the model pipeline from premium OEMs, the analyst said Nio could face competition from Tesla Inc's (NASDAQ: TSLA) Model Y, the price of which will likely to drop from 480,000 yuan ($72,888) to 350,000-400,000 yuan ($53,147-$60,740) and German brands that may not have volume models anytime soon, he said. "Meanwhile, the EV addressable market is growing rapidly, hence we expect to see a 'rising tides lift all boats' rather than 'winners take all' phenomena." Credit Suisse Dissects Nio's Margin Trajectory: The key surprise in the third-quarter print is the higher-than-expected ES8 high-margin SUV contribution, according to Credit Suisse, which added that the vehicle's volume share rose seven points to 29%. Some of the margin improvement came from falling component sourcing costs, including batteries, the sell-side firm said. The company guided to further vehicle margin expansion in the fourth quarter thanks to the removal of the previous battery financing interest rate subsidy and a falling per-unit fixed cost from operating leverage, according to the Credit Suisse note. The company also expects 120 million yuan ($18 million) income from sales of its 2019 NEV credit, which is to be booked in the fourth quarter, the sell-side firm said. Nio's key catalyst is the new sedan to be showcased on Nio Day Jan. 9, according to Credit Suisse. NIO Price Action: At last check, Nio shares were rising 1% to $45.51.Related Link: Nio's 4th Annual 'Nio Day' Coming In January: What Investors Need To Know Photo courtesy of Nio. Latest Ratings for NIO DateFirmActionFromTo Nov 2020Deutsche BankMaintainsBuy Nov 2020B of A SecuritiesMaintainsBuy Oct 2020JP MorganUpgradesNeutralOverweight View More Analyst Ratings for NIO View the Latest Analyst RatingsSee more from Benzinga * Click here for options trades from Benzinga * 7 Takeaways From Nio's Q3 Earnings Call * Nio's Q3 Results, Guidance Trump Estimates Amid Strong Sales Momentum(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Gold Stocks And Gold Price Outlook: The Contrarian Good News For Gold

    Does buying gold stocks, or betting on the gold price, make sense, despite vaccine progress and 2020 election results? Here are some things to consider.

  • Are Boeing, Delta And Exxon 'Zombie Companies' Or Value Stocks?

    The economic downturn and subsequent government stimulus measures in 2020 has led some analysts and traders to use the phrase "zombie companies" to describe companies that would not be surviving without financial support from the government.On Thursday, DataTrek Research co-founder Nicholas Colas defined zombie companies and drew distinctions between true zombies and value stocks that could make for excellent economic recovery plays.What Is A Zombie Company? Colas said a zombie company is a business that is not generating enough operating income to cover its interest expense. He said the phrase has risen in popularity this year due to concerns that the Federal Reserve has created an entire group of zombies due to its corporate bond buying stimulus program.According to a new Bank of International Settlements paper, the number of zombie companies has been steadily rising since the late 1990s, but Colas said one investor's zombie is another investor's cyclical value stock. Precious metals and oil and gas stocks are two examples of groups that include many companies that haven't been profitable since the commodity price bust of 2015 and 2016.However, Colas isn't sure all of these companies are necessarily permanently impaired.In addition to commodity stocks, cyclical consumer stocks, pharmaceutical stocks and other groups also have zombification rated above 10%.Related Link: Here's How Much Investing ,000 In Boeing On The Day The 737 Max Debuted Would Be Worth TodayValue Stock Or Value Trap? Colas said the zombie analysis can be useful, but it seems to be overused in the 2020 climate, particularly when it comes to unprofitable stocks like Exxon Mobil Corporation (NYSE: XOM), Boeing Co (NYSE: BA) and Delta Air Lines, Inc. (NYSE: DAL)."Companies like Exxon, Boeing, and Delta are being labeled zombies because they are currently unprofitable and have taken on considerable fresh debt to weather downturns in their businesses," Colas said. "At the same time, all 3 are expected to return to profitability or at least break even in 2021 and all are off their 2020 stock price lows."Colas said all three companies will likely have plenty of opportunities to pay down their debt loads by issuing fresh equity once their businesses return to profitability.Benzinga's Take: As Colas said, identifying a true zombie stock can be useful in that it's unlikely to make for a good long-term investment. However, the unprecedented 2020 economic disruption has made plenty of value stocks appear to be zombies, and some of these stocks will eventually come back to life once a coronavirus vaccine is widely available.See more from Benzinga * Click here for options trades from Benzinga * Why BofA Is Upgrading Cohen & Steers, Downgrading T. Rowe Price * Tesla's Valuation Is Greater Than Nearly The Entire Established Auto Industry(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • GM Gets More Aggressive On Electric Transformation Plans; Mum On Nikola Talks

    General Motors announced more aggressive plans to pivot toward electric cars as it accelerates efforts to challenge Tesla.

  • Has the Clock Struck Midnight for This Cinderella Coronavirus Stock?

    Good things come to those who wait but might they have come too late for coronavirus vaccine maker Inovio Pharmaceuticals (INO)?Inovio has finally been granted approval from the FDA to proceed with the Phase 2 portion of the Phase 2/3 trial for its COVID-19 DNA vaccine candidate INO-4800. To recap: Inovio was about to initiate the study in September only to be stopped in its tracks by the FDA. The regulatory body said it required additional information on INO-4800 and the company’s CELLECTRA 2000 delivery device before allowing the study to go ahead.The FDA hasn’t signed off on the Phase 3 portion yet and will only do so once Inovio answers the FDA’s questions regarding the Cellectra 2000 device. The device is meant be used for the delivery of INO-4800 into the skin. Inovio expects to address the issues during the Phase 2 trial.The U.S. trial will include 400 patients and is funded by the U.S. Department of Defense (DoD).Even before the recent announcements from Pfizer/BioNTech and Moderna’s positive interim data for their respective Covid-19 vaccine candidates, Inovio was far behind its competitors’ programs’ development. Nevertheless, H.C. Wainwright analyst Ram Selvaraju points out the “duration of their efficacy and their long-term safety profiles remain to be seen.” Additionally, the 5-star analyst reminds investors of INO-4800’s unique properties.“INO-4800's key differentiators include its excellent thermostability profile (stable at room temperature for more than a year), making it possible to manufacture at scale and transport without frozen cold chain requirements,” Selvaraju said. “In contrast, the mRNA-based vaccines need to be stored at extremely low temperatures—Pfizer and BioNTech's candidate, for example, requires storage at -94ºF (-70ºC)—and therefore could be challenging to distribute and deploy on a broad basis.”Selvaraju anticipates Inovio will announce the trial’s data in 2H21, but for now sticks to a Neutral (i.e. Hold) rating. Due to “market valuation and volatility,” the analyst has no fixed price target. (To watch Selvaraju’s track record, click here)Overall, the rest of the Street is on the same page. Based on 2 Buys, 5 holds and 1 Sell, the stock has a Hold consensus rating. Given the $13.71 average price target, the analysts expect shares to gain 24% over the next 12 months. (See Inovio stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

  • Jim Cramer On Nvidia: So Much Demand They Can't Make Enough Chips

    CNBC's Jim Cramer shared his thoughts on Nvidia Corporation (NASDAQ: NVDA) after the company reported third-quarter earnings.Cramer on Nvidia: Cramer talked about Nvidia missing on some numbers in the quarter, but said the company couldn't keep up."So much demand they can't make them [chips]," Cramer said. He called that a "high-quality problem" to have.Cramer said Nvidia makes chips for the automobile industry and gaming industry. Nvidia also has large customers like Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) unit Google, Amazon.com (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT)."They all look to Jensen," Cramer said, referring to Nvidia CEO Jensen Huang.View more earnings on NVDACramer said if Nividia opens down "you can still buy it."Related Link: Mike Khouw Sees Unusual Options Activity In NvidiaNvidia Earnings: Nvidia reported third-quarter earnings of $2.91 per share, which beat the consensus estimate of $2.57. The company reported third-quarter revenue of $4.73 billion, which beat the consensus estimate of $4.41 billion."If [Huang] had all the chips, no idea what number they would've hit," Cramer said.NVDA Price Action: Nvidia shares are down 1.9% to $526.80 in early Thursday trading.See more from Benzinga * Click here for options trades from Benzinga * Why Corsair Could Be The Best Way To Play Booming Gaming Market * Democratic DEMZ ETF Launches On Election Day: What Investors Should Know(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • How Bank Of America Has Become One Of Warren Buffett's Best Investments

    Wall Street legend Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK-A)(NYSE: BRK-B) filed its 13F form this week, revealing that Buffett has continued to reduce his exposure to a number of large U.S. banks.The lone exception to Buffett's bank selling in the third quarter was Bank of America Corp (NYSE: BAC), which Buffett was buying.Bank of America is Berkshire's second-largest holding, and the stock's 14.1% gain in the last month has made it one of Berkshire's top performers.Roughly nine years ago when Buffett first invested in Bank of America, the company was in hot water.Bank Of America's Buffett Bailout: Bank of America and other big U.S. banks were at the epicenter of the financial crisis back in 2008 and 2009.Among the banks that survived the crisis, Bank of America was one of the hardest hit. In fact, Bank of America shares dropped as low as $2.53 in early 2009 as investors questioned whether the company could avoid bankruptcy or total nationalization.Fortunately for them, by the end of 2009 Bank of America had announced it would repay the $45 billion in bailout money it received from the U.S. government in its entirety. The stock started the 2010s back above $15.However, the Eurozone debt crisis in 2011 sent shares tumbling back down to as low as $5.13.Related Link: Here's How Much Investing ,000 In Bank Of America At Great Recession Lows Would Be Worth TodayAt the time, Bank of America CEO Brian Moynihan insisted the bank had plenty of capital and didn't need an infusion from Buffett. He convinced Moynihan that a deal with Berkshire would stabilize the bank's stock price, boost investor sentiment and also pad the bank's cash position during a difficult period.Buffett ended up investing $5 billion in preferred Bank of America stock redeemable at a 5% premium and paying a 5% annual dividend. In addition, Buffett received warrants to buy 700 million shares of Bank of America common stock at a price of $7.14 anytime within the next 10 years.Right off the bat, Buffett was earning $300 million per year in dividends from his preferred shares. He waited until 2017 to exercise the warrants to buy shares of common stock at the $7.14 price. By the end of 2017, those shares were worth $20 billion, three times the size of his initial investment.At the time of the Buffett bailout, Bank of America shares were trading at around $7.65. By late 2012, Bank of America was trading back above $10. After a volatile decade of trading, Bank of America hit its post-Great Recession high of $35.72 in December 2019.BofA In 2020, Beyond: Bank of America shares dropped to $17.95 in March during the coronavirus sell-off, but have since recovered to above $27.Buffett has made a fortune on his initial investment, but he's still buying the stock. In the third quarter alone, Buffett added 85 million shares to his stake, which is now valued at about $24.3 billion.Bank of America investors who bought the day of the Buffett investment back in 2011 didn't get the same sweet deal Buffett got, but they've still done pretty well over the years.In fact, $1,000 worth of Bank of America stock bought on the day of the Buffett investment in 2011 would be worth about $4,081 today, assuming reinvested dividends.Looking ahead, analysts are expecting minimal gains for Bank of America in the next 12 months. The average price target among the 24 analysts who cover the stock is $28, suggesting 1.4% upside.Photo by Tony Webster via Wikimedia. See more from Benzinga * Click here for options trades from Benzinga * Q3 13F Roundup: How Buffett, Einhorn, Ackman And Others Adjusted Their Portfolios(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Exclusive: EU could pay over $10 billion for Pfizer and CureVac vaccines - source

    The European Union could pay more than $10 billion to secure hundreds of millions of doses of the vaccine candidates being developed by Pfizer-BioNTech and CureVac, an EU official involved in the talks told Reuters. The bloc has agreed to pay 15.50 euros ($18.34) per dose for the COVID-19 vaccine candidate being developed by Pfizer and BioNTech, according to the official. The pricing information, previously undisclosed, confirms the EU is paying less per dose than the United States for an initial supply of that vaccine, as reported by Reuters last week.

  • Is This The Best Way To Play The Second Boom In Marijuana?

    Hopes of nationwide legalization have triggered another rally in cannabis shares, and this time it’s all about big data, science and boosting market share