Last year, the digital economy got a huge boost and accelerated tech adoption in a number of sectors, like e-commerce, finance and telecommunications. And while top New Economy stocks will continue to outperform laggards, there are some Old Economy stocks that are now showing their quality. These top-rated stocks to buy aren’t nostalgia plays. They’re companies that continue to meet the demands of their customers for quality, pricing and consistency.
These companies may not be shiny tech firms, but they are the market leaders in their respective sectors and are well positioned to make their mark as the year progresses.
The seven triple ‘A’-rated stocks here are top-rated stocks in my Portfolio Grader in all categories — momentum, fundamentals and overall. They’re all worthy portfolio choices now.
- Camtek (NASDAQ:CAMT)
- Crocs (NASDAQ:CROX)
- General Motors (NYSE:GM)
- Himax Technologies (NASDAQ:HIMX)
- Joint Corp (NASDAQ:JYNT)
- Schnitzer Steel (NASDAQ:SCHN)
- Harley-Davidson (NYSE:HOG)
Stocks to Buy: Camtek (CAMT)
We’ve seen the headlines. Because production of semiconductors was halted or significantly slowed during the teeth of the pandemic, computer chips are in short supply. And big firms have admitted that shortages will last deep into next year.
That means everything that relies on chips — which is pretty much everything from cars to toasters to computers — is in a supply chain stall.
CAMT makes metrology and inspection equipment for the semiconductor sector. This equipment and software helps increase production and testing of chips. It’s a relatively small ($1.2 billion market cap) firm in this sector. But with chip demand so high, it’s perfectly positioned to grow faster than its larger competitors.
And it has. It’s up 70% year to date. It’s a bit expensive, but its earnings growth and cash flow growth are strong, which is why it’s one of my top-rated stocks.
On the opposite end of things, is Crocs — a casual footwear and apparel maker. In 2002, when its odd foam clog-style shoes came out, they were unlike anything on the market. They weren’t hip and they weren’t stylish. But they were amazingly comfortable and surprisingly sturdy.
That made them perfect shoes for kids, since they could beat them up or grow out of them and they didn’t cost a fortune. Their parents then gave them a try — and they loved them, too.
Fast forward two decades later, and those kids are now building the new economy. And they are harkening back to their favorite footwear. That was especially true when everyone was scuffling around the house during the pandemic. And those parents are empty nesters, kicking back in their comfy Crocs supporting their tired feet.
In the meantime, CROX went global. It’s now a $7.2 billion company, up 90% year to date. And it’s up 233% in the past 12 months, yet it’s trading at a current price-to-earnings ratio of just 19x. It’s still a great value with great upside, since CROX is business casual for our increasingly remote world.
Stocks to Buy: General Motors (GM)
A few decades ago, this stock would be on everyone’s top-rated stocks to buy list. But I’m guessing that when you saw this name here, you were a bit surprised. It hasn’t announced a major electric vehicle (EV) launch but is slowly putting models on the street like the new Cadillac Escalade.
It’s also developing interesting new businesses like its last-mile delivery and warehousing venture brightdrop. And GM is working with a major integrated oil company to develop an EV charging station network using green energy in the U.S. and abroad.
The big auto manufacturers are finally making inroads into EVs. Yet despite all the cars and trucks it sells (6.8 million in 2020), the market cap of Elon Musk’s EV firm is 7x greater than that of GM and it sold around 500,000 vehicles.
What’s more, transitioning to EVs is important to GM because EVs have fewer parts, which makes them cheaper and faster to build. That’s a significant incentive. And GM’s increasing efforts in this sector are promising.
The stock is up 44% year to date, yet it’s still trading at a current P/E below 10x. It’s one of this year’s top-rated stocks to be sure.
Himax Technologies (HIMX)
It used to be that most chipmakers actually made their own semiconductors. But as chips started showing up in everything and the life cycle of chips shortened, it became much more efficient for most chipmakers to go “fabless.” That means they design the chips with their customers needs, but they allow a foundry to build the chips.
This approach means chip development isn’t dependent upon building a new factory or upgrading one. Most modern chip companies are fabless, like HIMX.
HIMX’s niche is display imaging processing, basically getting images from the microprocessors to the screen. Its customers include television, laptop, mobile phone, car navigation, virtual reality and other similar manufacturers. It’s a massive, growing market.
With a market cap of just $2.5 billion, HIMX is small player in the space. But this is the time for small companies to take off. It’s up 114% year to date, yet it’s trading at a current P/E of 23x and still has a 1.8% dividend.
Stocks to Buy: Joint Corp (JYNT)
What do you need after a long day sitting (or standing) at your computer screen? For many, it’s a chiropractor. In 2010, a group of chiropractors and others decided it was time to launch a franchise for chiropractors.
Today there are more than 500 offices of The Joint Chiropractic around the U.S. This has always been a niche market, so the concept of franchising operations is a big deal. It means chiropractors get an entire business structure and support so they can focus on delivering care rather than hustling for business.
Also, having a national brand helps with people in search of a chiropractor when they’re in a new town. They know they can trust the brand and know what level of service they can expect.
The stock is in its growth phase right now, with a market cap nearing $2 billion. You likely won’t find JYNT on many top-rated stocks lists, but the stock continues to deliver and pick up more fans along the way. It’s up 200% year to date but should do even better as the year unfolds.
Schnitzer Steel (SCHN)
Did you expect to find a scrap metal recycler that has been around since 1906 on the list of top-rated stocks to buy? Probably not. But it’s here all the same, surprise!
SCHN also has steel mill where it makes finished steel from the scrap. But its biggest business is selling the scrap to domestic and foreign companies and forges that use it to manufacture their own products.
Also remember that steel prices, like many industrial commodities have been rising. Scrap steel prices are lower than new steel, so businesses looking to keep production costs as low as possible are turning to scrap steel when possible. That’s great news for SCHN.
The stock is up 53% year to date, but still trades at a current P/E of 25x, with a 1.5% dividend. Now that the infrastructure deal is in its final stages, the future remains bright for SCHN.
Stocks to Buy: Harley-Davidson (HOG)
This iconic American symbol of the free and open road has been on quite a ride of its own in the past decade. But the company is nearly 120 years old, so it has weathered a number challenges during that time. The most important fact is, it has continued to adapt, innovate and thrive.
The most recent example of this is its transition from its classic “hogs” to its new and expanding line of electric motorcycles. The baby boomers may still embrace the company’s big touring models, but new generations are interested in smaller bikes for commuting as well as some open road fun. HOG also has built out an advanced digital financing arm that makes it much easier to fit a bike to your budget and get you on the road quickly.
The stock is up 27% year to date, but its line of trikes for the older set and expanding line of electric bikes for the younger demographic are very promising moves.
On the date of publication, Louis Navellier has positions in CAMT, CROX, HIMX, JYNT and SCHN in this article. Louis Navellier did not have (either directly or indirectly) any other 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.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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