There are multiple signs that inflation is rolling over, while consumer spending remains strong and corporate earnings are beating expectations. Meanwhile, the so-called credit crunch many investors have feared really isn’t materializing. Thus, right now may be an excellent time for investors to find high-quality stocks to buy.
On the inflation front, the Producer Price Index tumbled to its lowest level since January 2021. Regarding consumer spending, JPMorgan (NYSE:JPM) CFO Jeremy Barnum recently reported that “U.S. consumers and small businesses…continue to show resilience and remain on the path to normalization as expected.” Directly contradicting bears’ repeated earnings about companies’ earnings tumbling, large banks reported powerful first-quarter results. Meanwhile, Bank of America stated that 90% of the 30 companies within the S&P 500 reported their earnings last week beat analysts’ average earnings per share estimates. Accordingly, it’s probably safe to say that no credit crunch is emerging, as bank deposits rose during the week that ended on 5 April, and bank loans and leases were flat.
With the macro environment looking great for stocks, the Nasdaq already in a bull market, and the S&P 500 likely to join it by the end of Q2, there are plenty of stocks to buy could skyrocket in the next 12 months. Here are seven of the best such stocks to buy I think fit most investor portfolios right now.
First on this list of stocks to buy for those looking for a nice jump over the next year is XPeng’s (NASDAQ:XPEV).
The Street looks pretty pleased with XPeng’s latest news, as its shares jumped 15% on Apr. 17, alongside the announcement. Specifically, the Chinese high-tech electric vehicle maker introduced a “new platform architecture” to reduce expenses significantly. The new platform will “cut costs on adaptations for advanced driver assistance systems (ADAS) and smart infotainment systems by 70% and 85%, respectively,” Seeking Alpha reported.
Also boding well for XPEV stock was the company’s reportedly strong sales of its core EV models in Norway. Notably, Norway was the first European country to which the EV maker expanded. As a result, I believe the Street is becoming excited about the company’s ability to sell significant numbers of EVs in Europe and, eventually, the U.S.
Also noteworthy, as I pointed out in a previous article, Xpeng “has truly become a global leader when it comes to developing driver-assistance technology” and could launch a very lucrative robotaxi service in the not-too-distant future.
Bionano Genomics (BNGO)
Bionano Genomics (NASDAQ:BNGO) markets Saphyr, a product that, through optical genome mapping (OGM), enables scientists and healthcare professionals to detect structural variants of DNA that lead to diseases. Over the years, Bionano has shown through studies that, by seeing more structural variants than standard tools, Saphyr can enable scientists to develop new treatments for many diseases and diagnose multiple diseases in more patients earlier.
For many months, I’ve written that convincing insurers to cover the use of Saphyr would be a massive game-changer for Bionano and BNGO stock. If healthcare professionals and patients can use the system for little or no cost, many more healthcare organizations would purchase the tool.
Now it appears that, at last, the game-changing news will materialize soon. That’s because the American Medical Association, at its May 2023 meeting, is expected to establish two CPT codes for OGM analysis. Specifically, the AMA’s agenda shows that it will vote on establishing one code for “(genome-wide) analysis for constitutional chromosomal abnormalities using” OGM and another code for “genome-wide analysis for detection of” blood cancers. The AMA states it will publish its decisions regarding these codes by June 2.
My research strongly indicates that the AMA’s CPT codes determine which medical procedures for which healthcare providers can get reimbursed by insurers. For example, very well health, in a November 2022 article, reported that “Insurers use CPT codes to determine how much money to pay providers.” And the U.S. government’s National Institute of Health states that “The CPT descriptive terminology and associated code numbers provide the most widely accepted medical nomenclature used to report medical procedures and services for processing claims.”
PNC Bank (PNC)
PNC Bank (NYSE:PNC), America’s sixth largest bank, reported excellent first-quarter results on April 14. Among the top stocks to buy in my purview right now, PNC’s impressive revenue surge of nearly 20% year-over-year has moved this stock further up the list. Additionally, the company’s net income climbed to $1.69 billion from $1.43 billion during the same period a year earlier.
Notably, PNC bank has been relatively immune to the potential banking crisis that had many investors worried. During the company’s recent earnings release, PNC noted that its average deposits increased 0.3% year-over-year, while its average loan total jumped to $325.5 billion from $291 billion. Indeed, that’s not indicative of a bank facing financial troubles.
Accordingly, like other American banks, PNC is well-positioned to benefit from the on-shoring trend and the continued strong U.S. labor market.
In a note to investors on Mar. 13, Citi named PNC as one of the large banks that will be a “winner” from last month’s banking mini-crisis. Citi described PNC as “attractive.” I agree.
Additionally, the current forward price-earnings ratio of PNC stock, based on analysts’ average 2023 earnings per share estimates, is 8.2-times. Thus, if the company’s 2023 earnings per share comes in 15% above the mean estimate, which I think is possible, and the company’s price-earnings multiple reverts to 13-times, the level at which it was trading in March 2022, PNC stock could surge about 80% above its current levels by the end of the first quarter of next year.
The Street appears to be warming up to Israel’s SolarEdge (NASDAQ:SEDG), which specializes in making inverters used in solar energy systems. Notably, shares of SEDG stock jumped 5% on Apr. 17. This followed initiated coverage by HSBC on 13 April, in which the bank started SEDG with a $271 price target and a buy rating.
One of the top inverter makers in the U.S., SEDG is expected to get a big boost from Europe, according to HSBC. The bank estimated the company’s revenue would grow at a 20% annual clip from 2022 to 2025, making it among the stocks to buy right now.
At the end of March, SolarEdge’s CFO, Ronen Faier, reported that the company was continuing to benefit from “extreme” demand in Europe. Because of the continent’s extremely high electricity prices, solar projects there pay for themselves in only a few years, he stated.
Finally, Billionaire Steve Cohen, a very successful investor, bought SEDG stock in the fourth quarter of last year. That move speaks for itself.
Interactive Brokers (IBKR)
During the pandemic, many American millennials became very interested in buying stocks. In addition to various websites that have discussed the phenomenon, StockTwits has been much more active in the last few years than previously. Of course, that phenomenon is positive for Interactive Brokers (NASDAQ:IBKR).
Indeed, with stocks entering “bull” mode, IBKR’s financial results should start to soar. Additionally, given Washington’s wide-ranging crackdown on cryptos, I think it’s only a matter of time before the value of cryptos plunges again. As a result, many crypto traders will trade stocks instead, lifting Interactive Broker’s results and boosting IBKR stock.
Despite these positive catalysts, shares of IBKR stock are trading at a meager forward price-earnings ratio of just 14.5-times. This makes IBKR among the best stocks to buy for those seeking value in this market.
In an article published a few years ago, I explained that MarketAxess (NASDAQ:MKTX) “owns and operates an electronic trading platform” that enables individuals and firms “to trade corporate bonds and other types of fixed-income instruments worldwide.”
Many individuals do not know how to trade bonds, and MarketAxess allows them to do so quickly.
With inflation tumbling and the Fed, in my view, eager to prevent more banks from running into trouble because of the declining value of bonds they hold, the central bank is likely to start cutting interest rates this summer. Accordingly, since bond prices move in the opposite direction as interest rates, bond prices are reasonably expected to surge. Of course, that phenomenon will benefit MarketAxess because many investors will be eager to invest in any sort of market that’s surging.
MarketAxess could also get a big lift from the coming collapse of cryptos, because some former crypto traders will turn to buy and sell bonds instead.
Last month, despite intense worries over the banking mini-crisis, the company’s total average daily credit volume climbed 4% versus the same period a year earlier. In contrast, its total credit trading volume reached $296 billion. Additionally, the company reported that it had enjoyed “continued strong levels of estimated market share gains across most product areas.”
With all the focus on artificial intelligence, many investors may overlook robots, which are also widely proliferating. Amazon (NASDAQ:AMZN) and Tesla (NASDAQ:TSLA), for example, extensively use robots to perform many of the rote tasks that humans once carried out. The company explains that its “SCARA robots are ideal for high-speed, precision applications such as assembly, pick and place, testing/inspection, dispensing, and packaging processes.”
Japan’s Fanuc is one of the world’s leading robot makers, and is one of the top stocks to buy in this sector, in my view. In the third quarter of 2022, its revenue from industrial robotics jumped to roughly $6.5 billion, from about $5.25 billion during the same period a year earlier. Moreover, in Q3, industrial robots accounted for 43% of its overall revenue, up from 38% in Q2 of 2021. Interestingly, the company reportedly sells over 100 types of robots.
In Fanuc’s fiscal year, which ended in March 2022, its operating income climbed to $2.5 billion from $1 billion the previous year. Finally, FANUY stock has a beautiful enterprise value/EBITDA ratio of just 0.15-times. Thus, given Fanuc’s positive catalysts and low valuation, it’s an excellent stock to buy.
As of the date of publication, Larry Ramer owned shares of BNGO and XPEV. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.