Given the remarkable volatility we’ve seen this year, it’s a wonder there are any uptrend stocks left to find. As the saying goes, though, “There’s always a bull market somewhere.” It’s an observation that holds even in volatile 2022.
U.S. stocks topped out just days into the new year and that has allowed volatility to flourish.
First, the worry was about inflation and the Fed’s hikes. Of course, the specter of what will happen next as a result of Covid is always a pressure point. Now, as if those concerns weren’t enoguh, the focus has shifted to Eastern Europe as Russia invades Ukraine.
The news has caused the volatility index to roar higher, along with oil prices and gold. Other sectors — mainly energy stocks — have performed quite well too. With all that in mind, let’s look at a handful of uptrend stocks.
- Chevron (NYSE:CVX)
- AbbVie (NYSE:ABBV)
- Coca-Cola (NYSE:KO)
- Raytheon (NYSE:RTX)
- Lockheed Martin (NYSE:LMT)
- Freeport-McMoRan (NYSE:FCX)
- Bristol-Myers Squibb (NYSE:BMY)
- Alcoa (NYSE:AA)
Uptrend Stocks to Watch: Chevron (CVX)
Chevron has been an energy sector leader, and energy has been a dominating performer over the last three, six and 12 months.
In fact, I could have listed eight energy stocks as my uptrend stocks, but I didn’t want to do that. If you want to stick to energy, though consider picking some names off this list.
As it pertains to Chevron, the company boasts a $310 billion market cap, making it the second-largest U.S. energy company behind Exxon Mobil (NYSE:XOM). Further, the company also pays out a 3.6% dividend yield.
While shares are up 43% so far on the year, more gains may be on the way if oil prices continue to climb. Currently, Chevron is forecast to grow sales 17.5% this year and earnings by almost 40%.
Despite that, the stock trades at just 14 times earnings. The downside to all of this is that Chevron is trading alongside oil prices. If oil prices dip — and keep in mind, the headlines will move this commodity — then Chevron stock could dip as well.
Uptrend Stocks to Watch: AbbVie (ABBV)
AbbVie has been popping up all over my relative strength list for weeks. It continues to buck the trend and anyone hiding out in this name has enjoyed a solid run in a relatively stress-free manner.
Up nearly 9% so far this year, AbbVie is a solid uptrend stock to keep on your go-to list for now. When the company reported earnings on Feb. 2, I thought there could be some risk to the name. Especially after it missed on revenue expectations.
The stock wavered, but ultimately bulls didn’t want to give up a good thing. AbbVie stock still pays out an attractive 3.75% dividend yield and trades at just over 10 times earnings.
Analysts expect roughly 11% earnings growth this year on high-single-digit revenue growth. UBS analysts recently downgraded the stock due to its valuation, but still raised their price target to $147 a share.
AbbVie will eventually cool off, but for now, it’s one of the uptrend stocks to stick with.
Uptrend Stocks to Watch: Coca-Cola (KO)
Feb. 10 was a big day for the beverage industry, as both Coca-Cola and PepsiCo (NYSE:PEP) reported earnings. However, PepsiCo struggled following lackluster numbers and continues to struggle almost one month later.
Coca-Cola on the other hand continues to do pretty well. In fact, shares are fresh off all-time highs.
The market is getting roiled in volatility and Coca-Cola stock is hitting new all-time highs. A Warren Buffett favorite, Coca-Cola continues to chug along without many worries even as there are more questions about the world’s stability than there has been in quite some time.
Investors are willing to pay 25 times earnings for the stock too. Impressively though, analysts expect more than 8% revenue growth this year to go along with estimates for 5.3% growth for 2023. Earnings are forecast to climb 6% to 7.5% in 2022 and 2023, respectively.
The dependability of the company’s cash flow and earnings are on full display, driving bulls to invest. The demand for the stock is clear and its 2.8% dividend yield doesn’t hurt.
Uptrend Stocks to Watch: Raytheon (RTX)
Chasing stocks that are headline-driven can turn out to be a disaster. That could be the case in oil and energy and it could also be the case in defense stocks.
The former group has seen strong demand for months now, while the latter has seen a more recent spike.
Shares of Raytheon are up nearly 10% so far on the year. The momentum has been more recent in this group, particularly as Russia invaded Ukraine.
Obviously there is an investment theme here, which is that defense companies will see an uptick in demand as geopolitical turmoil increases. War is never good and buying these stocks on that premise can feel like profiteering.
In some ways, I guess it is. Although Raytheon does a lot more than just make missiles. The company also makes “radars (including AESAs), electro-optical sensors, and other advanced electronics systems for airborne, naval and ground based military applications.”
Lockheed Martin (LMT)
Even though energy companies and defense contractors are seeing rising demand, that has its own risks. These uptrend stocks will quickly become “reversal stocks” should we wake up one day and the conflict is resolved.
Lockheed Martin had a good business before the Russia-Ukraine conflict and it will be a great business once there’s peace between the two sides. However, it’s hard to ignore that the stock price ramped on news of the invasion and it’s hard to deny that it will likely fall when the headlines say it’s over.
Even though revenue estimates are relatively flat for this year, consensus expectations call for roughly 17% earnings growth.
That points to an expansion in margins, which should help the valuation. Speaking of that, shares trade at a reasonable ~16.9 times this year’s expectations, estimates of which could surely increase given the state of the world right now.
Again, we shouldn’t hope for a continuation in conflict or a drawn-out fight. But the nature of the situation is a driver for defense and energy firms.
Freeport-McMoRan (FCX)
Freeport-McMoRan is a bit of a conglomerate, having its hands in a little bit of everything. The company mainly operates in North and South America and is headquartered in Phoenix.
It primarily mines for gold and copper, but also for molybdenum and silver. The stock has found a real wave of momentum lately.
Shares have rallied more than 40% from the January low and are now hitting new highs.
Analysts expect about 14% revenue growth this year to go alongside almost 23% earnings growth. Despite the growth, shares trade at just under 13 times earnings.
While Freeport is one of the go-to uptrend stocks at the moment, investors will need to keep their focus on gold and metal prices. A dip in these prices will likely weigh on the stock price too. That said, a continued rise in prices can push Freeport higher.
Bristol-Myers Squibb (BMY)
Like AbbVie, Bristol-Myers Squibb remains a go-to investment for investors. While the stock has been sluggish over the past few years, there’s doubt about the demand for the stock right now.
I have liked Bristol-Myers for a long time. I liked it before its huge acquisition of Celgene for $74 billion in 2019 and loved it after. While Bristol-Myers and Celgene have not received much love, the stock has been performing much better lately.
Plus it’s a great asset amid the high volatility. The stock pays out a 3% dividend yield — are you sensing a theme here yet? — and trades at a low valuation.
Despite the stock price rallying almost 30% since Dec. 1, shares trade at just 8.8 times earnings. While the growth is modest — estimates call for earnings growth of just 4% and 6% this year and next year, respectively — it’s dependable and that’s what investors are looking for right now.
Alcoa (AA)
Now circling back to basic materials, Alcoa is one of our uptrend stocks to watch as well. Like energy stocks, Alcoa has been booming on the upside.
Shares are up about 14% over the past month and more than 175% over the past 12 months.
Despite the enormous rally, Alcoa’s earnings are exploding as well. Now forecast to earn more than $8 a share this year, the stock trades at just over 10 times earnings. That’s not a rich price for more than 20% earnings growth.
When this trend cools, so too will Alcoa, but until then, it remains one of our uptrend stocks to watch.
Driving the move in earnings and the stock price is aluminum prices, which are hitting new records and have jumped 37% since mid-December.
On the date of publication, Bret Kenwell 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.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
