Best Stocks to Buy Now for April 2022

The market continues to slosh around, with defensive sectors remaining bullish, while growth’s “usual suspects” keep being sold. Investing in this kind of environment can make you skittish!

But I’m a bull at heart. I see reasons to be positive. For instance, even among the battered sectors, there is fundamental strength. And positive, recent Big Money action is making me take notice.

Markets and Big Money in the Last Six Months

My research firm, MAPsignals, measures Big Money investor activity. That includes institutions, pension funds, big individual investors, and so on. Our research shows Big Money moves markets.

In fact, we created the Big Money Index (BMI), which is a 25-day moving average of Big Money buy and sell activity. It tends to be a leading indicator of market movement. Here is the BMI over the last six months laid over SPY:

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It’s been volatile this year. But the BMI is trending up of late. Looking deeper, we can see ample amounts of buying and selling underneath the surface:

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Still, defensive sectors are where the bulls continue to run. Energy, utilities, and materials lead the way:

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Notice though how there are still strong fundamental scores throughout, even in lowest ranking sectors. In this kind of market, it’s good to spread the love around. You never know which way the choppiness is headed, or in which direction. So, the top five stocks to buy for April 2022 cover different sectors: ULTA (staples), FANG (energy), TSCO (discretionary), LPLA (financials), and CHKP (technology).

Ulta Beauty Inc. (ULTA) Analysis

Up first is Ulta, which is a growing cosmetics and fragrance retailer.

Even though great stocks can be volatile, like Ulta this year, these companies are worthy of attention. Check out ULTA:

  • Year-to-date performance (-2.0%)
  • Historical Big Money signals

Just to show you what our Big Money signal looks like, have a look at the top buy signals ULTA has made the past few years in the chart below. Blue bars are showing it was likely being bought by a Big Money player according to MAPsignals.

When you see a lot of them, like ULTA has since 2010, I call it the stairway to heaven:

Source: www.MAPsignals.com

But, what about fundamentals? As you can see, ULTA’s sales and earnings outlook are strong:

  • 1-year sales growth rate (+40.3%)
  • 2-year vs. 1-year EPS growth estimate (+9.9%)

Diamondback Energy, Inc. (FANG) Analysis

Next up is Diamondback Energy, which is a fossil fuel exploration and production company.

Check out these technicals for FANG:

  • 1-month performance (+4.2%)
  • Recent Big Money signals

Let’s look long-term. These are the top buy signals for Diamondback Energy since 2012. The Big Money has bought time and again:

Source: www.MAPsignals.com

Let’s dive deeper. As you can see, Diamondback Energy has had rock-solid growth and is reasonably priced:

  • 1-year sales growth rate (+141.6%)
  • Forward price-to-earnings ratio of 6.1x earnings

Tractor Supply Company (TSCO) Analysis

Another name we like is Tractor Supply, which is the largest rural lifestyle retailer in the U.S.

Strong candidates for growth usually have Big Money buying the shares, and TSCO has that. Also, the stock has slid slightly this year, meaning it could be an attractive entry point:

  • Year-to-date performance (-1.0%)
  • Historical Big Money signals

Below are the Big Money signals TSCO has made since 2010. That’s the JUICE!

Source: www.MAPsignals.com

Now let’s look under the hood. Tractor Supply’s sales and earnings growth is impressive. I expect more in the coming years:

  • 1-year sales growth rate (+19.9%)
  • 3-year EPS growth rate (+26.7%)

LPL Financial Holdings Inc. (LPLA) Analysis

Number four on the list is LPL Financial, which is an investment services giant.

Here are the technicals important to me:

  • 1-month performance (+27.7%)
  • Historical Big Money signals

Below are the Big Money signals for LPLA since 2014:

Source: www.MAPsignals.com

Let’s examine a bit more. LPL Financial has been growing nicely:

  • 1-year sales growth rate (+31.5%)
  • 2-year vs. 1-year EPS growth estimate (+51.1%)

Check Point Software Technologies Ltd. (CHKP) Analysis

Our last growth candidate is Check Point, which is a cybersecurity software and consulting firm.

Check out these technicals:

  • 1-month performance (+4.6%)
  • Historical Big Money signals

While CHKP was beaten down in much of 2021, it’s still a high-quality stock, as it’s made the Top 20 report many times since 2010:

Source: www.MAPsignals.com

Now look under the hood. The company has had solid sales growth and the earnings outlook looks good too:

  • 1-year sales growth rate (+4.9%)
  • 2-year vs. 1-year EPS growth estimate (+10.1%)

Bottom Line and Explanatory Video

Best Stocks To Buy Now for April 2022 | Full Stock Sector Rank List

ULTA, FANG, TSCO, LPLA, & CHKP represent top stocks to buy now for April 2022. Strong fundamentals and historical Big Money buy signals make these stocks worthy of extra attention.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds no positions in ULTA, FANG, TSCO, LPLA, or CHKP.

Contact

https://mapsignals.com/contact/

Big Money Loves Check Point

And the cybersecurity firm could soar higher due to strong earnings and a double-digit sales growth estimate. But another likely reason is Big Money lifting the stock.

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Check Point has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals CHKP has made the last year.

The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In the last year, the stock attracted 13 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

Outperformance is important for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Check Point has been growing and profitable. Take a look:

  • 1-year sales growth rate (+4.9%)
  • Profit margin (+37.6%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, CHKP has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

CHKP has a lot of qualities that are attracting Big Money. It’s made this list 34 times since 2013, with its first appearance on 08/13/2013…and gaining 139.59% since. The blue bars below show the times that Check Point was a top pick:

Source: www.mapsignals.com

It’s been a top stock in the technology sector according to the MAPsignals process. I wouldn’t be surprised if CHKP makes additional appearances in the years to come. Let’s tie this all together.

The Bottom Line

The Check Point rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds no positions in CHKP at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

https://mapsignals.com/contact/

 

Top 4 Things Traders Have to Know Today

What is happening with Meta, Paypal and Spotify?

Spotify didn’t actually issue annual guidance, which seems to have exacerbated worries about potential subscriber growth potential. All three were down by double-digits in after hours trading at one point last night.

Competition is clearly much more fierce as larger players are starting to dial it in and use the latest technology to gain better traction i.e. Visa, Mastercard, etc. I also read reports this week that Apple is diving deeper into the payment and banking space and will soon be able to offer all kinds of options via the smartphone.

In simple terms, I wonder if PayPal executives could see they had a “growth” problem and that’s why they took a look at Pinterest a few months back. I heard rumors yesterday perhaps they might be looking at Robinhood.

At the moment the stock market just doesn’t seem real forgiving to those who swing and miss. On a somewhat positive note, Facebook disclosed they purchased back +$20 billion of their own stock in the last quarter.

Bulls are hoping for solid results from Amazon and Snap today to help prevent sentiment in the tech sector from creating more fallout. I’m not holding my breath!

Data to watch

Results are also due from Activision Blizzard, Biogen, Carlyle Group, Check Point, Cigna, Clorox, ConocoPhillips, Deckers Outdoors, Eli Lilly, Estee Lauder, Ford, Hanesbrands, Hershey, Honeywell, Ingredion, Merck, Pinterest, Quest Diagnostics, Royal Dutch Shell, SnapOn, Wynn Resorts, and Xylem.

On the economic data front, Factory Orders, the ISM Non-Manufacturing Index, and Productivity and Costs are due today. Productivity and Costs has become a more closely watched report as worries about climbing wages have grown. In the third quarter, productivity fell -5.2% (the most since 1960) and labor costs rose +9.6%.

Obviously, weakening productivity and rising costs is a bad combo for corporate profits so reversing this trend is a high priority. It may be tough to find much relief in the near-term with the labor market expected to remain extremely tight.

The shortage of workers has also been exacerbated by the latest Covid wave. ADP’s private payrolls report yesterday showed a decline of -301,000 jobs for January versus the estimate for a +200,000 gain, the first reported net job less since December 2020 according ADP.

Covid issue

Most analysts blame last month’s Covid surge for the decline and expect it is just temporary. The official January Employment Report on Friday is expected to show a gain of around +150,000 jobs, though the government has warned that the data won’t be reliable due to Covid-related reporting problems. Hopefully we’ll soon stop hearing that excuse as the Omicron Covid wave does seem to be burning itself out in the U.S. Case numbers across the country are about half of what they were in mid-January.

Hospitalizations have finally started to come down, too, which experts say is a more reliable measure. I hate to mention it but health officials are currently monitoring a mutated strain of Omicron known as “BA.2″… when does it end?

The standoff between Ukraine and Russia

Also still on the radar is the standoff between Russia and Ukraine. The U.S. is now readying to send more than +3,000 troops to bases in Eastern Europe as new satellite images appeared to show an even further increase in Russian troop buildup on Ukraine’s borders. Whether or not war is a realistic threat or not, the climbing tensions continue to stoke the flames in the energy markets.

Brent crude futures are trading near $90 as OPEC struggles to meet production targets and global physical supplies continue to tighten. The 19 OPEC+ countries with quotas underperformed their production targets by -832,000 b/d in December. Russia is currently the top OPEC+ producer, so any disruption to those supplies runs the risk of shooting oil prices even higher. Take note the front-end of the natural gas market is up over +50% in the first month of the new year. It’s certainly going to be a wild ride in 2022!

 

Brace Yourself For Another Wild Month In Stock Markets

For the year, the Dow is down -6%, the S&P 500 is down just over -9%, and the Nasdaq has lost -14.7%. The previous record-holder is January 2009, an ugly moment for the economy, when the stock market fell -8.6%. In addition, the VIX – aka the CBOE Volatility Index – has actually dropped back to around 31 after topping 37 earlier this week, its highest point since November 2020.

Keep in mind, the index isn’t registering anywhere close to levels reached during other periods of “extreme” volatility. For example, the index, which is measured between zero and 100, hit its highest point of almost 83 during the financial crisis in 2008. Its most extreme point during the pandemic was around 66 in March 2020. So, by comparison, this week’s volatility has been rather mild.

Federal Reserve

Some insiders equate the wild swings in stock prices to investors, particularly “big money,” trying to establish a new baseline for stock valuations minus the Fed’s easy money policies that have driven a massive amount of cash into markets since the pandemic began in 2020.

At its height, the Fed was pumping as much as +$120 billion per month into the system via its asset purchase program, ballooning its balance sheet to now nearly $9 trillion.

At the same time, the Fed has held its benchmark rate at near-zero and, before that, hadn’t even attempted to raise rates since 2018, and then only briefly. The last full-cycle of rate hikes was 2015. What’s more, investors haven’t really had to factor for inflation since the early 90s and it hasn’t been this high since the 80s.

Bottom line, whatever the new “normal” ends up looking like, it will be dramatically different from the pre-pandemic investing landscape. I’ve heard several large stock traders saying it seems to be the return of Alpha instead of the race to levered Beta. I hear others on Wall Street referencing it to a bit of league recreational youth baseball team where everybody now gets an award simply for participation, but then kids run into a rude awakening when performance really starts to matter.

It feels like we are there in the stock market; every business that was coming into the market was simply being rewarded with participation points, now people are starting to keep a real scorebook and counting the strikeouts and runs scored.

Economy still roars

The good news is that the U.S. economy continues to roar. Historically, a combination of moderate inflation and moderate interest rates has led to some of the biggest boom times for U.S. Last week, the Commerce Department said Q4 Gross Domestic Product (GDP) grew at an annualized rate of +6.9%, stronger than Q3’s +2.3% and well above Wall Street expectations of around +5.7% growth.

Consumer spending climbed at a +3.3% annual pace led by a +4.7% increase in services spending. But the real stand out was private investment which rocketed +32% higher, boosted by a surge in business inventories as companies stocked up to meet higher customer demand. Rising inventories, in fact, contributed nearly +5% to Q4 GDP growth.

On the one hand, the inventory build is positive because it indicates an easing of supply chain dislocations that should in turn help with inflation pressures. On the other hand, many economists note that the big boost from retailer and wholesaler restocking is not likely to be repeated.

Companies will also likely start to unwind at least some of that inventory in the quarters ahead, which could drag overall 2022 GDP, especially if consumer spending also drops off. And investors are more closely tracking consumer behavior as inflation continues to rise.

With consumer spending accounting for about 70% of the U.S. economy, any signs that belts are tightening or moods are getting overly pessimistic will likely set off some alarm bells.

Data to watch

Turning to next week, it will be another busy one for both key economic data as well as earnings. The main economic data highlight will be the January Employment Situation on Friday. Other key data includes ISM Manufacturing, Construction Spending, and the JOLTS report on Tuesday; ADP’s private payrolls report on Wednesday; Productivity & Costs, Factory Orders, and the ISM Non-Manufacturing Index on Thursday.

Earnings wise, results are due from NXP Semiconductor and Trane on Monday; Advanced Micro Devices, Alphabet, Amgen, Chubb, Electronic Arts, Exxon, General Motors, Gilead Sciences, Match Group, PayPal, Sirius XM, Starbucks, and UPS on Tuesday; AbbVie, Aflac, Allstate, Boston Scientific, CNH, Corteva, D.R. Horton, Ferrari, Humana, Johnson Controls, Meta (Facebook), MetLife, Novartis, Novo Nordisk, Qualcomm, Siemens, Thermo Fisher, TMobile, and Waste Management on Wednesday; Activision Blizzard, Amazon, Biogen, Carlyle Group, Check Point, Cigna, Clorox, ConocoPhillips, Deckers Outdoors, Eli Lilly, Estee Lauder, Ford, Hanesbrands, Hershey, Honeywell, Ingredion, Merck, Pinterest, Quest Diagnostics, Royal Dutch Shell, Snap, SnapOn, Wynn Resorts, and Xylem on Thursday; and BristolMyersSquibb, CBOE, Phillips 66, Regeneron, and Sanofi on Friday.

Bottom line, brace for another huge week of extreme volatility.

Check Point Software Q2 Profit, Revenue Beat Estimates

Chief Executive Gil Shwed said there had been a 93% annual rise in more advanced “Gen V” attacks, particularly ransomware, making them the “new norm”.

“More than 1,200 organisations are hurt each week by ransomware attacks. We see the highest increase in Latin America and Europe, but we see an increase everywhere,” Shwed told a news conference.

To combat the trend the company has combined its technologies that help protect cloud storage systems and corporate and home networks into one suite called Infinity, which Shwed said saw triple-digit quarterly sales growth.

The Israel-based company said it earned $1.61 perdiluted share excluding one-time items in the quarter, upfrom $1.58 a year earlier. Revenue grew 4% to $526 million, withthe company on its way to top $2 billion for a second straightyear. It was forecast to earn $1.56 a share on revenue of $523.8million, according to I/B/E/S data from Refinitiv.

For the third quarter, it sees revenue of $515-$540 million and adjusted earnings per share (EPS) of $1.54-$1.64. Analysts have forecast EPS of $1.58 on revenue of $527.9 million.

Check Point kept its full-year estimates for revenue of $2.08-$2.18 billion and adjusted EPS of $6.45-$6.85, compared with 2020 results of $2.07 billion and $6.78 respectively.

The company said it bought back 2.7 million shares in thequarter worth $325 million as part of its share repurchaseprogramme.

(Reporting by Ari Rabinovitch; Editing by Kirsten Donovan)