The month of December has begun on a positive note for the stock markets. Optimism over the COVID-19 vaccine, a decisive victory for Joe Biden, and better-than-expected corporate earnings have fueled the upbeat sentiment. It is quite likely that the month will end with a bigger than usual ‘Santa Rally.’ The rise in stock prices in the week between Christmas and New Year is popularly known as the ‘Santa Rally’…
In an interview with CNBC, Fundstrat’s head of research, Tom Lee, indicated that he foresees a strong rebound in the economy and potential for fiscal stimulus. He is also optimistic that the stock market would finish the year strongly.
The momentum in economic activity during the holiday season will support the bullish trend further. Another reason why we could see a huge uptick in trading volume during the end of December is the listing of Tesla (TSLA) on the S&P 500 index. The stock, with a capitalization of over $500 billion, is likely to be the largest company to be added to the index. The listing is slated to take place on December 21st.
Some of the other large-cap companies that investors can consider buying ahead of the ‘Santa Rally’ are Alphabet, Inc. (GOOGL), Walmart Inc. (WMT), Visa Inc. (V), and Berkshire Hathaway Inc. (BRK.B). With solid fundamentals and multiple growth catalysts, these stocks are poised for big gains.
Alphabet, Inc. (GOOGL)
GOOGL as a search engine commands a 90% share of the global market. The company also has a lot of other businesses such as YouTube, Google Play, and its Smart Home speakers. GOOGL’s path-breaking businesses like Waymo, a self-driving car company, as well as its Life Sciences business, Verily, also have immense prospects.
GOOGL’s revenue during the third quarter ended September 2020 increased 14% year-over-year to $46.2 billion. Its revenue was led by an uptick in the advertising revenue. YouTube’s ad revenues rose by 32.6% in the third quarter. At the end of the third quarter, YouTube Music and YouTube Premium had a combined paid subscriber base of over 30 million. Meanwhile, the company’s EPS for the third quarter jumped 62% year-over-year to $16.40.
Analysts expect revenue for the quarter ending December to be $53.1 billion, up 15.2% year-over-year. Meanwhile, EPS is likely to grow at 16.5% per annum for the next five years.
GOOGL has surged 36.3% year-to-date to end yesterday’s trading session at $1,821.84, quite close to its 52-week high at $1843.83. Over the past six months, the stock jumped 26.5%.
How does GOOGL stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
A for Industry Rank
A for Overall POWR Rating
The stock is also ranked #2 out of 59 stocks in the Internet industry.
Walmart Inc. (WMT)
WMT, the operator of discount stores for over six decades, is a global retailing giant in terms of revenue. Walmart U.S., Walmart International, and Sam’s Club are the company’s three core segments. The various formats a company operates in include hypermarkets, supermarkets, cash and carry stores, warehouse clubs, and discount stores. The company has nearly 11,500 stores and several e-commerce websites under 56 banners across 27 countries.
In a move to boost subscriptions during the holiday season, WMT slashed off the $35 charge for next day delivery for Walmart+ members for most orders except groceries. The company is ramping up investment to…
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