After a rough 2022 full of geopolitical instability and skyrocketing inflation, the concept of stocks to buy for the new year may have appeared imprudent just a few weeks ago. However, the equities sector generally responded well, encouraging investors to take a shot.
Fundamentally, a few notable indicators suggest it may be time for intrepid market participants to consider certain stocks to buy. For one thing, the pace of inflation cooled down, suggesting that the Federal Reserve might not need to be so aggressive with its rate hikes. As well, China recently reopened its economy, boding well for the broader sentiment. While not all risks have been eliminated, and circumstances can always go awry, if you’re feeling confident about a recovery, these are the stocks to buy.
|WPM||Wheaton Precious Metals||$45.97|
|DAL||Delta Air Lines||$39.22|
Wheaton Precious Metals (WPM)
Wheaton Precious Metals (NYSE:WPM) saw a frustrating performance for much of 2022. Although inflation skyrocketed last year, assets such as gold and silver continued to diminish in value. That was strange because inflation typically bolsters critical commodities. However, WPM is on a tear now, gaining over 14% of equity value since the January opener.
Much of this enthusiasm centers on aforementioned China’s reopening measure. With analysts targeting greater global economic activity, they anticipate higher energy prices. Such a dynamic also implies increased economic activity. In turn, both consumers and industries will consume resources, driving up the pricing for critical commodities. Since silver plays an important role in multiple industries including solar, demand may continue rising.
Naturally, that’s going to bode very well for Wheaton. Unsurprisingly, Wall Street analysts peg WPM as a consensus strong buy. Also, their average price target of $52.24 implies an upside of over 12%, making WPM one of the stocks to buy.
One of the biggest oil firms in the world, Chevron (NYSE:CVX) covers all segments of the energy value chain, from upstream (energy and exploration) to midstream (storage and transportation) to downstream (refining and marketing). With China reopening, its ravenous consumer base could easily drive up hydrocarbon prices. Combined with the specter of intensified military conflict in Europe, CVX seems an ideal play among cynical stocks to buy.
Further, Chevron may enjoy its own domestic catalyst. Recently, entertainment giant Disney (NYSE:DIS) effectively put an end to remote operations. In my opinion, it’s more than likely that other top enterprises will follow suit. Frankly, it’s too difficult for organizations to hold their workers accountable in a remote ecosystem. Therefore, the busy morning commute will return, benefitting Chevron. Currently, analysts rate CVX as a consensus moderate buy. As well, their average price target of $193.94 implies an upside potential of over 8%. Combined with the oil giant’s forward dividend yield of 3.17%, Chevron makes for a solid idea for stocks to buy.
Even the optimists that find the positive in everything must recognize reality with Amazon (NASDAQ:AMZN). It just plain stunk up the field in 2022. In fact, in the trailing year, AMZN gave up 30% of its equity value. Unfortunately for stakeholders, rising inflation did a number on consumer sentiment, which fell to all-time recorded lows. However, the narrative could be changing in 2023.
Since the Jan. opener, AMZN returned over 13%. Further, e-commerce as a percentage of total retail sales – a statistic that peaked in the second quarter of 2020 – finally started to rise again from Q1 of last year. While the shock of inflation hurt consumers at the time, a year has now passed. Having become acclimated to the economic new normal, e-commerce may surge once again.
Significantly, Wall Street hasn’t given up on AMZN as one of the stocks to buy. Presently, analysts rate Amazon as a consensus strong buy. Also, their average price target stands at $131.90, implying an upside potential of nearly 36%.
International Paper (IP)
If Amazon does manage to become a veritable name among stocks to buy, then investors should keep close tabs on International Paper (NYSE:IP). Let’s be real: International Paper isn’t going to win any prizes for the most exciting investment anytime soon. However, the company represents one of the world’s top producers of fiber-based packaging and pulp. Thus, if e-commerce goes on the upswing, so should IP’s business.
To be sure, the narrative for IP doesn’t center on explosive gains per se. Since the January opener, shares only gained less than 3%. Rather, it’s about owning an anchor just in case the waters get choppy. Currently, the company carries a forward yield of 5.09%, well above the material sector’s average yield of 2.82%. Also, while its payout ratio is a bit elevated at 65%, it’s not horrifically so.
To be fair, Wall Street doesn’t like IP, rating it a consensus moderate sell. Also, the covering analysts’ price target implies a downside of nearly 7%, more than negating the dividend. Still, TipRanks reports that sentiment among hedge funds pings as positive. This might make IP one of the stocks to buy.
Given the horrible circumstances endured last year, it’s no surprise that few folks want to touch CarMax (NYSE:KMX). With used-car prices declining, auto dealerships can no longer make a killing – at least not like what we’ve seen. Further, with the Fed spiking the benchmark interest rate to combat inflation, affordability became a problem. This all culminated in KMX dropping over 38% of its equity value.
So, why bother including KMX as one of the stocks to buy? Fundamentally, cars represent necessary transportation platforms. As stated earlier, with remote work possibly coming to an end, people will need to hit the road. Therefore, CarMax feeds a critical need.
To be sure, Wall Street also doesn’t care for KMX, rating it a consensus hold. Also, analysts’ price target implies more than 8% downside from here.
Nevertheless, one final point: with the average age of vehicles on U.S. roadways hitting a record 12.2 years, the car might make the decision on a replacement purchase, not the consumer. For the daring, KMX may be one of the stocks to buy.
Delta Air Lines (DAL)
Almost three years ago, Delta Air Lines (NYSE:DAL) and its peers faced an existential crisis. With a mysterious pandemic circulating the globe, few wanted to be in enclosed spaces with strangers. Suddenly, busy international airports turned into veritable ghost towns. Such a circumstance might never happen again. And 2023 may end up symbolizing the pivot to bullishness for DAL.
Specifically, experts believe that business travel will rebound this year. If you think about it, it makes sense. Fewer people cite the coronavirus as a debilitating fear. Also, companies now demand their workers return to the office. And meet-and-greets with clients have long been a part of the modern professional ecosystem.
Moreover, Delta apparently ranks as the best airline for business travel according to a 2022 survey. Plus, analysts weighed in optimistically for DAL, rating it a consensus strong buy. Also, their average price target stands at $50.54, implying over 28% upside potential. Thus, it’s an intriguing pick for stocks to buy.
Waste Management (WM)
If you really believe in the entire value chain of 2023’s bull market, then you should consider Waste Management (NYSE:WM). A self-explanatory organization, Waste Management should be one of the biggest downwind beneficiaries of this unexpected economic enthusiasm. After all, more demand equates to more consumption. And more consumption leads to more waste.
Like animal slaughterhouses, the business of managing waste is a dirty but necessary one. Just because you throw garbage in the trashcan doesn’t mean the garbage magically disappears. Some entity has to do something with the waste that we produce on a daily basis. Therefore, WM represents one of the stocks to buy because of its undeniable and inevitable relevance. Just as well, Wall Street experts have a positive view on WM, rating it a consensus moderate buy. Also, their average price target stands at $169.73, implying nearly 11% upside potential. That’s not bad for an otherwise boring but steady name among stocks to buy.
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.