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Top Stock Picks Under $10 to Watch in April

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Editorial Staff
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These selections might initially raise eyebrows, given their low price point, which often signals caution among investors. However, beneath the surface, I believe these companies harbor the potential to rise as future market leaders. Their promising growth prospects have not only caught my eye but have also garnered nods of approval from some analysts, who see a bright future for these firms from an investment standpoint.

My approach to selecting these stocks was thorough, focusing not just on their current valuations but also on their financial health and the caliber of their management teams—key indicators of their ability to navigate challenges and drive growth.

Investing in these stocks is not without its risks, given their speculative nature and the inherent market skepticism. Yet, for those willing to weather the volatility, these under-$10 stocks could significantly enhance your portfolio’s value.

So, let’s explore three of these stocks that stand out as particularly promising.

Tellurian (NYSEARCA:TELL) – A High-Risk, High-Reward Play in the Natural Gas Sector

Tellurian Inc., trading under the ticker TELL, is making waves in the natural gas industry with its ambitious endeavors in upstream production, liquefaction, and the global sale of liquefied natural gas (LNG). At the heart of Tellurian’s growth strategy lies its Driftwood project, a venture poised to potentially transform the company’s financial landscape by generating significant annual cash flow, thereby substantially impacting its market valuation.

With a current stock price hovering around 50 cents and a market capitalization of approximately $390.76 million, TELL stands out as one of the most affordable entries on our watchlist. This valuation places it in a unique position for investors willing to embrace the inherent risks for the promise of substantial returns, especially if the Driftwood project successfully reaches operational status and lives up to its potential.

Moreover, Tellurian’s price-to-sales ratio, sitting at 1.5x, underscores its attractiveness compared to peers, offering a more cost-effective entry point on a per-share basis. This metric suggests that TELL is not just a bargain but a calculated gamble on the future of natural gas and LNG markets.

Investing in TELL is not for the faint-hearted, given its speculative nature and the volatility associated with the energy sector. However, for those looking to diversify their portfolio with a potentially undervalued stock that could emerge as a significant player in the natural gas industry, Tellurian presents an intriguing opportunity. The success of the Driftwood project could indeed unlock remarkable value for investors, making TELL a stock worth watching closely in the under-$10 category.

Nokia (NYSE:NOK) – Pioneering the 5G Revolution with a Promising Outlook

Nokia, once synonymous with mobile phones that defined a generation, has successfully transitioned into a key player in the telecommunications, IT, and industrial sectors. Its current focus on developing and deploying cutting-edge 5G networks marks a significant pivot from its legacy as a mobile phone giant. Trading under the ticker NOK, the company is now at the forefront of the 5G revolution, leveraging its expertise to drive innovation and connectivity across the globe.

Looking ahead, Nokia has set its sights on a strong recovery by 2024, fueled by strategic expansions and technological advancements. The company is particularly optimistic about the role of AI in enhancing infrastructure networks and its growing footprint in India—a critical market for 5G deployment. Additionally, Nokia anticipates an increase in its market share across key segments, coupled with stable operating margins, signaling a robust growth trajectory.

Financially, Nokia is on solid ground, with forecasts indicating a comparable operating profit between €2.3 billion and €2.9 billion. The company’s efficiency is also reflected in its free cash flow conversion, expected to range from 30% to 60% of the comparable operating profit. This financial stability has not only allowed Nokia to propose an increased dividend of €0.13 per share but also to launch a new €600 million share buyback program, underscoring its commitment to delivering value to shareholders.

With a stock price under $10, NOK presents an attractive proposition for investors looking to tap into the burgeoning 5G market. The company’s strategic pivot, combined with its financial health and optimistic growth outlook, positions it as a compelling addition to any portfolio. As Nokia continues to innovate and expand its global presence, it remains a stock to watch for those betting on the future of telecommunications and digital connectivity.

B2Gold (NYSEARCA:BTG) – A Golden Opportunity in the Midst of Uncertainty

B2Gold Corp, trading under the ticker BTG, stands out as an intermediate gold producer with a global footprint. Despite its substantial $5 billion valuation, BTG‘s current trading price of around $2.90 categorizes it among penny stocks, offering a unique entry point for investors interested in the gold sector. This pricing reflects the market’s reaction to the company’s short-term production outlook, with anticipated gold production for 2024 projected to decrease to between 860,000 and 940,000 ounces, down from the 1,061,060 ounces produced in 2023.

However, the narrative surrounding BTG isn’t solely defined by its production forecasts. The stock has garnered a “Buy” rating from analysts, who see a significant upside potential of 45.32% in its share price over the next twelve months. Highlighting this optimism, Chris LaFemina from Jefferies has issued a “Strong Buy” rating and set a price target of $3.50, up from its current level. This bullish stance is supported by the expectation of a dramatic increase in the company’s earnings per share (EPS), with forecasts predicting an explosive growth of 2,627% to 27 cents this year.

Such optimistic projections amidst a backdrop of reduced production highlight the underlying strength and potential resilience of B2Gold. The company’s ability to navigate the volatile gold market, combined with its robust financial health and the anticipated EPS surge, positions BTG as an intriguing option for investors. For those looking to diversify their portfolios with a stock that offers both value and growth potential in the commodities sector, B2Gold presents a compelling case. As the gold market continues to evolve, BTG‘s journey will be one to watch closely, especially for investors seeking opportunities in undervalued stocks with strong upside potential.

Three Dividend-Paying Gold Stocks to Counter Fed Hawkishness

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Editorial Staff
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Gold has been making headlines lately. The spot price reached $2,364 per ounce Tuesday after hitting record highs for seven straight sessions and trading at $2,336 per ounce Monday. Year over year, gold is up 16.5%.

Investors who expect the Federal Reserve to cut its benchmark interest rate are the main force driving up prices, but the surge is boosted by other factors, including central banks — led by China — buying up gold to ease reliance on US dollars.

In this watchlist, we’ll highlight the top dividend-paying gold stocks that can provide investors with both capital appreciation and steady income…

Franco-Nevada Corp (FNV)

The precious-metals-focused Franco-Nevada owns a diversified portfolio of gold, silver, and platinum, along with their related royalty streams. The company does not operate mines, develop projects or conduct exploration. Instead, Franco-Nevada’s short-term financial performance is linked to the price of commodities and the production of its portfolio of assets. Mining royalty companies have large portfolios of mining companies as clients and therefore are typically less risky than owning one or two individual mining companies.

Franco-Nevada is a strong contender in the mining financing business. The company offers a unique way to gain exposure to precious metals and has a diversified portfolio of assets without the risks associated with owning individual mining companies. With an annual cash flow of over $500 million and a 1% dividend yield, Franco-Nevada is fundamentally strong and, according to the experts, has the potential for a 45% upside in the next 12 months.

Coeur Mining (NYSE:CDE)

Coeur Mining recently announced a private placement of flow-through shares aimed at advancing exploration at its Silvertip mine, signaling a proactive approach to expanding its silver production capabilities. This move, coupled with a reported year-end 2023 proven and probable reserves of 3.2 million ounces of gold and 243.9 million ounces of silver, underscores Coeur Mining’s robust asset base and growth potential.

Moreover, Coeur Mining’s strategic initiatives, including the expansion of its Rochester silver and gold operation in Nevada, highlight the company’s commitment to increasing production and improving operational efficiencies. These developments are particularly noteworthy as the demand for precious metals continues to rise amidst global economic uncertainties and inflationary pressures.

Despite facing challenges common in the mining sector, such as fluctuating metal prices and operational hurdles, Coeur Mining has demonstrated resilience and a capacity for strategic growth. The company’s focus on expanding its silver and gold production, improving cost structures, and advancing key projects positions it well for future success.

“We think that this is the time that Coeur Mining could outperform over the next few years because they’ll get to free cash flow, which will be a first right now and they can start potentially paying dividends,” said top hedge fund manager David Neuhauser .

Given these factors, Coeur Mining presents a compelling investment opportunity for those looking to diversify their portfolios with a U.S.-listed precious metals producer poised for growth. With its strategic investments in exploration and development, coupled with a favorable precious metals market, Coeur Mining is well-positioned to deliver value to its shareholders in the coming years.

Triple Flag Precious Metals Corp. (TFPM) 

Like Franco-Nevada, Toronto-based Triple Flag serves as a finance partner to facilitate the development and expansion of mining projects. With a focus on cash-generating mines and fully permitted projects that can produce cash flow within two years, the company seeks prudent investments in earlier stages of the mine life cycle to maintain exposure to development-stage assets and grow free cash flow per share over the long term. 

While risks include precious metal price volatility, competition from the royalty and streaming sector, and ramp-up issues at its mines, catalysts could include higher-than-expected gold and silver prices, future exploration discoveries, and unexpected mine expansions and acquisitions. TFPM investors enjoy a 1.3% dividend yield.  

Three Must-Have Uranium Stocks Amidst a High-Demand Market

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Editorial Staff
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The uranium market has witnessed a remarkable transformation, with spot prices catapulting from a low of $30 a pound in January 2021 to soaring heights of over $100 a pound. This surge, the highest in 16 years, signals a compelling opportunity for those looking to energize their portfolios with a dose of nuclear power.

The resurgence of uranium is underpinned by a confluence of global factors. As the world’s appetite for energy grows, the quest for sustainable and reliable sources has never been more critical. The sabotage of the Nord Stream 2 gas pipeline has thrust nuclear energy back into the spotlight, prompting nations to reconsider its value in their energy mix. Despite Germany’s move away from nuclear power, countries like Japan, France, and Norway are embracing it, with over 20 nations advocating for a tripling of nuclear capacity by 2050.

Central to this uranium renaissance is the announcement from Kazatomprom, the world’s largest uranium producer, that it will not meet its production goals for 2024 and 2025. This revelation has significant implications, given Kazakhstan’s dominant role in supplying over 40% of the world’s uranium, according to the World Nuclear Association. With Canada and Namibia trailing behind in production, and the United States leading in nuclear energy output, the stage is set for a strategic play in uranium stocks.

This backdrop of rising demand, coupled with supply constraints, presents a prime opportunity for investors. Uranium miners are responding with vigor, reigniting operations in dormant mines across Wyoming, Texas, Arizona, and Utah. As the sector positions itself for future growth, we spotlight three uranium miners that stand out as must-own stocks. Let’s dive into these picks and explore why they are pivotal for those looking to harness the potential of the uranium surge.

NexGen Energy (NYSE: NXE) – A Uranium Powerhouse in the Making

Diving into the heart of Canada’s uranium-rich Athabasca Basin, NexGen Energy stands out with its flagship Rook I project, poised to redefine the uranium market. This project isn’t just another dot on the map; it’s home to the Arrow development, a beacon of high-grade uranium mineralization that has recently become even more promising with the discovery of new, intense uranium zones. NexGen’s commitment to expanding its drilling operations in this area signals a clear strategy to unlock the vast potential lying beneath.

However, it’s crucial for investors to navigate this opportunity with eyes wide open. Currently, NexGen’s journey to revenue is on the horizon, not in the present. The company’s financial lifeline is its substantial cash reserve, bolstered to $290.7 million as of the end of December, thanks to strategic financings over the year. This financial maneuvering is a double-edged sword; while it secures the runway needed to bring Rook I to life, it also hints at potential dilution for current shareholders. Yet, the promise of Rook I’s future production capabilities offers a compelling narrative of growth and profitability that has already seen NXE stock doubling in value over the past year.

Investors eyeing NexGen Energy are not just investing in a company; they’re betting on a vision where the Rook I project emerges as a cornerstone of the global uranium supply. With the world increasingly turning to nuclear energy as a clean, reliable power source, NexGen’s strategic position in the Athabasca Basin could not be more critical. As the company advances its project towards production, the anticipation of tapping into one of Canada’s largest development-stage uranium resources offers a tantalizing prospect for those willing to journey with NexGen through its developmental phase.

Cameco (NYSE: CCJ) – A Titan in the Uranium Sector

Cameco shines as a leading figure in the uranium mining industry, with a robust portfolio that includes operations in Saskatchewan, Canada, the United States, and a significant partnership in Kazakhstan through a 40% stake in a joint venture with Kazatomprom. With over 35 years of experience in the field, Cameco’s strategic long-term supply contracts have carved out a significant niche for the company, showcasing its adeptness in navigating the complex uranium supply chain.

As we move through 2024, Cameco continues to set ambitious goals, aiming for a production target of 18 million pounds of uranium at its McArthur River/Key Lake and Cigar Lake projects. This effort is bolstered by Cameco’s strategic acquisition of a 49% interest in Westinghouse Electric in November of the previous year, in partnership with Brookfield Asset Management (NYSE: BAM). This venture positions Cameco to benefit from one of the world’s premier nuclear services businesses, with an expected contribution of between $445 million and $510 million in adjusted EBITDA for the year, and a projected compounded annual growth rate of 6% to 10%.

Despite experiencing a dip following its fourth-quarter earnings report, CCJ stock has demonstrated resilience with a 68% increase over the past year, reflecting the market’s confidence in Cameco’s strategic initiatives and growth trajectory. Trading at 25 times expected earnings and with a valuation that’s less than twice its long-term earnings growth rate, Cameco represents a compelling investment opportunity. With its strategic positioning, solid production outlook, and key role in the global uranium market, Cameco is poised to be a foundational asset for investors keen on tapping into the expanding nuclear energy sector.

Global X Uranium ETF (NYSE: URA) – Your Gateway to the Uranium Sector

For those looking to tap into the uranium market’s potential without the direct risks associated with individual mining companies, the Global X Uranium ETF presents an optimal solution. As the largest ETF of its kind, with $2.8 billion in assets under management, URA offers a diversified portfolio that spans the global uranium sector, encapsulating the essence of both mining operations and physical uranium holdings.

At the heart of URA’s portfolio is Cameco, accounting for 21.2% of its total assets, underscoring the ETF’s investment in industry leaders. Following closely is Sprotts Physical Uranium Trust, which contributes 9% to the portfolio. This inclusion is particularly noteworthy as Sprotts physically holds about 63.6 million pounds of uranium 3o8, valued at over $5.5 billion, offering investors a tangible stake in the uranium market.

URA’s diversified approach extends beyond these two giants, encompassing a range of companies like NexGen Energy, Uranium Energy, and Dennison Mines, among others. While the ETF has a significant Canadian miner representation, it also includes Australian miners, adding a geographical diversity to its portfolio. However, it’s important to note the inherent concentration within the uranium mining sector, given the limited number of players in the field. This makes URA an attractive option for investors seeking broad exposure to the uranium sector, coupled with the benefits of diversification within the confines of this niche market.

With shares of the ETF surging 48% over the past year, URA stands as a testament to the growing investor interest and confidence in the uranium sector’s prospects. This ETF not only offers a safer passage for investors looking to navigate the complexities of uranium mining but also ensures a diversified exposure to the sector’s potential upside. Whether you’re a seasoned investor or new to the commodities market, the Global X Uranium ETF offers a compelling blend of risk management and growth opportunity in the burgeoning field of nuclear energy.

Three Stocks You Absolutely Don’t Want to Own Right Now

By
Editorial Staff
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0

The right stocks can make you rich and change your life.

The wrong stocks, though… They can do a whole lot more than just “underperform.” If only! They can eviscerate your wealth, bleeding out your hard-won profits.

They’re pure portfolio poison.

Surprisingly, not many investors want to talk about this. You certainly don’t hear about the danger in the mainstream media – until it’s too late.

That’s not to suggest they’re obscure companies – some of the “toxic stocks” I’m going to name for you are in fact regularly in the headlines for other reasons, often in glowing terms.

I’m going to run down the list and give you the chance to learn the names of three companies I think everyone should own instead.

But first, if you own any or all of these “toxic stocks,” sell them today…

Electronic Arts (NASDAQ:EA) – Time to Hit the Pause Button

Electronic Arts, known for its blockbuster games and equally controversial monetization tactics, hasn’t been winning any high scores in the stock market game. Over the past five years, EA’s shares have only managed a modest 31% increase, with a disappointing 4% dip year-to-date.

Sporting a P/E ratio of 33 and a meager 0.59% dividend yield, EA’s approach to shareholder returns seems as conservative as its in-game economies. Despite the gaming industry’s potential for explosive growth, EA hasn’t raised its dividend in two years, a move that hardly inspires confidence.

The latest financials don’t offer much comfort either. With just a 3% year-over-year revenue increase in Q3 FY24, EA’s valuation is looking increasingly hard to justify. Although net income saw a 42% jump, such profit growth seems out of sync with its sluggish revenue uptick, signaling that this performance might not be sustainable.

For investors eyeing the gaming sector, it might be wise to look beyond Electronic Arts. The market is rich with other gaming companies that are not only innovating but also offering more attractive growth prospects. In short, it might be time to consider cashing out on EA and exploring more dynamic opportunities elsewhere in the gaming universe.

Xerox Holdings Corporation (NASDAQ:XRX) – Time to Let Go

Remember Xerox? The brand that became synonymous with photocopying? Well, times have changed, and so has Xerox. The company has branched out into managed services, IT, software, and automation. But don’t let the diversification fool you; Xerox is facing some tough challenges.

The company’s recent move to slash 15% of its workforce is a glaring red flag. It’s a sign that Xerox is scrambling to reorganize its core business and cut costs, hinting at deeper issues.

The financials paint a grim picture too. Xerox’s revenue dipped 9.1% year-over-year in the latest quarter, with a GAAP net loss of $58 million. Adjusted net income took a $90 million hit compared to last year, and adjusted operating margins shrank by 380 basis points. The company’s hopeful promise to achieve a “double-digit adjusted operating income margin by 2026” feels like a distant dream.

Analysts are giving Xerox a thumbs down, and it’s not hard to see why. With declining revenues, a challenging outlook, and a long wait for a potential turnaround, it might be wise to part ways with XRX sooner rather than later. In a market full of opportunities, holding onto Xerox could mean missing out on better investments.

Himax Technologies (NASDAQ:HIMX) – Falling Behind in the Semiconductor Race

In the bustling world of semiconductors, where generative AI is propelling many companies to new heights, Himax Technologies finds itself lagging. As a fabless semiconductor outfit, Himax specializes in display driver integrated circuits, crucial for the visual performance of TVs, tablets, and automotive displays. However, these products aren’t riding the same wave of demand benefiting AI-driven semiconductor tech.

The numbers tell a concerning story. Himax’s revenue for the fourth quarter dropped to $227.6 million from $262.2 million the previous year. Even more alarming, profits plummeted to $23.5 million, or 13 cents per share, a significant fall from $42.1 million and 24 cents per share year-over-year.

With HIMX stock down 11% in 2024, the writing’s on the wall. Despite the semiconductor sector’s overall bullish trend, Himax’s focus areas are not capturing the market’s current growth drivers. For investors holding HIMX, it might be time to reassess and consider reallocating to more promising opportunities within the tech sphere.

The Income Oasis: Stable Dividend Stocks for Market Sell-Offs

By
Editorial Staff
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0

In the wake of Tuesday’s market sell-off, investors are left pondering whether this downturn signals the onset of a more significant market correction. Amid such uncertainty, there’s a strategic approach to not only safeguard your portfolio but also to continue generating income during these turbulent times.

The recent dip saw the three major indexes each tumble by over 1%, a notable deviation from the robust first quarter that witnessed the S&P 500 reaching new record highs in nearly 40% of trading days, as highlighted by Bespoke Investment Group. This shift underscores the market’s sensitivity to economic indicators, which, while suggesting enduring economic strength, introduce a layer of unpredictability regarding future Federal Reserve actions on interest rates. According to Larry Tentarelli, founder of the Blue Chip Daily Trend Report, while a strong economy bodes well for stocks in the long haul, it can also lead to short-term market volatility due to the added uncertainty.

Given these dynamics, investors might consider turning to dividend-paying stocks as a defensive maneuver to mitigate portfolio risk while still securing a steady income stream. Our focus shifts to identifying stocks that not only weathered Tuesday’s downturn but also exhibit less volatility than the broader market—a beta of less than 0.9—and offer a dividend yield of over 1%. Additionally, we sought out stocks with an average Wall Street analyst price target suggesting an upside potential of 5% or more. This curated watchlist aims to spotlight defensive assets that promise both stability and income, making them worthy of consideration during sell-offs or periods of heightened market volatility.

Verizon Communications Inc. (NYSE: VZ) – A Strong Performer with Upside Potential

In the early months of 2024, Verizon has already made a notable mark, climbing more than 12% and outperforming the S&P 500. This surge reflects investor confidence and the company’s solid fundamentals, underscored by its strong finish in 2023. With wireless service revenue reaching $76.7 billion, up 3.2% from the previous year, and significant increases in both fixed wireless and total wireless postpaid net additions, Verizon’s strategic growth initiatives are paying off. The company’s operational strength, highlighted by a year-over-year surge in fixed wireless net additions of over 31% and a spike in total wireless postpaid net additions by 26%, showcases its ability to attract and retain customers effectively.

Despite facing a slight dip in total operating revenue for the full year and a consolidated net loss in Q4 2023 due to special items, Verizon’s financial health remains robust. The company reported a full-year cash flow from operations of $37.5 billion and a free cash flow of $18.7 billion, indicating strong operational efficiency and financial flexibility.

The outlook for 2024 remains positive, with Verizon projecting total wireless service revenue growth of 2.0% to 3.5% and an adjusted EPS range of $4.50 to $4.70. These forecasts, along with ongoing investments in network and service enhancements, position Verizon for continued growth.

Analysts are closely watching Verizon, with opinions divided between buy and hold ratings. However, the consensus points to further upside, with an average price target suggesting more than 5% growth potential. Additionally, Verizon’s attractive 6% dividend yield adds a layer of income generation for investors, making it an even more appealing option for those seeking both growth and income.

Given its strong performance thus far in 2024, solid fundamentals, and the potential for further gains backed by a healthy dividend, Verizon (VZ) stands out as a compelling investment. Investors are advised to consider adding Verizon to their watchlist or portfolio, especially those looking for a blend of growth, income, and resilience in the face of market volatility.

Sempra (NYSE: SRE) – Poised for Growth Amid Analyst Optimism

Despite a slight downturn of nearly 4% in its stock price so far this year, Sempra stands out in the utility sector with analysts forecasting a bright future. The consensus among experts suggests a potential upside of more than 15% over the next twelve months. With three-quarters of analysts surveyed by LSEG rating Sempra as a buy or strong buy, the company’s prospects look promising for investors seeking growth opportunities.

A pivotal development in 2023 was the announcement of a 20% increase in Sempra’s capital plan, now standing at $48 billion. This ambitious expansion underscores the company’s commitment to enhancing energy infrastructure across North America, with a particular focus on Sempra California and Sempra Texas. These regions are witnessing a surge in demand for safer, more reliable, and cleaner energy solutions. Furthermore, the company’s decision to raise its annualized common stock dividend for the 14th consecutive year highlights its dedication to shareholder value.

Looking forward, Sempra has narrowed its full-year 2024 EPS guidance to a range of $4.60 to $4.90 and set a full-year 2025 EPS target of $4.90 to $5.25. This forward-looking stance reaffirms the company’s anticipated long-term EPS growth rate of approximately 6% to 8%, reflecting confidence in its strategic direction and profitability.

Given the combination of Sempra’s solid financial achievements in 2023, its strategic capital investments, and the optimistic outlook shared by analysts, the company represents a compelling investment opportunity. Sempra’s focus on sustainable growth, backed by a robust dividend policy and significant capital expenditures, positions it as a key player in the evolving energy sector, poised for substantial growth. Investors are encouraged to consider Sempra for their portfolios, leveraging the anticipated upside potential and the company’s strategic initiatives aimed at long-term value creation.

Darden Restaurants (DRI) – A Pick with Appetizing Dividends

Darden Restaurants, the powerhouse behind some of your favorite dining spots, is serving up more than just delicious meals; it’s dishing out a 3.3% 12-month forward dividend yield that’s sure to catch the eye of dividend hunters. With the stock up 4.5% this year and a nearly 19% increase in 2023, Darden is proving to be a resilient player in the volatile restaurant industry.

Analysts give Darden an overweight rating, seeing a modest but solid 4% upside to the average price target. This optimism is not unfounded. The company is on the brink of revealing its fiscal third-quarter financial results next week, riding high on the back of fiscal second-quarter earnings that exceeded expectations. While revenue didn’t quite hit the mark last quarter, Darden’s decision to raise its full-year earnings guidance signals a confident outlook on its financial health and operational efficiency.

Let’s not forget the cherry on top: in June, Darden turned up the heat on its shareholder returns, increasing its dividend by 8% to $1.31 per share. This move is more than just a number adjustment; it’s a testament to Darden’s commitment to rewarding its investors and its belief in the company’s continued growth.

For those looking to spice up their investment portfolio with a stock that combines a robust dividend yield with potential for capital appreciation, Darden Restaurants offers a compelling blend of stability and growth prospects. As we await the latest earnings report, Darden stands out as a flavorful pick in the high-quality dividend stock menu.

Three Stocks You Absolutely Don’t Want to Own Right Now

By
Editorial Staff
-
0

The right stocks can make you rich and change your life.

The wrong stocks, though… They can do a whole lot more than just “underperform.” If only! They can eviscerate your wealth, bleeding out your hard-won profits.

They’re pure portfolio poison.

Surprisingly, not many investors want to talk about this. You certainly don’t hear about the danger in the mainstream media – until it’s too late.

That’s not to suggest they’re obscure companies – some of the “toxic stocks” I’m going to name for you are in fact regularly in the headlines for other reasons, often in glowing terms.

I’m going to run down the list and give you the chance to learn the names of three companies I think everyone should own instead.

But first, if you own any or all of these “toxic stocks,” sell them today…

Himax Technologies (NASDAQ:HIMX) – Falling Behind in the Semiconductor Race

In the bustling world of semiconductors, where generative AI is propelling many companies to new heights, Himax Technologies finds itself lagging. As a fabless semiconductor outfit, Himax specializes in display driver integrated circuits, crucial for the visual performance of TVs, tablets, and automotive displays. However, these products aren’t riding the same wave of demand benefiting AI-driven semiconductor tech.

The numbers tell a concerning story. Himax’s revenue for the fourth quarter dropped to $227.6 million from $262.2 million the previous year. Even more alarming, profits plummeted to $23.5 million, or 13 cents per share, a significant fall from $42.1 million and 24 cents per share year-over-year.

With HIMX stock down 11% in 2024, the writing’s on the wall. Despite the semiconductor sector’s overall bullish trend, Himax’s focus areas are not capturing the market’s current growth drivers. For investors holding HIMX, it might be time to reassess and consider reallocating to more promising opportunities within the tech sphere.

Chipotle Mexican Grill (NYSE:CMG) – Too Hot to Handle?

Chipotle’s stock has been on a fiery run, soaring over 75% in the past year, making it one of the market’s spiciest performers. But as tempting as it may be to jump on this bandwagon, it’s time for a reality check.

The surge in Chipotle’s shares has been largely driven by Reddit traders chasing quick gains from momentum stocks. The excitement reached new heights with the announcement of a 50-for-1 stock split, a move often seen as a way to make shares more accessible to a broader base of investors. However, this kind of rapid ascent raises questions about sustainability.

Despite its popularity, Chipotle is nearing saturation in the U.S. market, and its potential for international expansion remains uncertain. The concept’s novelty is undeniable, but whether it can replicate its stateside success globally is still up for debate.

Now, with CMG trading at over 50 times forward earnings, the stock’s valuation is entering hard-to-justify territory. While there’s no denying Chipotle’s culinary appeal, the same can’t be said for its current stock price after such an explosive rally.

For investors, this might be the perfect time to take profits off the table. Chipotle’s fundamentals might be solid, but at these prices, the risk of a pullback is becoming increasingly hard to ignore.

Nauticus Robotics (NASDAQ:KITT) – Sinking Ship or Just Rough Seas Ahead?

Nauticus Robotics, a name synonymous with cutting-edge ocean technology, has been making waves with its innovative AI-driven autonomous robots and software solutions. From the Aquanaut robots to the ToolKITT cloud software, Nauticus seems to have all the right tools for revolutionizing marine exploration and intervention services.

However, diving into their latest financial report reveals a stormy picture that’s hard to ignore. Despite the futuristic appeal of their products, Nauticus’s financial health is taking on water. The third-quarter results were particularly sobering, with total revenue plunging 47% compared to last year. Even more concerning, operating losses widened by 36%, largely due to a significant uptick in general and administrative expenses.

The company’s own admission in the report is a red flag for any investor: Nauticus is currently unable to generate enough revenue to cover its operating costs, let alone fund its ambitious projects. This financial turbulence, coupled with declining revenues and escalating expenses, raises serious doubts about the company’s viability.While Nauticus Robotics may be charting a course toward a future of high-tech ocean exploration, the financial currents seem to be against them. For investors, this might be the time to consider jumping ship before the waters get even rougher.

Three Strong Conviction Buys for April

By
Editorial Staff
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0

Navigating the stock market can be a high-stakes game. Choose incorrectly, and your portfolio might suffer. But the right choices? They could be your ticket to financial triumph. With thousands of stocks to choose from, pinpointing those poised for success is no small feat. It’s a daunting task, requiring hours of market analysis and company research – time that many people simply don’t have.

That’s where we come in. Each week, we delve deep into the market’s vast array of options, sifting through countless possibilities to bring you a select few. These are not just any stocks; they are carefully chosen based on solid research, current market trends, and potential for noteworthy growth.

This week, we’ve honed in on three stocks that stand out from the crowd. Our picks go beyond the mainstream; they’re strategic selections, crafted for significant impact in both the immediate future and over the long haul.

Click here to discover the full watchlist and unveil these exceptional stock picks.

Vital Energy (NYSE:VTLE): A Hidden Gem in the Energy Sector

Vital Energy, a key player in the exploration and production niche of the hydrocarbon industry, is making notable strides in the Permian Basin of West Texas. With a commendable 16% increase in its stock value since the year’s start, VTLE is catching the eyes of savvy investors looking for growth in the energy sector.

The current global landscape, marked by supply chain disruptions and geopolitical tensions, positions Vital Energy favorably. Additionally, the slower-than-expected adoption of electric vehicles suggests combustion engines might stick around longer than anticipated, potentially boosting demand for Vital’s upstream hydrocarbon ventures.

Financial analysts are casting a bullish outlook on Vital for fiscal 2024, projecting revenues to hit $1.87 billion—a significant jump from the previous year’s $1.55 billion. Looking further ahead, fiscal 2025’s sales are expected to edge up to $1.9 billion, underscoring the company’s growth trajectory.

Despite these promising forecasts, VTLE’s stock is currently trading at a surprisingly modest trailing-year sales multiple of 0.66X. This valuation paints Vital Energy as an undervalued stock ripe for the picking, especially for those betting on the enduring relevance of traditional energy sources amidst a shifting automotive landscape. With analysts backing its potential, Vital Energy stands out as a compelling buy in this week’s stock watchlist.

Oracle (NYSE:ORCL): Riding the AI Wave to New Heights

Oracle, a name synonymous with enterprise software and cloud solutions, has been making headlines with its AI-driven growth spurt in the middle of last year. Despite a pause in momentum since its peak last June, Oracle’s recent quarterly earnings have sparked a fresh wave of investor interest. Trading at 33 times trailing P/E, Oracle presents a compelling value proposition compared to its cloud peers, suggesting there’s room for further growth without stretching valuations too thin.

The company’s strategic move to integrate generative AI throughout its offerings positions Oracle as a frontrunner in the enterprise AI space. Its OCI Generative AI service, in particular, is turning heads with its ability to harness advanced AI models from industry partners like Cohere. This innovation not only enhances Oracle’s product suite but also solidifies its status as a key player in the evolving tech landscape.

Looking ahead to the latter half of 2024, Oracle shows no signs of slowing down. Its aggressive push in enterprise AI is expected to keep it ahead of the curve, leaving little room for competitors to catch up. With analysts rallying behind ORCL, it’s clear that Oracle’s blend of steady performance and strategic innovation makes it a standout pick for this week’s stock watchlist. For investors eyeing the tech sector, Oracle offers a blend of growth potential and established prowess that’s hard to ignore.

Steel Dynamics (NASDAQ:STLD): A Sustainable Steel Powerhouse with Attractive Returns

In the realm of commodity-based companies, Steel Dynamics stands out as a beacon for value investors seeking a mix of traditional industry strength and forward-thinking sustainability. As the third-largest steel producer in the United States, Steel Dynamics isn’t just about volume; it’s their commitment to sustainable practices that truly sets them apart. By prioritizing metal recycling, the company not only enhances its operational efficiency but also aligns itself with broader environmental goals, making it an appealing choice for the eco-conscious investor.

What’s particularly enticing for those with an eye on value is Steel Dynamics’ impressive total yield of 8.14%, coupled with a recent 8% hike in its dividend to $0.46 per share. This increase is not a one-off event but a continuation of a five-year streak of dividend growth, underscoring the company’s unwavering commitment to its shareholders. Even more, Steel Dynamics has managed to maintain a 100% quarterly payment rate over these years, showcasing its financial resilience and dedication to returning value to its investors.

2023 was a banner year for Steel Dynamics, with the company celebrating its second-highest revenue year at $18.8 billion and netting $2.5 billion in income. Not resting on its laurels, the company demonstrated its belief in its own stock by repurchasing 8% of its outstanding shares, a bold move that speaks volumes about its confidence in its future prospects, despite the challenges of higher debt costs and the inherently expensive steel production process.

For conservative investors seeking a blend of stability, sustainability, and shareholder-friendly policies, Steel Dynamics presents a compelling case. Its robust financial health, combined with a clear commitment to both environmental stewardship and shareholder value, makes STLD a standout pick for those looking to bolster their portfolios this April.

Buffett Dumps Apple Here’s What He’s Buying Instead

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Editorial Staff
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In the latest chapter of the institutional investing saga, Warren Buffett, the Oracle of Omaha himself, made headlines again. This time, it’s his decision to significantly reduce his fund’s stake in Apple (AAPL). For someone who’s famously bullish on AAPL, trimming down holdings by more than 10% from over 48% of Berkshire Hathaway’s portfolio to 44% is not just a minor adjustment; it’s a move that prompts a deeper dive into his strategy. So, why did Buffett decide to part ways with about 10 million shares of the tech giant, and more intriguingly, where is he channeling those funds instead?

In a turn of events that might surprise some, Buffett has been bolstering his investment in oil and gas behemoth Chevron (CVX). With an additional $16 million poured into Chevron, Buffett’s stake in the company now stands at a staggering $19 billion. This move is particularly noteworthy, not just because of the sheer volume but because it marks a pivot back to the energy sector, a domain Buffett had been gradually stepping back from. The timing is curious, especially as Chevron eyes the acquisition of Hess’s (HES) Guyana assets, a deal complicated by Exxon Mobil’s (XOM) and CNOOC’s existing claims. Buffett’s renewed interest in Chevron, amidst these dynamics, suggests a calculated bet on the energy titan’s growth prospects and strategic maneuvers.

Then there’s Sirius XM Holdings (SIRI), the satellite radio operator that Buffett has taken a liking to recently. Despite not initiating any new positions last quarter, Buffett upped his stake in Sirius XM, a company he first invested in just the previous quarter. Now holding 40 million shares valued at almost $189 million, Buffett’s investment in Sirius XM might not seem as significant compared to other holdings, given its modest size relative to Berkshire Hathaway’s portfolio. Yet, this move signals Buffett’s confidence in the company’s free cash flow potential, despite the competitive threats from streaming giants like Spotify (SPOT) and even Apple’s iTunes. With Sirius XM’s stock perceived as undervalued, Buffett’s incremental investment could be seen as a play for value in a market ripe with overvaluations.

The decision to dial down on Apple, while simultaneously increasing stakes in Chevron and Sirius XM, paints a picture of Buffett’s evolving investment philosophy. It’s a reminder that even the most steadfast relationships in the stock market, like Buffett’s with Apple, are subject to reassessment and realignment in pursuit of strategic portfolio diversification. Buffett’s moves are a masterclass in not just following the trends but reading between the lines, understanding the broader economic indicators, and positioning for the long haul.

As market watchers, investors, and Buffett aficionados dissect these latest maneuvers, the underlying question remains: What does Buffett see on the horizon that’s guiding these decisions? Whether it’s a bullish outlook on the energy sector’s resilience or spotting value in underappreciated corners of the market, Buffett’s chess moves are a study in strategic foresight and adaptability. For those of us looking to glean insights from the Oracle’s playbook, the key takeaway is clear: stay nimble, stay informed, and perhaps most importantly, stay open to recalibrating your investment thesis in the ever-evolving market landscape.

Three High-Quality Dividend Stocks to Load Up On in April

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Editorial Staff
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Dividend stocks are poised to do well this year. With Jefferies projecting a notable acceleration in dividend growth in the United States to 6.2% from the previous year’s 3.9%, it’s clear that dividends are making a strong comeback. This resurgence is particularly noteworthy against the backdrop of the past two decades, where stock buybacks dominated the scene as the primary method for companies to return value to shareholders. Yet, dividends have steadfastly held their ground, contributing significantly to total returns—a testament to their enduring value in an investor’s portfolio.

The landscape for dividends is evolving, driven by a shift towards more sustainable financial practices. As the cost of debt climbs, leading to a reduction in stock buybacks, companies find themselves with enhanced free-cash-flow cover, paving the way for a renewed focus on dividend growth. This shift is not just a financial necessity but a strategic move to attract investors seeking stable and reliable returns in a landscape marked by uncertainty.

In this context, high-quality dividend stocks emerge as a beacon for savvy investors. The criteria for selection are stringent, focusing on top-tier U.S. companies with a market capitalization exceeding $5 billion and a forward dividend yield surpassing the regional median. These companies are not just large; they are also highly profitable, with impressive returns on equity and investment capital. As we navigate through the year, these three high-quality dividend stocks stand out for their potential to deliver not just steady income but also a promise of growth, making them a must-watch for those looking to fortify their portfolios with resilient and rewarding investments.

Darden Restaurants (DRI) – A Pick with Appetizing Dividends

Darden Restaurants, the powerhouse behind some of your favorite dining spots, is serving up more than just delicious meals; it’s dishing out a 3.3% 12-month forward dividend yield that’s sure to catch the eye of dividend hunters. With the stock up 4.5% this year and a nearly 19% increase in 2023, Darden is proving to be a resilient player in the volatile restaurant industry.

Analysts give Darden an overweight rating, seeing a modest but solid 4% upside to the average price target. This optimism is not unfounded. The company is on the brink of revealing its fiscal third-quarter financial results next week, riding high on the back of fiscal second-quarter earnings that exceeded expectations. While revenue didn’t quite hit the mark last quarter, Darden’s decision to raise its full-year earnings guidance signals a confident outlook on its financial health and operational efficiency.

Let’s not forget the cherry on top: in June, Darden turned up the heat on its shareholder returns, increasing its dividend by 8% to $1.31 per share. This move is more than just a number adjustment; it’s a testament to Darden’s commitment to rewarding its investors and its belief in the company’s continued growth.

For those looking to spice up their investment portfolio with a stock that combines a robust dividend yield with potential for capital appreciation, Darden Restaurants offers a compelling blend of stability and growth prospects. As we await the latest earnings report, Darden stands out as a flavorful pick in the high-quality dividend stock menu.

Broadcom Inc. (AVGO) – A Semiconductor Powerhouse with a Growing Dividend

With the largest market cap on our high-quality dividend stock list, Broadcom isn’t just a big player; it’s a giant in the semiconductor industry. Sporting a 1.6% 12-month forward dividend yield might not turn heads at first glance, but there’s more to this story than meets the eye.

Earlier this month, Broadcom delivered a one-two punch with a revenue and earnings beat for its fiscal first quarter, not to mention its full-year revenue guidance, which hit the mark perfectly with analysts’ expectations. But here’s the kicker: in December, Broadcom decided to sweeten the deal for its investors by boosting its dividend by 14% to $5.25 per share. Now, that’s a move that signals confidence if I’ve ever seen one.

Wall Street seems to be singing Broadcom‘s praises, tagging it with an overweight rating and eyeing a 21% upside to the average price target. And let’s not overlook the impressive performance of its shares, which are up nearly 13% this year alone, following a near doubling in 2023. In a world where consistency is king, Broadcom stands out not just for its robust financial performance but also for its commitment to rewarding shareholders. This stock isn’t just about riding the semiconductor wave; it’s about investing in a company that knows the value of giving back to its investors.

Procter & Gamble (PG) – Steady Growth in Consumer Staples

Procter & Gamble, a stalwart in the consumer packaged goods sector, has been showing some impressive momentum this year, with shares up 10% year to date. Known for its robust portfolio of everyday products, PG stands out with a 12-month forward dividend yield of 2.5%, a testament to its commitment to shareholder returns.

The company’s fiscal second-quarter earnings report in January presented a mixed bag, with adjusted earnings per share exceeding expectations, despite revenue that didn’t quite hit the mark. However, it’s the consistency and resilience of Procter & Gamble that catches the eye. In April, the company demonstrated its confidence in its financial health and future prospects by increasing its dividend payout by 3%.

Investing in Procter & Gamble is more than just putting money into a company; it’s about buying into a legacy of reliability and steady growth. With its solid dividend yield and a track record of navigating through market ups and downs, PG represents a cornerstone investment for those looking to build a portfolio with a balance of growth and income. As we move forward, Procter & Gamble‘s ability to adapt and innovate within the consumer staples sector makes it a compelling pick for dividend-focused investors seeking stability in their investments.

Three Strong Conviction Buys for the Week Ahead

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Editorial Staff
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In the constantly shifting landscape of the stock market, separating the wheat from the chaff is no easy feat. It’s a world where the wrong picks can erode your hard-earned gains, but the right ones? They have the power to catapult your portfolio to new heights. With thousands of stocks in the fray, pinpointing those poised for a breakthrough can feel like searching for a needle in a haystack.

This is where we step in. Every week, we comb through the market’s labyrinth, scrutinizing trends, earnings reports, and industry shifts. Our goal? To distill this vast universe of stocks down to a select few – those unique opportunities that are primed for significant movement in the near future.

This week, we’ve zeroed in on three standout stocks. These aren’t your run-of-the-mill picks; they are the culmination of rigorous analysis and strategic foresight. We’re talking about stocks that not only show promise in the immediate term but also hold the potential for sustained growth.

Curious to see which stocks made the cut? Click here to access the full watchlist and discover the exceptional opportunities we’ve unearthed this week. Trust us, this is one reveal you don’t want to miss.

Exxon Mobil (NYSE:XOM), a distinguished member of the dividend aristocrats with a commendable streak of increasing its dividend payouts for 41 consecutive years, stands out as a compelling pick to start off our weekly watchlist. As a leading figure in the oil and gas sector, Exxon Mobil’s financial health is robust, buoyed by oil prices maintaining a strong position at over $80 a barrel.

Even amidst the tumultuous times of the pandemic, Exxon Mobil stood its ground, not just maintaining but also ensuring its dividend yield remained attractive at 3.35%. With a dividend payout ratio of 41%, the company not only showcases the sustainability of its dividends but also hints at the potential for future increases. This is further underscored by the impressive $55.4 billion in cash flow generated in 2023, with a generous $32.4 billion returned to shareholders.

The recent declaration of a quarterly dividend of 95 cents per share is particularly enticing for investors, especially with XOM stock currently trading around $113. Despite a 10% rise YTD, any price dips present a buying opportunity not to be missed. While the looming elections and the shift towards electric vehicles pose considerations, Exxon Mobil’s current relevance and enduring presence in the energy landscape cannot be overstated.

For those looking to fortify their portfolios with a stock that combines a rich history of dividend growth with solid financials and future prospects, Exxon Mobil offers a blend of stability and potential that’s hard to pass up.

Dynatrace (NYSE:DT) is a standout in the burgeoning field of IT security. As the digital age propels forward, the demand for sophisticated security solutions is skyrocketing, a trend that Dynatrace is well-positioned to capitalize on. With artificial intelligence (AI) reshaping the landscape, services like those offered by Dynatrace are becoming increasingly indispensable.

Dynatrace isn’t just any security platform; it’s a beacon for companies navigating the complexities of multicloud environments. In today’s digital ecosystem, where businesses often rely on a mix of public and private clouds, Dynatrace’s platform shines by automating cloud services across diverse providers. This capability is not just a convenience; it’s a strategic advantage in optimizing cloud operations.

What’s particularly compelling about Dynatrace is its growth trajectory. The company is on track to expand by approximately 30% this year, a rate nearly triple that of the broader S&P 500. This explosive growth is a testament to Dynatrace’s innovative approach and the increasing reliance on multicloud strategies by businesses worldwide.

Supporting this outlook is a report surveying 1,300 CIOs, which highlights an expected surge in multicloud usage. As the volume of data generated by businesses grows exponentially, the need for automated and intelligent cloud management solutions becomes critical. Dynatrace, with its cutting-edge platform, is poised to be at the forefront of this shift, offering investors a unique opportunity to tap into the future of cloud security.

For those looking to enhance their portfolios with a tech stock that’s not just keeping pace but setting the pace in its industry, Dynatrace presents a compelling case. Its role in the expanding multicloud landscape, coupled with impressive growth prospects, marks DT as a must-watch

Lastly, our spotlight turns to Conagra Brands (NYSE:CAG), a company that’s been cooking up impressive growth, particularly in its International sector. With organic net sales growth of 5.6% this quarter, driven by standout performances in Canada and Mexico where rates soared above 9%, Conagra is proving its prowess on the global stage. This growth is not just numbers; it’s a testament to Conagra’s strategic market positioning and its ability to execute effectively across borders.

The company’s food service segment also deserves a round of applause, showcasing a 4.3% organic net sales growth. This success is attributed to an improved pricing mix and expanded distribution of its frozen product line, highlighting Conagra’s agility in adapting to the evolving consumer preferences for out-of-home dining. The ability to pivot and cater to the food service industry’s demands underscores Conagra’s versatile product range and strategic foresight.

Moreover, the increased adjusted operating margins in both the food service and international categories signal Conagra’s adeptness at cost control and operational efficiency. With the food service sector alone marking a notable 1.93% gain in adjusted operating margin and the international segment improving by 0.3%, Conagra is demonstrating its capability to not only grow revenue but also enhance profitability.

For investors looking for a stock that combines solid growth in international markets with strategic expansion in the food service industry, Conagra Brands presents a compelling case. Its recent performance is a clear indicator of the company’s ability to diversify income sources, adapt to market changes, and maintain operational excellence. As we head into the week, CAG stands out as a strong conviction buy, offering a taste of both stability and growth potential in the ever-evolving food industry.

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