It’s hard to believe we’re already a quarter of the way through 2024. So far, it’s been a solid year for equities, but the first week in April was the worst performance since October 2023. You’ve probably heard a lot of conversation about this being a “stock picker’s market.” That simply means you may have to work a little harder to find stocks to buy.
One proven way to profit in a stock picker’s market is to look for stocks that are getting upgraded by analysts. This can be particularly true when the upgrades are supported by bullish movement in the stock. If you catch this run-up early enough, there’s still time to ride it higher.
That’s the case for the three stocks in this article. They are from very different sectors. And the bullish case for each is not the same. But a case does exist, and that’s why you they could be stocks to buy or put on your watchlist as earnings season kicks off.
Micron Technology (MU)
The current super cycle in semiconductor stocks has many investors wondering what stock may be the next Nvidia (NASDAQ:NVDA)? If you’re one of them, Micron Technology (NASDAQ:MU) is one to consider. The rapid rise of artificial intelligence applications is creating the need for high bandwidth memory (HBM).
Micron is a leader in the category and its new High Bandwidth Memory 3E (HBM3E) solution that launched in February sets up the company to continue to capture market share. This is especially true because the HBM3E chip will be embedded into Nvidia’s newest H200 graphic processing units (GPUs).
In the last two quarters, Micron has turned around year-over year (YOY) declines on its top and bottom lines and even with MU stock moving over 111% higher in the last 12 months, it’s likely that the stock price doesn’t fully price in the strong earnings growth expected in the next 12 months.
MU stock started to pull back around $128 per share. However, with 32 analysts giving the stock either a Strong Buy or Buy rating, any pullback is a buyable dip.
FedEx (FDX)
The bullish case for making FedEx (NYSE:FDX) one of the second quarter stocks to buy boils down to controlling the controllables. The shipping company can’t do anything to stimulate consumer demand. The company is winding up its long-standing contract with the United States Postal Service (USPS) which is shifting its business to United Parcel Service (NYSE:UPS).
But it can manage costs. And investors saw evidence of that in the company’s March earnings report. The company had a slight miss on the top line, but it beat earnings expectations. And earnings were also higher YOY. At least 19 analysts have either reiterated their Buy (or equivalent) ratings or raised their price targets for FDX stock.
FedEx stock is up more than 9% in the last month with much of those gains coming since the earnings report. The stock has pulled back a little since the beginning of April, but this looks like a buyable dip. Analysts consensus price targets give the stock 14% upside and 18 out of 30 analysts have either a Strong Buy or Buy rating on FDX stock.
Williams-Sonoma (WSM)
Williams-Sonoma (NYSE:WSM) is a retail stock that also falls into the consumer discretionary category that has been beaten down in the last year. But Williams-Sonoma has been an outlier. WSM stock is up 164.5% in the last 12 months. But there’s reason to believe there’s still room for the stock to move higher.
For starters, the company’s business model targets a more affluent demographic. Not only have these consumers continued to spend on their homes, but they’re also generally not as sensitive to inflation. That’s good for Williams-Sonoma’s operating margin which was 20.1% when the company reported earnings in March.
WSM stock has received approximately 13 upgrades in the last 20 days. However, the stock has a consensus Hold rating. But if you take the long view, the stock is up more than 463% in the last five years. You also get a growing dividend with a very safe payout ratio of around 24%.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
