The 3 best stocks to buy in February
Consider adding these 3 stocks next month
With the stock market having one of the worst starts to a year in recent memory, the idea of adding new positions in February may meet with some hesitation among many investors. It will certainly be interesting to see if equities can finally bottom and how the market digests the recent Fed meeting and the prospect of rate hikes in March. Combine these headlines with the fact that we are heading into the heart of earnings season and you have a recipe for a fascinating month ahead.
While there are many complex factors at play in financial markets and the economy right now, that doesn’t mean investors should avoid looking for stocks trading at attractive levels. The truth is, volatility can create incredible buying opportunities, and when sentiment is extremely washed out, it can be a great time to stock up on some intriguing long-term stocks.
That’s why we’ve compiled the following list of the top 3 stocks to buy in February so you can approach this month with the confidence to take full advantage of whatever the market brings.
If there’s one stock investors should watch closely in February, it’s Apple. The tech multinational has such a heavy weight in stock indexes that it will provide important signs on the direction we could be heading. Regardless of how stocks are trading in the short term, long-term investors should consider recent weakness in Apple as an opportunity to add shares of one of the best companies in the world at prices well below 52-week highs. The company’s smartphones, personal computers, tablets, wearables and accessories are some of the best-selling consumer electronics products in the world, and it’s easy to envision a future where these devices continue to steal shelves.
Apple continues to post breathtaking growth quarter after quarter, which is a big part of why it’s become the world’s most valuable company by market capitalization. The company has just announced its first quarter results, which saw Apple beat consensus estimates on EPS and revenue, telling us that the company has been able to manage supply chain issues well. Apple’s first-quarter revenue of $123.9 billion was an all-time high and represents 11% year-over-year growth, and the company expects to set another record for the March quarter.
Integrated Zim Shipping (NYSE: Z.I.M.)
Next up is attractive shipping stock that has benefited from the aforementioned supply chain issues. Based in Israel Zim Integrated Shipping operates a fleet and network of shipping companies providing freight services on all major global trade routes. Shipping companies like Zim have been busy helping the international trade market return to normal after the pandemic, especially as big companies like Alibaba depend on it for logistics technology. Shipping rates have also increased significantly, which is reflected in this company’s revenue.
Zim Integrated Shipping generated its highest-ever quarterly net profit of $1.46 billion in the third quarter, up 913% year-over-year, and strengthened its guidance for the year, which are two signs of a company that is poised to continue generating shareholder value. It’s also worth mentioning that the stock offers a very attractive annual dividend yield of 16.83%, which is certainly attractive given inflation concerns.
Given that tech stocks are most at risk in February given rising bond yields, it makes sense to look to a high-quality cyclical name like Deere & Co. The stock has been consolidating for almost a year whole and could be preparing for a breakout if the market can find a bottom. Deere is the world’s largest producer of agricultural equipment and also one of the leading producers of construction equipment. That means it’s a company that stands to benefit from US federal infrastructure spending and high crop prices. Supply chain constraints are also expected to ease in the coming months and help the company meet growing customer demand for new and used equipment.
The company will release its first quarter results on Feb. 18, which could be a catalyst that helps stocks break out of the recent price range. last quarter, Deere generated fourth-quarter EPS that was up more than 70% year-over-year, which is a good sign that the company’s business is heading in the right direction post-pandemic. Finally, a dividend yield of 1.13% and a forward price-to-earnings ratio of 16.75 make it exactly the type of stock to watch in a challenging market environment where value may remain more in favor than growth for the coming months.