4 High-Beta Stocks to Buy for a Year-End Rally

The stock market has experienced an unabated rally so far this year, fueled by a torrent of monetary and fiscal stimulus and strong corporate earnings. The S&P 500 has climbed 20%, registering seven straight months of gains and more than…

50 highs along the way.

Though investors are concerned about the economic impact of the COVID-19 Delta variant, if vaccines remain effective in minimizing severe cases that lead to hospitalizations and deaths, the adverse effects of the current COVID-19 surge are expected  to be limited. According to The Conference Board’s Economic Forecast, the economy is expected to witness a steady rebound in the second half of the year on the back of improving consumer spending, a boost in inventories as the holiday period approaches, and continued government support. Furthermore, UBS boosted its year-end S&P 500 forecast to 4650, backed by solid growth activity, solid earnings momentum, and higher fiscal spending.

Given this backdrop, we think it could be wise to bet on high-beta stocks because  they tend to perform better than the benchmark indexes in a bull market. As such, quality high-beta stocks Moderna Inc. (MRNA – Get Rating), Microchip Technology Incorporated (MCHP – Get Rating), Sasol Limited (SSL – Get Rating), and OneWater Marine Inc. (ONEW – Get Rating) could be ideal bets to cash in on the bullish market trend.

Moderna Inc. (MRNA – Get Rating)

Biotechnology company MRNA develops messenger RNA-based medicines and vaccines to treat infectious diseases, immuno-oncology, rare diseases, cardiovascular diseases, and auto-immune diseases. The Cambridge, Mass.-based company is known primarily for its COVID-19 vaccine sold under the brand name Spikevax.

This month, MRNA announced that it had begun seeking approval from the  U.S. Food and Drug Administration (FDA) for  a booster dose of the Moderna COVID-19 vaccine (mRNA-1273) at the 50g dosage level. The company plans to submit data to the European Medicines Agency (EMA) and other regulatory agencies worldwide in the coming days.

MRNA’s revenue increased significantly year-over-year to $4.35 billion in the second quarter, ended June 30, 2021. Its operating income came in at $3.06 billion, versus  a 122 million operating loss  in the prior-year quarter. The company reported $2.78 billion in net income compared to a $117 million net loss in the second quarter of 2020. Its EPS amounted to $6.46, compared to a $0.31 loss per share during the same period last year.

A $29.69 consensus EPS estimate  for the current year represents a 1,614.8% improvement year-over-year. The $20.28 billion consensus revenue estimate for the current year represents a 2424.6% increase from the same period last year. Over the past year, the stock has gained  678.3% in price. Also, it has gained 304.8% year-to-date. In addition, the stock has a 1.48 beta.

MRNA’s POWR Ratings reflect this promising outlook. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

MRNA is also rated a B grade for Growth, Quality, and Value. Additionally, within the Biotech industry, it is ranked #34 of 508 stocks.

To see additional POWR Ratings for Stability, Momentum, and Sentiment for MRNA, click here.

Click here to checkout our Healthcare Sector Report for 2021

Microchip Technology Incorporated (MCHP – Get Rating)

MCHP develops, manufactures, and distributes semiconductor devices for various embedded control applications across America, Europe, and Asia. The Chandler, Ariz., company provides general-purpose 8-bit, 16-bit, and 32-bit microcontrollers; 32-bit embedded microprocessor markets; and specialized microcontrollers for automotive, industrial, computing, communications, lighting, power supplies, motor control, and wireless connectivity applications.

This month, MCHP launched the industry’s most…

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