CPI Ruins the Party: 3 High-Flying Stocks to Cash Out Of

United States equities have calmed down since their rally in the first quarter of 2024. The S&P 500, Nasdaq and Russell 2000 have all dipped slightly from their previous highpoints. While market trends, such as the generative AI craze, may have been enough to lift stocks to new heights, nowadays analysts and investors are increasingly worried about how stretched trading multiples have become. Today, we’re analyzing the top stocks to sell on the CPI report.

Inflation also remains in the equation. Economists and market analysts expected there to be a downtick in the core consumer price index (CPI) figures for March. Instead, there was a month-to-month increase of 0.4% while the Y/Y rate for the core CPI remained at 3.8%. In other words, inflation seems here to stay for some time, which casts doubt on the Q2 rate cuts some analysts were hoping for. Persistent inflation and interest rates could prolong many companies cloudy business environments, potentially impacting high trading multiples.

Without further ado, below are stocks to sell on the CPI report before inflation and rate fears bring in more market turbulence.

SentinelOne (S)

SentinelOne (NYSE:S) is a global provider of cloud-based cybersecurity solutions, best-known for its ‘Singularity Extended Detection and Response Platform’. The concept leverages artificial intelligence to power cybersecurity solutions on an organization’s cloud network.

Singularity’s value proposition was simple. AI technology would create a human-like experience for the platform’s users, thus significantly decreasing upfront costs for customers. Addressing this pain-point in cybersecurity, SentinelOne roared into prominence with a record IPO and years of consecutive triple-digit revenue growth. In 2023, SentinelOne’s share price rose more than 88%; of course, the AI craze had a lot to do with it. While SentinelOne’s shares have had a decent run in Q1’2024, shares are down nearly 21% for the year.

The company’s Q4 earnings report is partially to blame. While financial figures did come in above Wall Street estimates, guidance for the company’s following fiscal year was not sorely underwhelming. Intense competition from CrowdStrike (NASDAQ:CRWD) which just seems to be snapping up market share is also a concern on investors’ minds. Now with this hotter-than-expected CPI report, which could result in elevated interest rates for a long period of time, SentinelOne’s growth prospects look even dimmer. Time to cash out now before more damage is done.

Rigetti Computing (RGTI)

Rigetti Computing (NASDAQ:RGTI) is a vertically-integrated quantum computing business. This means the company both designs and manufactures its multi-chip quantum processors. Rigetti uses superconducting circuits as qubits fabricated on silicon chips and operating at near-zero temperatures. To deliver its quantum computing capabilities to clients, Rigetti leverages cloud service networks while also providing quantum software development tools as well as quantum hardware design and manufacturing.

While Rigetti announced a successful Q4 2024 earnings period, which saw both revenue and earnings per share beat Wall Street estimates, the stock is also coming upon uncharted territory with interest rates likely being higher for longer. A startup like Rigetti needs ample access to equity and venture capital to sustain its losses. A company like this will find it difficult to obtain sizable loans. Still, access to equity capital could dry up even more if investors become more risk averse

RGTI’s shares have risen approximately 20% to around $1.18 per share from a year-to-date perspective but has plummeted over 46% from its high of $2.19 per share. Because quantum computing is still a pretty nascent field, investors are probably better of cashing out of this one, especially as the macroeconomic environment continues to be murky.

Cloudflare (NET)

Cloudflare (NASDAQ:NET) hosts a massive Content Delivery Network or CDN that helps delivery continent to millions across the globe. For those unaware, Cloudflare’s CDN is just a series of collocated servers wherein Cloudflare’s customers can affordably store data. Accessing a favorite streaming service or YouTube channels becomes simpler with a CDN, or a “distributed network,” that allows users to quickly pull up a video or any other piece of content from the closest server.

Cloudflare has provides a security apparatus to websites. If you have ever accessed a website and had a virtual private network (VPN) on, perhaps you had a Cloudflare pop-up window verifying if you were a “real human.” In other words, the Cloudflare CDN also protects customers’ content from malware and other intrusive attempts so that websites do not have to build out that security infrastructure on their own.

The CDN company’s shares have done well in 2024, rising 13% on a year-to-date basis. At one point in the year, NET’s share price had risen almost 30% after its Q4 report blew past Wall Street estimates. However, Cloudflare clearly isn’t immune to the machinations in the macro environment and broader equities market. Its insanely high valuation as well as the uncertainty around how higher rates for longer will affect its business growth have sent shares plummeting 13% from its all-time high. Similar to the others in the list, probably now is a good time to accept your gains and accept NET as one of the stocks to sell on the CPI report.

On the date of publication, Tyrik Torres did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Tyrik Torres has been studying and participating in financial markets since he was in college, and he has particular passion for helping people understand complex systems. His areas of expertise are semiconductor and enterprise software equities. He has work experience in both investing (public and private markets) and investment banking.

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Cash Burn: 3 Dividend Aristocrats to Dump for Buyback Plays

Reassess your portfolio with these insights on dividend aristocrats versus buybacks

Although dividend investing has plenty of research backing its efficacy, it’s a slow burn.

Further, it may incur high opportunity costs during broad-market rallies, such as what we saw during the bull in the Nasdaq last year. If one seeks capital appreciation potential, plan to sell some Dividend Aristocrats. Rather, invest in companies pursuing aggressive buyback activities, which could lead to significant short-term capital gains.

The Dividend Aristocrats to sell in this list are marked with issues. Even well-established companies can see their competitive advantages erode over time. Closely examining the strength and durability of a company’s moat is crucial.

In these case of these slow burners, one could seek better opportunities elsewhere. A prime example is investing in a buyback ETF like the Invesco BuyBack Achievers ETF (NASDAQ:PKW), which has returned 61.76% over the past five years.

So, let’s explore three dividend aristocrats to sell.

Archer Daniels Midland (ADM)

A major player in the agricultural industry, Archer Daniels Midland (NYSE:ADM) is known for processing grains and other products. Despite its significant role in the market, the company reported a decrease in earnings in recent quarters.

Additionally, its dividend yield of 3.31% and dividend growth rate of 12.12% may be too low for both income and dividend growth investors. This fails to cater to either type of investors who typically buy dividend aristocrats.

Furthermore, last year, The Nutrition segment’s operating profit significantly decreased by 36% compared to the previous year. Also, the company experienced operational issues, such as unplanned downtime, which contributed to a decline in profitability.

And, ADM has set its guidance with adjusted earnings per share projected to range from $5.25 to $6.25. That marks an 18% decrease at the midpoint from 2023. This outlook reflects moderating margin conditions and higher costs.

It might be worth considering trading in shares of ADM into a buyback ETF or a firm that’s pursuing an aggressive buyback strategy.

S&P Global (SPGI)

S&P Global (NYSE:SPGI) provides financial information and analytics. It has a long history of dividend growth but faced mixed financial results recently. While the company’s revenue has grown, it missed earnings estimates slightly.

Also, SPGI offers investors only a 0.76% shareholder yield, which is hampered by its low dividend yield of just 0.89% and dividend growth rate of 4.64%. This is particularly weak, given it has 51 years of consecutive growth under its belt. 

Some factors that investors may appreciate though is that it has returned 85.94% in capital appreciation over five years. But shares currently trade at a high price of $409.56. While the high stock price is not inherently a bad thing, it does limit one’s flexibility to secure more yield through options strategies such as covered calls and cash covered puts, which limits its income potential.

Despite higher interest rates, SPGI anticipates a rebound in capital market activities, supported by more resilient global economic conditions than previously expected.

Therefore, SPGI operates between a mix of a high-performing tech stock while also being robust. However, it may not offer the kinds of income potential that investors seek.

Medtronic (MDT)

Lastly, Medtronic (NYSE:MDT) specializes in medical technologies and has been a reliable dividend payer. However, the company faces challenges such as pricing pressures and competition, which might impact its financial stability.

MDT’s dividend is the most speculative of the three, with a high payout ratio of 87.90%. Adding to the bear case is that its dividend yield is just 3.44% at the time of writing. Furthermore, its dividend growth rate of 1.47% leaves much to be desired. 

MDT’s stock price has fallen 8.15% over the past five years, and trades near its five-yearly lows. It reported Q3 revenue for FY24 at $8.89 billion, marking a 4.7% increase on a reported basis and a 4.6% increase on an organic basis. The company’s GAAP diluted earnings per share (EPS) for the same quarter was $0.99, with a non-GAAP diluted EPS of $1.30.

Also, analysts predict a rebound for its EPS this year, with forecasts it could climb over 80% to 5.25. However, this is speculative and very optimistic. So this makes it one of those dividend aristocrats to sell for investors who like to play it safe.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.

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Hidden High-Yielders: 3 Dividend Stocks Everyone’s Overlooking

Exploring the high return potency in these stocks related to real estate, financials, and consumer staples

Smart investors always search for underutilized prospects with room to expand and provide stability. Here, you’ll find three of these undiscovered gems. These dividend stocks, though overlooked, provide attractive chances to expand holdings and realize long-term gains.

The first one offers a special opportunity to profit from the growing market for cannabis cultivation and processing facilities. The company leads a nexus of real estate in the rising cannabis sector. The second, on the other hand, is notable for its strategic emphasis on senior secured loans. This prioritizes risk minimization while offering investors exposure to a wide range of industries. It is positioned as a dependable revenue source in erratic market situations because of its consistent net leverage ratio and sensible practices.

Ultimately, the third one has taken advantage of the growing market for smokeless alternatives to diversify its sources of income deliberately. The company’s New Categories sector, which focuses significantly on innovation and product development, offers a remarkable growth prospect.

Hence, investors can profit from distinct market niches and beat more general market indexes by exploring these hidden treasures.

Overlooked Dividend Stocks: Innovative Industrial Properties (IIPR)

An image of US currency. dividend stocks for steady income

Source: ShutterstockProfessional / Shutterstock.com

With a 7.4% dividend yield (forward), Innovative Industrial Properties’ (NYSE:IIPR) property portfolio holds 108 properties across 19 states or around 8.9 million rentable square feet. Geographic and tenant concentration risks are reduced, as no state or tenant accounts for more than 15% of the yearly base rent.

Additionally, Innovative Industrial Properties maintains a high-quality tenant roster, with 90% of yearly base rent coming from multi-state operators (MSOs). Similarly, 62% of yearly base rent is derived from operators of public companies. The company has contacts with some of the biggest and most seasoned operators.

Furthermore, there is consistency and predictability in the cash flows due to the weighted average remaining lease term of 14.6 years. As a result, this solidifies the revenue stream. The fact that Innovative Industrial Properties has no major debt maturities until May 2026 improves its flexibility and liquidity position even more.

Finally, with 100% rent collection for Q4 2023 and year-to-date through February 2024, Innovative Industrial Properties’ leasing activity remained strong. In short, the tenant’s creditworthiness and the properties’ critical role in facilitating cannabis activities reflect the company’s fundamental ability to attain rent fully. 

Oaktree Specialty Lending (OCSL)

stock market ticker screen with the word

Source: iQoncept/shutterstock.com

With a concentration on senior secured loans, Oaktree Specialty Lending (NASDAQ:OCSL) holds and manages a varied portfolio. With that, the company pays an 11.4% forward dividend yield. The investment portfolio includes 146 firms with a combined fair value of $3 billion (2023).

With investments in both debt and equity, this diversified portfolio gives exposure to an array of markets and vertical industries. Thus, the company seeks to minimize risk and optimize returns by giving high priority to investments.

Moreover, the net leverage ratio of Oaktree Specialty Lending was steady between 0.9x and 1.25x, which was the intended range. The company maximizes profits for its stockholders while maintaining a solid balance sheet and financial flexibility thanks to its smart leverage management. Furthermore, the debt composition, including 57% unsecured borrowings, indicates the company’s capital structure strategy.

Finally, Oaktree Specialty Lending’s joint ventures own $450 million in investments, mostly in widely syndicated loans distributed among 54 portfolio firms. To sum up, higher interest rates benefit primarily variable loans, as seen by the joint ventures’ annualized return on equity of about 15%. 

British American Tobacco (BTI)

British American Tobacco logo on a building

Source: DutchMen / Shutterstock.com

British American Tobacco (NYSE:BTI) has seen solid growth in its New Categories business, propelled by-products such as Velo and Vuse. The company is yielding a 10.4% forward dividend. According to the corporation, revenue from New Categories increased significantly, with organic revenue rising by 21% at constant rates in 2023. This expansion shows how British American Tobacco has successfully entered and maintained its position in the developing market for smokeless alternatives.

Significantly, Non-Combustibles now account for 16.5% of Group sales, up 1.7% from 2022. This suggests that the revenue mix of British American Tobacco is shifting in favor of smokeless goods. Hence, the robust revenue increase driven by volume in New Categories highlights the efficacy of British American Tobacco’s multi-category approach in broadening its range of products.

Furthermore, reaching profitability in New Categories in 2023 is vital — two years ahead of schedule. Furthermore, with excellent category contribution margins above 20%, the top 10 new category markets accounted for almost 75% of new category revenue in 2023. Therefore, this illustrates the profitability and scalability of British American Tobacco’s New Categories division and valuation growth potential.

As of this writing, Yiannis Zourmpanos held long positions in IIPR, OCSL and BTI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

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3 Dow Stocks to Buy Now: Q2 Edition

Let’s be real – the narrative for Dow stocks to buy now tends to be one of relative safety. What are the chances that the 30 companies of the Dow Jones Industrial Average will be the most exciting ideas of any given year? I’d say quite low.

However, circumstances can always change, as we’ve seen in the geopolitical environment. Following Iran launching missiles against Israel in retaliation for allegedly bombing its embassy in Syria, the world is on edge regarding Israel’s likely response. What adds to the concerns is that the globe is clearly divided along sharp ideological lines.

Under this backdrop, it may be prudent to go with the stalwarts. With that, below are the Dow stocks to buy now.

Chevron (CVX)

Frankly, the case for integrated oil giant Chevron (NYSE:CVX) really sells itself. Even before the geopolitical framework became accelerated, Chevron was one of the top Dow stocks to buy now. With crude oil prices rising and electric vehicle sales struggling due to high prices among other headwinds, the combustion-powered narrative enjoyed a cynically positive backdrop. Of course, the latest crisis helps lift the narrative.

What it boils down to is that Israel, in its bid to maintain credibility, will likely strike Iran back. However, the problem here is that Iran has allies, namely Russia. As well, the Chinese has demonstrated that it will not back away from relations with the Middle Eastern nation. Therefore, any response could lead to a serious escalation, which could easily impact global oil supply chains.

Now, looking at analysts’ projections for the current fiscal year, they’re not encouraging. Earnings per share of $12.86 on sales of $196.66 billion represents a decline from last year’s $13.13 EPS on revenue of $200.95 billion. However, these projections probably need to be upgraded based on present realities. Make no mistake – CVX is likely a credible candidate for Dow stocks to buy now.

Merck (MRK)

Amid the geopolitical rancor, it’s nice to target ideas that may be insulated from such dynamics. That’s why Merck (NYSE:MRK) could be an intriguing idea for Dow stocks to buy now. As a pharmaceutical giant, it has no apparent connection to international relations. More importantly, Merck covers a range of health concerns, including oncology, immunology, neuroscience and cardiovascular, among others.

In other words, irrespective of whatever happens in the geopolitical theater, MRK stock commands high relevance. For instance, Merck features therapeutics and programs for diabetes and improving access to high-quality diabetes care. Since that’s a treatment area that features significant demand and solid growth, Merck should be insulated from the troubles. And that’s a huge positive because playing the geopolitical angle is often risky and unpredictable.

For the current fiscal year, experts are anticipating EPS to land at $8.56 on sales of $63.8 billion. On the bottom line, that’s a huge improvement over last year’s EPS of $1.51. On the top line, the projected revenue implies a growth rate of 6.1%.

Caterpillar (CAT)

To be completely upfront from the get-go, Caterpillar (NYSE:CAT) is the riskiest idea on this list of Dow stocks to buy now. It’s understandable. As a farm and heavy construction machinery giant, Caterpillar depends on a robust global economy. That framework is not quite reliable at this moment. Sure, we’re doing relatively well but many other countries can’t say the same.

Another challenge is inflation. As great as our jobs market has been, more dollars are chasing after fewer goods. That could crimp Caterpillar’s business. So, why consider CAT to be one of the Dow stocks to buy now? Simply, I think the gold-mining industry – along with the hydrocarbon energy market – could see increased activity. And that would potentially translate to higher growth.

Both gold and oil could rise on elements related to the fear trade. While I understand that the projected fiscal 2024 revenue only calls for 0.3% year-over-year growth to $67.25 billion, this forecast could change if the aforementioned markets swing higher. It’s speculative but it’s arguably worth a shot.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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Make No Mistake, Lucid Stock Is Still a Dead End

There’s been some positive Lucid Group (NASDAQ:LCID) stock, but it hasn’t translated into a positive and permanent change in price trends. Shares initially rallied on better-than-expected deliveries, but quickly reversed. The stock reached a new 52-week low recently.

Investors may have absorbed the delivery-beat news and are once again focusing on the largest issues affecting the performance of the company and its shares. Despite the stock being “priced for disaster,” these problems will persist. A further slide in price remains very likely.

Lucid Stock: Some Good, Some Bad With the Latest Company Update

On April 9, Lucid Group released its EV production and delivery numbers for the quarter ending March 31, 2024. During the quarter, the company produced 1,728 vehicles, and delivered 1,967 vehicles. These results made Q1 2024 a record quarter for Lucid.

As mentioned above, these figures came in above estimates. Prior to the deliveries data release, analysts called for the electric vehicle manufacturer to deliver 1,745 vehicles during the quarter.

Yet while this promising deliveries news did result in a modest rally for Lucid stock on April 9, shares quickly coughed back these gains, and then some, over the subsequent trading days.

Again, investors are perhaps shifting focus back towards the negative factors at play with LCID. Interestingly enough, alongside the positive news of a deliveries beat, this latest update from the company contained some other information that may not necessarily give cause to be optimistic.

Namely, price cuts were for sure a big reason for these better-than-expected deliveries numbers. As you may recall, Lucid slashed prices for its Air family of EV sedan models. A decline in gross margins likely came with this sales boost. Also, while deliveries went up, production went down during the quarter.

Many Years Away from a Lackluster Potential Payoff

Lucid stock bulls may concede the negative aspects of the aforementioned update yet still argue that things are starting to move in the right direction for this fledgling company. However, a look at other factors signals that the situation with Lucid isn’t necessarily turning a corner.

For the full year 2024, forecasts still call for Lucid to deliver just 9,000 vehicles. Other early-stage EV manufacturers, like Rivian Automotive (NASDAQ:RIVN), are already at annual production and deliveries in the five-figure range.

That’s not all. Lucid is expected to burn through $3.3 billion of its nearly-$6 billion in total liquidity just this year alone. Lucid will likely keep raising money from Saudi Arabia’s Public Investment Fund, but, as I’ve argued previously, further dilution means LCID will keep spiraling down to lower prices.

Moreover, the payoff for investors could be lackluster, and arrive many years into the future. As InvestorPlace’s Eddie Pan pointed out last week, forecasts call for Lucid to only get out of the red in 2030. Estimated earnings of 6 cents per share that year aren’t exactly much to get excited about.

The Verdict: Staying Away Remains Your Only Choice

If it’s not disheartening enough to hear that Lucid is still very far away from reaching profitability, keep in mind that this may just be the “best case scenario” for this company. Between now and the start of the next decade, Tesla (NASDAQ:TSLA) could cement its lead in the passenger EV space.

Incumbent automakers, especially incumbent European automakers, stand to further expand their share of the luxury EV market if and when electric vehicle demand picks back up. Considering this uncertainty, it makes even less sense that LCID trades for 41.5 times estimated earnings six years out.

Small bits of positive news could keep driving small, short-lived rallies, but expect the long-term trend to stay the same. With a steady slide to persist, staying away from Lucid stock remains the only choice to make.

On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.

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7 Energy Stocks Poised to Profit as Crude Oil Prices Soar

Crude oil prices show little sign of slowing their ascent (and probably won’t), meaning it’s a great time to consider energy stocks. Yeah, it may not align with contemporary politics and ideologies of pushing green solutions. However, the hydrocarbon industry aligns with reality. That’s the most important consideration.

On the domestic political front, President Joe Biden is simply not popular. Therefore, I doubt that he can adopt a draconian approach to the hydrocarbon industry. That’s one reason why crude oil prices may rise. On the international front, geopolitical flashpoints will likely reduce supplies for western nations. That’s coming in a time of heightened demand, which could bode well for energy stocks.

Finally, the fallout in electric vehicle demand suggests that this mobility platform is still too expensive for most Americans. So, hydrocarbons will likely be relevant for longer than expected. Again, it’s a great time to consider the below energy stocks.

Chevron (CVX)

Chevron (CVX) logo on gas station sign with

Source: Sundry Photography / Shutterstock.com

As an integrated hydrocarbon giant, Chevron (NYSE:CVX) is one of the most recognizable names among energy stocks. Further, with crude oil prices projected to rise, it’s one of the top ideas to add to your portfolio. Analysts rate shares a consensus strong buy with a $181.87 average price target, implying over 14% upside potential. The high-side target lands at $203.

To be fair, analysts at the moment don’t see much happening for the next two years. For fiscal 2024, they’re projecting earnings per share to reach $12.05. That’s lower than last year’s print of $12.22. That said, for fiscal 2025, they’re looking at $13.56.

On the top line, covering experts anticipate revenue to hit $183.84 billion. If so, that would mean a loss of 1.7% from last year’s tally of $187.07 billion. And in fiscal 2025, sales might reach $183.88 billion, which is just not that remarkable.

However, because of the shifting fundamentals – particularly the possible fading of relevance of the EV sector – CVX is worth consideration.

Occidental Petroleum (OXY)

Person holding cellphone with logo of American company Occidental Petroleum Corp. (OXY) on screen in front of website. Focus on phone display. Unmodified photo.

Source: T. Schneider / Shutterstock.com

Based in Houston, Texas, Occidental Petroleum (NYSE:OXY) operates under the exploration and production segment or the upstream component of the hydrocarbon value chain. It’s one of the top energy stocks to buy for diverse exposure to the underlying industry. In addition to its upstream business, it also features a midstream and marketing (downstream) unit.

Presently, Wall Street analysts peg OXY a consensus moderate buy. For full disclosure, the average price target sits at $68.71. That’s basically where the price of OXY stock trades now. However, the high-side target calls for $80.

For the current fiscal year, analysts are looking for EPS of $3.66. Admittedly, that’s a disappointing projection from last year’s print of $3.69. However, it must be stated that the most optimistic target calls for an EPS of $5.39.

On the top line, sales are projected to hit $30.05 billion. That’s up 3.9% from last year. Also, with the fundamentals so favorable for energy stocks, the high-side sales target of $32.15 billion isn’t unreasonable.

Kinder Morgan (KMI)

Kinder Morgan logo on a sign outside the company headquarters in Houston.

Source: JHVEPhoto / Shutterstock.com

One of the top energy stocks listed under the oil and gas midstream sector, Kinder Morgan (NYSE:KMI) arguably represents a no-brainer investment. While EVs have seen accelerated sales over the past several years, the world continues to run on oil. And that’s because most drivers continue to drive combustion-powered vehicles for a variety of reasons. So, midstream services like storage and transportation will likely blossom.

Currently, analysts rate shares a consensus moderate buy. That’s not surprising given the fundamental relevance. Also, the average price target comes in at $20, implying over 10% upside potential. I think this might be understated, though the high-side target is $22. That implies over 21% upside, which is more reasonable in my opinion.

For fiscal 2024, covering experts believe EPS will hit $1.22. Notably, that’s an improvement over last year’s print of $1.06. On the top line, they’re looking for sales of $17.72 billion. That’s a very solid gain of 16.9% over last year’s haul of $15.16 billion. And for fiscal 2025, revenue could fly to $18.38 billion.

Overall, with crude oil prices rising, KMI is a great buy for forward-thinking investors.

Marathon Petroleum (MPC)

Marathon Oil gas station carport on sunny day with blue sky background

Source: Jonathan Weiss/shutterstock.com

Headquartered in Findlay, Ohio, Marathon Petroleum (NYSE:MPC) operates under the oil and gas refining and marketing segment. As a downstream specialist, Marathon stands to benefit from a cynical reality. No matter what happens in the economy, people need to move about. Since most transportation and mobility occurs via combustion power, MPC could swing higher. That’s really the bullish case for most hydrocarbon energy stocks.

Analysts agree, rating MPC stock a consensus moderate buy. However, shares have already gained 37% on a year-to-date basis. Therefore, the average price target of $196.21 reflects 6% downside risk. In my opinion, that just means the experts need to reassess their targets based on present and projected realities. Notably, though, the high-side estimate calls for a price per share of $249.

For the current fiscal year, analysts are seeking EPS of $17.69. That’s low compared to last year’s print of $23.63. Even the most optimistic target here calls for $23.45 EPS. And circumstances don’t improve on the top line, with projected sales of $138.4 billion implying an 8% decline from last year.

However, the high-side revenue target stands at $160 billion. That might be more reflective of the current paradigm in energy stocks.


EGY Stock

Moving over to the speculative side of investment ideas for rising crude oil prices, VAALCO Energy (NYSE:EGY) is an independent energy firm. It focuses on the acquisition, exploration, development and production of crude oil, natural gas and natural gas liquids. Given the geopolitical flashpoints and the implied reduction of critical commodity supplies, EGY stock could see significant demand.

To be sure, the market has already responded, with shares up nearly 54% YTD. However, crude prices may continue running up as geopolitical flashpoints and tensions throughout the world show no sign of abating. Therefore, analysts rate EGY a unanimous strong buy with an $8.20 average price target. That implies 17% upside potential. Further, the high-side target calls for $9.07.

For the current fiscal year, experts are anticipating EPS of $1. If so, that would be a significant bump up from last year’s EPS of 62 cents. However, the forecasted revenue of $430.27 million would be down 5.4% from 2023’s print of $455.07 million.

However, the current realities of energy stocks imply that the high-side target of $484.3 million is within the realm of possibility.

Transocean (RIG)

Transocean logo on a laptop screen. RIG stock.

Source: Postmodern Studio / Shutterstock

A Switzerland-based enterprise, Transocean (NYSE:RIG) along with its subsidiaries provides offshore contract drilling services for oil and gas wells worldwide. Per its public profile, Transocean contracts mobile offshore drilling rigs, related equipment and work crews to drill oil and gas wells. Again, with military conflict likely to crimp supplies of critical commodities, RIG is one of the energy stocks to watch.

To be fair, RIG is also one of the riskiest ideas to exploit rising crude oil prices. Right now, analysts peg shares a consensus hold. Within the assessment among eight experts, there’s one sell rating which isn’t particularly encouraging. However, the average price target stands at $7.64, which implies growth potential of nearly 24%.

Still, for speculators, Transocean deserves to be on your radar. For fiscal 2024, analysts project a loss per share of four cents, a major improvement over last year’s loss of 96 cents. On the revenue front, the company could ring up $3.64 billion, up 28.4% from 2023’s result of $3.8 billion. Further, fiscal 2025 sales could hit $4.03 billion, nearly 11% higher than projected 2024 revenue.

Halliburton (HAL)

The Halliburton (HAL) logo on the website homepage. HAL stock price prediction.

Source: Casimiro PT / Shutterstock.com

Based in Houston, Texas, Halliburton (NYSE:HAL) provides products and services to the energy industry worldwide. It operates through two segments: Completion and Production and Drilling and Evaluation. As an equipment and services specialist, Halliburton offers myriad relevancies to energy stocks overall. So, it stands to be a beneficiary should crude oil prices continue to rise.

What’s more, analysts rate shares a unanimous strong buy. And that’s among 14 experts, which is quite impressive. Overall, the average price target clocks in at $47.36, implying over 19% upside potential. However, the high-side estimate calls for a price per share of $54.

For the current fiscal year, covering experts are looking for EPS to land at $3.41. If so, that would be a notable bump up from last year’s EPS of $3.13. For fiscal 2025, the bottom line could expand to earnings of $3.92 per share.

On the top line, revenue might reach $24.27 billion. That would be 5.4% above last year’s tally of $23.02 billion. And fiscal 2025 could jump up to $26.12 billion or 7.6% above projected 2024 revenue.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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Why I Bought the Dip in Apple Stock – and You Should, Too

Apple’s AI strategy is to push the definition of what computing can be, and control that ecosystem

At the start of April, I wrote that investors looking to buy Apple stock (NASDAQ:AAPL) should wait for the dip.

The reason was that Apple seemed to be waiting on AI.

Since then, the stock is up $8 per share, adding about $130 billion to its market cap. I won’t take credit, even though I was one of the buyers.

Instead, it’s Apple’s own moves that deserve the credit. Their AI strategy is becoming clearer, and investors approve.

The Apple AI Strategy

The strategy will be formally announced at its WorldWide Developer Conference in June. It is built on its strengths in controlling the supply chain and expanding the definition of computing.

Supply chain control means Apple designs its own chips. Taiwan Semiconductor (NYSE:TSM) just fabricates them. The Taiwanese company is getting $6.6 billion from the U.S. government to build a new factory and upgrade a second one in Arizona. That’s about 10% of what TSM itself is putting into the project.

The new M4 chips will have an AI focus, appearing first in the Apple Macintosh. The software they run will be the focus of the WWDC. Apple has bought over 30 small companies (so far) in pursuit of that software.

Some of the devices the software serves may also be new. The Apple Car is out. Instead, in addition to a Watch and Vision Pro, Apple is working on a robot butler.  It will be filled with sensors and attachments to perform simple home chores. It’s likely to evolve a personality, too.

These devices are essential for an aging world. Immigrants are doing this work now, but even immigrants cost money. Their supply is not unlimited. Keeping people independent for longer will, in time, lower the costs of aging.

Apple Bears

Every fall in Apple stock brings out Apple bears, as it should.

The argument this time is that government will destroy the company. American and European regulators are both coming after it, especially its profitable, cloud-based services business.

This is not entirely a bad thing. Regulation provides a barrier to entry for other companies, securing Apple’s place on top of technology. Apple has enough money to out-man the regulators with lawyers.

One bear sees Apple forming a “double top” chart pattern at about $200 per share. In the near term, this seems reasonable. It’s going to take time, and capital, for Apple to create a new mass market.

When it does, however, it’s hard to see how any rival can compete with it. Instead, expect a lot of point solutions, like the Alphabet (NASDAQ:GOOGL, NASDAQ, NASDAQ:GOOG) FitBit watch, the Meta Platforms (NASDAQ:META) Quest headset, and whatever silly robot Tesla (NASDAQ:TSLA) is cooking up.

The size of the markets, and the societal implications of these tools working together, make regulation essential. But most regulation isn’t the win-or-lose confrontation ideologues make it out to be. In most cases it consists of oversight and negotiation. That’s another ecosystem Apple will pioneer.

The Bottom Line

Tim Cook has transformed Apple from Steve Jobs’ growth stock into the ultimate blue chip.

Apple stock is no longer a speculation. It’s a stock you accumulate on weakness, accumulate slowly, and hold for years. It’s what International Business Machines (NYSE:IBM) was when I was a kid in the 1960s.

There is a warning there. In the 1970s, IBM put marketers on top and neglected the technology that made them unique. It dictated to customers instead of working alongside them.

The same could happen to Apple as well, after Tim Cook retires. If his successor is a lawyer or a marketer, I may change my tune on Apple stock. It needs to be an engineer focused on solving problems alongside customers. Someone like Microsoft (NASDAQ:MSFT) CEO Satya Nadella. Succession is the biggest risk in Apple stock today.

As of this writing, Dana Blankenhorn had a LONG position in AAPL, MSFT, TSM, and GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his free Substack newsletter.

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