Special Report

The Top 11 Stocks for 2023

The United States is grappling with serious problem: runaway inflation.

High inflation coupled with rising Treasury yields around the world and a Federal Reserve that’s trying to rein in inflation by hiking key interest rates has led to very bad year for the U.S. economy and the stock market.

As a result, investors have been hit hard, and that pain is unlikely to abate anytime soon with key interest rates set to remain high for the foreseeable future.

While I’m sure this isn’t what you want to hear, there is some good news…

If you’re invested in the right stocks, you can still make money in this inflationary environment.

Historically, growth stocks and dividend stocks are your best defense against rising inflation. The reality is that stocks are great inflation hedges because they represent ownership in real businesses.

Even better, great businesses function as inflation “pass through” vehicles. An inflation “pass through” vehicle is a business that “passes along” the price increases that result from inflation.

The nominal price of inputs and product prices might change, but the businesses’ profit margins do not. They simply “pass through” the inflation, which allows their profits and market values to rise along with prices.

Of course, you don’t want to invest in just any stock. You want the best of the best… the companies whose growth won’t be curtailed by inflation and will continue to boast strong earnings and sales growth.

In this report, I’m going to show you 11 companies that have emerged as the crème de la crème that you should buy in 2023.

With strong sales growth and profits ahead, these stocks are must-haves for your portfolio as we navigate our way through this inflationary environment…

Top Stock for 2023 #1: ATKR

Since its founding back in 1959, innovation has been at the heart of Atkore, Inc. (ATKR).

In fact, the company patented the Flo-Coat galvanizing process, which applies zinc as tubes and pipes are being manufactured. The process has been the foundation of Atkore’s manufacturing process since its first single tube mill opened its doors in 1960.

Today, Atkore is a leading manufacturer of galvanized steel tubing and pipe products, including electrical conduits, flexible sprinkler pipe and light gauge steel tubes. The company’s products are sold under several brand names: Allied Tube & Conduit – the company’s original name – as well as FlexHead and Tectron Tube. Atkore also produces electrical support system products under the Unistrut, Power-Strut and Cope brand names, as well as other electrical cables, conduits, PVC and cable protection products.

Atkore offers a portfolio of electrical raceway and mechanical products and solutions used by more than 50 end markets. This includes agriculture, commercial construction, industrial and power generation, as well as federal, state and local governments. And Atkore services its customers through 65 manufacturing and distribution facilities around the world.

Shares of the company soared more than 7% higher following the company’s stunning results for its third quarter in fiscal year 2022. Third-quarter adjusted earnings jumped 53.3% year-over-year to $6.07 per share, while sales increased 24.4% year-over-year to $1.06 billion. The consensus estimate called for adjusted earnings of $5.22 per share on $1.01 billion in sales, so Atkore posted a 16.3% earnings surprise and a 5% sales surprise.

Looking forward, Atkore now expects full-year sales growth of 32%. Full-year adjusted earnings per share are forecast to be between $20.89 and $21.24, up from $12.98 per share in fiscal year 2022.

Top Stock for 2023 #2: BP

BP p.l.c. (BP) is a familiar name to most, as the company has been around for more than 100 years.

Back in 1901, William D’Arcy risked his fortune to drill for oil in Persia (present-day Iran). But it wasn’t until late May in 1908 when oil actually spewed from a “last chance” well in a remote area of Persia. One year later, the Anglo-Persian Oil Co. was in business.

Over the years, the Anglo-Persian Oil Co. was on the verge of bankruptcy several times, as oil exploration in Persia was slow and plagued with delays. If that wasn’t discouraging enough, the company had a hard time selling the thick Persian oil. That’s when Winston Churchill, in 1914, entered the picture, as he was looking for a dedicated oil supply for the British Royal Navy, which he led at the time.

The United Kingdom became a major shareholder in the company.

After that, the “BP” oil brand became a familiar sight, as BP gasoline pumps started popping up all over the United Kingdom to keep up with the rise in vehicles hitting the streets in the 1920s and 1930s.

The company took a hit during World War II like many businesses, and then another hit when Iran nationalized oil operations. But the company didn’t throw in the towel. It changed its name to The British Petroleum Co. in 1954 and started looking for other oil exploration opportunities.

Today, BP has a vast portfolio of upstream and downstream businesses around the globe and operates in 70 countries. The company engages in oil and natural gas exploration, field development and production. It produces 3.6 million barrels of oil equivalent per day.

BP also manufactures fuels, lubricants and petrochemicals. The company has been at the forefront of alternative energy, investing in biofuels, biopower, wind energy and solar. And it operates more than 18,000 retail sites.

Elevated natural gas and crude oil prices added to the top and bottom lines for the company in its most recent quarter – and, in turn, the company upped its dividend by 10%. BP’s earnings more than tripled year-over-year, coming in at $8.45 billion. That also represents the company’s second-highest earnings in its history, and it topped analysts’ estimates for $6.8 billion.

Top Stock for 2023 #3: CF

CF Industries Holdings, Inc. (CF), one of the biggest fertilizer companies in North America, has been in business for more than 75 years. From humble beginnings as a fertilizer supplier to regional agriculture customers in Illinois, where it’s still headquartered, CF Industries has grown to operate five nitrogen manufacturing plants in the United States, as well as two plants in Canada, two plants in the United Kingdom and one in Trinidad.

Elevated natural gas prices have been a bit of a headwind for the company, but CF Industries still produced 5.1 million tons of ammonia in the first half of the year. In turn, it also achieved earnings of $2.05 billion, or $9.78 per share, in the first six months of 2022. For full-year 2022, CF expects ammonia production between 9.5 million and 10.0 million tons.

CF Industries is scheduled to release third-quarter results on November 2. Third-quarter earnings are expected to surge to $3.41 per share, up from a $0.86 per share loss in the same quarter a year ago. The analyst community has lowered estimates slightly in the past three months, but, clearly, CF is anticipated to post blowout earnings results. Third-quarter revenue is forecast to come in at $2.35 billion.

Top Stock for 2023 #4: CLFD

One corner of the market that has continued to expand, despite the global pandemic, is 5G.

To review, 5G is the next generation of internet infrastructure and connectivity. With 5G, download speeds could be between 10 and 100 times faster than what’s currently available. All of the big wireless carriers, including Verizon, AT&T, Sprint and T-Mobile, are vying for the fastest network, and all released some form of 5G last year.

However, I’m not interested in the big wireless carriers. I see more opportunity in a company that’s designing and developing the fiber-optic platform to enable 5G connectivity.

Clearfield, Inc. (CLFD) started operations as APA Enterprises with the acquisition of fiber-connectivity operations from Americable and Computer System Products in 2003. But, by 2007, the Minnesota-based company changed gears (and names!) and reinvented itself as a leading provider of fiber-optic management, protection and delivery products.

The company’s “fiber to anywhere” platform was designed to not only meet the needs of broadband service providers, but also to cut down on the costs associated with the deployment, management, protection and scalability of fiber-optic networks. Clearfield’s game-changing Clearview Cassette is the building block of its FieldSmart product portfolio of cabinets, enclosures, panels and wall boxes. All of which are designed with flexibility, service and network migration capabilities.

Recently, Clearfield introduced the StreetSmart Small Count Fiber Hand-Off Box, which was developed to streamline a provider’s ability to extend fiber networks even further into the network at a more economical price. The product is expected to support not only 5G network rollouts, but also the rollout of fiber-to-the-premise (FFTP) and wireless access services.

With 5G spreading across the country, from urban city centers to rural areas, it’s not surprising that Clearfield has seen strong demand for its products – or that it posted record results recently.

Shares soared after the company smashed analysts’ expectations for its third quarter in fiscal year 2022. Third-quarter revenue jumped 84% year-over-year to a new record of $71 million, which beat estimates for $54.57 million. Clearfield’s backlog also rose 16% quarter-over-quarter to $157 million.

Third-quarter earnings soared 109% year-over-year to a record $12.7 million, or $0.92 per share, compared to $6.1 million, or $0.44 per share, in the same quarter a year ago. Analysts expected third-quarter earnings of $0.66 per share, so Clearfield posted a 39.4% earnings surprise.

Thanks to the stunning third-quarter results, Clearfield also increased its full-year revenue outlook. Revenue is now forecast to increase between 72% and 75%, or $243 million to $247 million.

Top Stock for 2023 #5: COP

ConocoPhillips (COP) is one of the largest independent oil and natural gas exploration and production companies in the world. The company does a little bit of everything when it comes to those products, extracting with hydraulic fracturing, horizontal drilling and offshore drilling, as well as producing and transporting the product.

In fact, ConocoPhillips has an extensive energy portfolio that spans 14 countries. The company transports oil and natural gas around the world through pipelines, as well as tankers, trucks and rail. And at the end of 2021, it had 6.1 billion barrels of oil equivalent in its reserves. As a result, ConocoPhillips benefited immensely from rising crude oil prices in 2021 – and I suspect its upcoming earnings report will reveal the company continues to prosper.

The company topped analysts’ earnings estimates for its second quarter and boosted its return of capital plan. First, in the second quarter, adjusted earnings surged 200% to $5.1 billion, or $3.91 per share, compared to $1.7 billion, or $1.27 per share, in the same quarter last year. Analysts expected adjusted earnings of $3.85 per share.

The company also increased its return of capital plan by $5.0 billion, which brings it to $15 billion.

ConocoPhillips reported producing 1,692 million barrels of oil equivalent during the second quarter, or a 6.5% year-over-year increase. The company realized a price of $88.57 per barrel in the quarter, up 77% from $50.03 in the second quarter of 2021.

Top Stock for 2023 #6: ENPH

Enphase Energy, Inc. (ENPH) developed the first microinverter system back in June 2008. Microinverters are vital to solar panels, as microinverters convert sunshine into usable electricity for homes and businesses. So, it’s not too surprising that Enphase Energy has installed more than 1 million of its microinverters.

In the past 12 years, Enphase has shipped more than 23 microinverters around the world. The Silicon Valley company now has more than 6.5 gigawatts DC of its systems installed in 130 countries.

During the second quarter, Enphase Energy shipped 3.35 million microinverters, which translates to 1,213 megawatts of DC, as well as 132.4 megawatt hours of Enphase IQ Batteries. In turn, the company achieved total second-quarter revenue of $530.2 million, topping estimates for $504.53 million.

Enphase also achieved second-quarter earnings of $1.01 per share, up 101.9% from the $0.53 per share reported in the same quarter a year ago. The analyst community expected earnings of $0.84 per share, so Enphase Energy posted a 20.2% earnings surprise.

Looking forward to the third quarter, Enphase anticipates that it will ship 130 to 140 megawatt hours of Enphase IQ Batteries. So, it expects third-quarter revenue between $590 million and $630 million, which is nicely higher than analysts’ current estimates for $548.79 million.

Top Stock for 2023 #7: ICL

Based in Israel, ICL Group Ltd. (ICL) is one of the top global producers of bromine, potash and phosphates, as well as the only provider of polysulphate. The company is No. 1 in bromine production worldwide and the largest producer of phosphorous-based flame retardants in the West. ICL Group also has a 24% share of the global phosphates market, and it is a top producer of soluble phosphate-based fertilizers.

With 42 facilities in 13 countries and 20 research and development centers around the world, ICL Group’s products are utilized by several key industries, including agriculture, food and industrial.

ICL operates primarily out of four main businesses: Industrial Products, Potash, Phosphate Solutions and Innovative Ag Solutions.

In 2021, the company achieved record earnings and sales in its Industrial Products and Phosphate Solutions businesses, with 29% annual sales growth and 25% annual sales growth, respectively. ICL Group’s Potash business experienced 43% annual sales growth, thanks to strong global crop demand. And its Innovative Ag Solutions business saw sales surge 70% year-over-year to $1.25 billion, thanks to strong results from its two Brazilian acquisitions.

Thanks to increased demand and elevated prices for specialty minerals, ICL was able to overcome inflationary pressures and supply-chain constraints during the quarter. Company management commented, “all of our specialty businesses achieved new quarterly results records, as all four of our divisions contributed to our significant growth and new ICL record sales and EBITDA.”

Thanks to strong demand and elevated commodity prices, the company achieved stunning results for its second quarter. Total sales jumped 78% year-over-year to $2.88 billion, topping estimates for $2.81 billion. Adjusted earnings surged 456% year-over-year to $751 million, while adjusted earnings per share soared to $0.58. Analysts expected adjusted earnings of $0.53 per share.

Top Stock for 2023 #8: KEYS

Keysight Technologies, Inc. (KEYS) is a leading technology company that helps its engineering, enterprise and service provider customers accelerate innovation to connect and secure the world. Its solutions help bring electronic products to market faster at a lower cost. Its customers work in communications, aerospace and defense, automotive, energy, Internet of Things (IoT), data centers, semiconductor and general electronics end markets.

Keysight Technologies boasts that the Top 25 tech companies rely on its solutions and services. The Silicon Valley company also has more than 30,000 customers, including big names like Apple, Amazon, Google, Microsoft, Facebook, NVIDIA, Taiwan Semiconductor, Tesla and NASA, in more than 100 countries around the world, and it has more than 3,500 issued or pending patents.

Keysight has three main businesses:

  • The Communications Solutions Group provides radio frequency and microwave test instruments, as well as electronic design automation software tools.
  • Electronics Industrial Solutions offers design and design verification tools, as well as general purpose, test and management products.
  • And the Services Solutions Group provides repair, calibration and consulting services.

But what really has me excited about Keysight right now is the company’s involvement in 5G. Company management is committed to helping its customers adapt to 5G technology through its design and test solutions, ensuring its customers’ products meet current cellular standards.

During fiscal year 2021, Keysight Technologies achieved total orders of $5.36 billion, or an 18% year-over-year increase. Full-year revenue grew 17% year-over-year to $4.94 billion, while earnings rose 28.5% year-over-year to $6.23 per share. Company management noted that its results were driven by strong demand for its 5G, aerospace and defense, government, semiconductor measurement, automotive and energy solutions.

Thanks to “exceptional” third-quarter results, the company upped its outlook for fiscal year 2022. During its third quarter in fiscal 2022, orders rose 12% year-over-year to $1.46 billion and total revenue increased 10% year-over-year to $1.38 billion. That topped analysts’ estimates for revenue of $1.35 billion.

Third-quarter earnings grew 27% year-over-year to $363 million, or $2.01 per share, compared to $286 million, or $1.54 per share, in the same quarter a year ago. The consensus estimate called for earnings of $1.78 per share, so Keysight posted a 12.9% earnings surprise.

Looking forward to the fourth quarter in fiscal year 2022, Keysight expects revenue between $1.38 billion and $1.40 billion and earnings per share between $1.94 and $2.00. That’s up from revenue of $1.29 billion and earnings of $1.82 per share in the fourth quarter of 2021. For fiscal year 2022, the company expects to achieve 9% annual revenue growth and 20% annual earnings growth.

Top Stock for 2023 #9: MATX

Based in Honolulu, Matson, Inc. (MATX) is a leading Pacific Ocean region transportation services company. Its fleet of containerships, as well as roll-on/roll-off ships and barges, haul vital commodities to not only Hawaii, Alaska and Guam, but also to Micronesia, the South Pacific, China and Japan. And its logistics business offers freight forwarding, warehousing, highway brokerage, rail intermodal and supply-chain services.

The company topped analysts’ earnings for a fifth-straight quarter. It achieved second-quarter earnings of $380.7 million, or $9.49 per share, which represented a 134.3% increase from $162.5 million, or $3.71 per share in the same quarter a year ago. The consensus estimate called for earnings of $9.38 per share.

Top Stock for 2023 #10: MRO

Marathon Oil Corporation (MRO) was founded primarily as an oil production company (Ohio Oil Co.) back in 1887. For the first 90 years, the business operated as an integrated oil company. But since the refining business was spun off in 2011, Marathon Oil has operated as an independent exploration and production company.

The Houston-based company operates primarily in the United States, with facilities and wells in the nation’s top four oil-producing basins: Eagle Ford, Bakken, STACK/SCOOP and the Permian Basin.

Marathon Oil has 32 gathering and treating facilities in South Texas’ Eagle Ford, as well as operates a 42-mile natural gas pipeline. The company has also operated in Bakken since 2006, with 25 wells and 124,000 barrels of oil equivalent per day produced in the fourth quarter. In Oklahoma, Marathon has the majority of its acreage in the SCOOP and STACK, with four wells in operation. And in the Permian Basin, the company operates on about 135,000 acres, with 22,000 barrels of oil equivalent per day produced in the fourth quarter.

In addition, Marathon has operations in Equatorial Guinea, where it has an LPG processing plant, gas liquification operations and methanol production operations. Average production has been about 61,000 barrels of oil equivalent per day.

Second-quarter revenue jumped 101.5% year-over-year to $2.3 billion, and adjusted earnings surged 500% year-over-year to $1.32 per share.

Top Stock for 2023 #11: NRT

Back in 1975, North European Oil Royalty Trust (NRT) was formed to manage royalties from the German subsidiaries of Exxon Mobil and Royal Dutch Shell. The trust holds the royalties, which are paid on a quarterly basis and derived from natural gas, oil and sulfur sales in northwestern Germany.

The company reported earnings results for its third quarter in fiscal year 2022. Thanks to higher gas prices for both of its royalty agreements, NRT achieved total third-quarter royalty income of $4.44 million. That represented a 200% year-over-year increase from $1.48 million in the third quarter of 2021.

There’s Always a Bull Market Somewhere

To steal a quote from Jim Cramer, “There’s always a bull market somewhere” – and right now the bulls are piling into fundamentally superior stocks that will profit from runaway inflation. The 11 top stocks we discussed today fit this description to a “T” and are great bets for your money in 2023.

I hope you found this special report useful. Before we go, let me remind you that you’re now also a member of my free Market 360 newsletter.

In Market 360, we discuss a variety of topics, ranging from the latest happenings in the markets to updates on stocks, earnings, exciting new trends and much, much more. Keep an eye on your email inbox for my next Market 360 article soon. I typically send them every Tuesday, Thursday, Friday and Saturday. In the meantime, you can check out the Market 360 archive by clicking here.

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Sincerely,

Signed:
Louis Navellier