- Archaea Energy (NYSE:LFG): Demand dynamics imply quarter two could be a boom for the renewable natural gas producer
- Toronto-Dominion Bank (NYSE:TD): Accretive acquisition, strong earnings and interest rates favor TD
- ON Semiconductor (NASDAQ:ON): A lesser-known name in semiconductors with plenty of upside
Investors have witnessed something of an evolution within the retail trading community that populates Reddit and its r/Wallstreetbets subreddit. The group came to prominence back in early 2021.
It was then that targeted bets and enthusiasm for fading stocks sent GameStop (NYSE:GME) and AMC (NYSE:AMC) soaring in value. Those high-risk trades have made the forum synonymous with a risk-tolerant investing style that many times only equates to extremely risky stock names. Indeed, it’s true that the group began with highly risky investments. Its founder, Jaime Rogozinski, created the forum for people to discuss high-risk trades in an unapologetic way.
But these days it’s becoming more and more common to find highly stable, risk-averse names trending on Reddit. That’s something of an evolution. The good news is that those investors are still seeking the same thing: Short-term gains. And they’re seeking those gains in names that are less risky. In other words, the bottom is much less likely to fall out of these stocks than some of the stocks trending from a year earlier. Let’s jump into these steady, but full of upside stock names to consider in Q2.
|LFG||Archaea Energy Inc.||$22.72|
|TD||The Toronto-Dominion Bank||$80.48|
|ON||ON Semiconductor Corporation||$59.59|
Reddit Stocks That Could Soar: Archaea Energy (LFG)
Archaea Energy is currently the 14th trendiest stock on Reddit according to Ape Wisdom. Archaea Energy is a Houston-based firm that develops renewable natural gas. That should have investors interested as we enter Q2.
There is currently a demand shift underway that favors natural gas. U.S. natural gas futures reached a nine-week high as experts are now calling for higher demand over the first few weeks of April than previously expected. Further, natural gas futures spiked by nearly 28% in March signaling that Q2 could be a boon to natural gas producers.
Archaea Energy produces renewable natural gas. That means the gas is derived from biogas captured from landfills, farms and wastewater facilities. That captured biogas is then processed into natural gas.
The reason investors should consider LFG stock right now is that there is a fair amount of upside inherent in its shares. It trades below $23 but average consensus prices have it valued at $30.43. Traders are already expecting strong results from increasing Q2 demand, meaning it could be a great time to get in on LFG stock.
Toronto-Dominion Bank (TD)
One of the primary reasons to be interested in Toronto-Dominion Bank is its recent acquisition of First Horizon Corp. (NYSE:FHN). The $13.4 billion deal is the largest in the history of TD Bank. It also expands the U.S. footprint of the Toronto-based bank.
The deal is expected to close in early 2023 and lead to a 10% return on investment in 2023. Once it closes, TD Bank will become the sixth-largest commercial U.S. bank measured by assets. While that news appears to be a positive for TD stock, it probably won’t have a massive effect on share prices in the coming quarter.
But TD Bank should continue to perform well after a strong first quarter. Earnings per share increased to $2.02 from $1.77 a year earlier. That increase came on the back of net income that reached $3.733 billion in the quarter, up from $3.277 billion YoY.
Banks are primed to perform well as increasing interest rates directly benefit their business model. TD Bank is trading well below analyst consensus prices and that means now is a good time to buy.
Reddit Stocks That Could Soar: ON Semiconductor (ON)
ON Semiconductor began 2022 nearly fully priced. It was trading near $71 to begin January. That was very close to its current average consensus price of $73.93. There wouldn’t have been much room for returns at that time. But now that ON stock has fallen below $60 per share there’s reason to consider a purchase.
ON Semiconductor reported record yearly revenues of $6.74 billion a few months ago. That represented 28.3% growth on a year-over-year basis.
The company provides semiconductors to multiple industries. Critically, it supplies the automotive industry and 2022 revenues are anticipated to reach $7.66 billion. ON Semiconductor’s net income nearly quadrupled in 2021. The company is headed in the right direction and could soar once Q1 earnings arrive.
On the date of publication, Alex Sirois 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.