With the stock market having one of the worst starts to a year in recent memory, many investors may be hesitant to purchase new investments in February. It will be fascinating to observe whether equities can finally bottom and how investors respond to the most recent Fed meeting and potential rate hikes in March. Combine these stories with the fact that earnings season is in full swing, and you have a recipe for an exciting month ahead.
While there are several complex elements at work in both the financial market and the economy right now, this doesn't mean investors should avoid searching for stocks trading at good values. That is to say, when sentiment is extremely depressed, it may be an excellent moment to stock up on fascinating businesses for the long run.
The following list of the top three stocks to buy in February will allow you to approach this month with confidence and take advantage of whatever the market has to offer.
Apple (NASDAQ: AAPL)
Apple is one stock that investors should keep an eye on in February. The multinational technology firm has such a huge impact on the market indexes that it will give valuable hints about where we may be heading next. Whatever happens to Apple's stock in the near term, long-term investors should see the recent downturn as an opportunity to buy shares of one of the world's greatest businesses at a discount. The company's smartphones, personal computers, tablets, wearables, and accessories are some of the best-selling consumer electronics items on the planet. So, it's easy to picture these gadgets will continuing to sell at breakneck speed.
Apple stock has continued to show year-after-year growth in each quarter, which is a major reason why it has become the most valuable company in the world by market capitalization. Firstly, the firm just unveiled its first-quarter earnings, which showed that Apple exceeded expectations on earnings and revenue, demonstrating that the firm has been able to handle supply chain issues well. Furthermore, Apple's first-quarter sales of $123.9 billion were a new all-time high, up 11% from last year. The company expects the March quarter to be another record-breaker.
Zim Integrated Shipping (NYSE: ZIM)
Zim is an appealing shipping stock that has been benefitting from the aforementioned supply chain issues. Zim Integrated Shipping, a shipping company with headquarters in Israel, runs a fleet and a network of shipping lines that provides international cargo transportation services on all major world trade routes. Following the pandemic, large companies like Alibaba have been using logistics technology from shipping firms such as Zim to help the international trade market return to normal. The additional expense of delivering products has also risen, which is reflected in the earnings of this firm.
Zim Integrated Shipping's Q3 profits of $1.46 billion were its most ever quarterly net income, up 913% year-over-year. Moreover, Zim projected greater levels of earnings in the future. Both of these are indicators that Zim stock is poised to continue delivering equity value. It's also worth noting, that the stock pays a respectable annual dividend of 16.83%, which is especially useful in light of inflation worries.
Deere & Co (NYSE: DE)
Given that bond yields are on the rise in February, it makes sense to examine a high-quality cyclical stock like Deere & Co. The stock has been consolidating for almost an entire year and could be preparing to break out if the market can find a bottom. Deere is the world's largest maker of farm equipment as well as a major builder of construction tools. As a result, it stands to profit from federal infrastructure investment and high agricultural prices. Consequently, in the months ahead, improving demand should ease supply chain limitations. This will allow the firm to meet growing client demand for new and used equipment.
The firm will release its Q1 earnings on February 18th, which might be a catalyst for shares to break out of their current range. In addition, Deere outperformed the market in the fourth quarter, reporting a Q4 EPS increase of almost 70% year over year. This is a positive indicator that the firm's business is moving in the right direction following the pandemic. Finally, a dividend yield of 1.13 percent and a forward P/E ratio of 16.75 suggest that this is just the type of stock to look at in a tough market environment when value may be more popular than development for months to come.