3 stocks that beat the market to buy in December for more growth

3 stocks that beat the market to buy in December for more growth

The bullish reaction to Jay Powell’s speech sent the S&P 500 above its 200-day moving average for the first time since April. Wall Street bulls held firm on Thursday and Friday, although some selling returned after a strong jobs report in November.

Traders are currently putting an 80% chance that the Fed will raise its key rate by 0.50% in December to between 4.25% and 4.50%, according to the CME tool FedWatch. Two-year U.S. Treasury yields, which largely reflect where Wall Street expects the fed funds rate to end, hovered at 4.27% on Friday afternoon from 4.47% on Tuesday. and 4.74% in early November.

Despite the unknowns, Wall Street is telling investors they don’t see the Fed needing to do much more after its December hike. The market also has a much clearer picture of the bearish earnings outlook for FY23. % in 2023.

These figures, although not adjusted for inflation, hardly mean that the US economy is heading for a major economic slowdown. Wall Street is often well ahead of Mainstreet. Therefore, it’s no big surprise that stocks rebounded strongly in the first two months of the fourth quarter.

Investors looking to buy stocks to start December have many attractive options. Here are three highly ranked Zacks stocks that crushed the market in 2022 and are also poised to post strong growth next year.

Halliburton HAL

Halliburton is a benchmark in oilfield services that operates throughout the lifecycle of a project. Halliburton’s products and offerings help oil and gas companies in everything from exploration and well construction to abandonment activities. Halliburton, like many others in the broader oil and energy sector, has benefited from soaring prices in 2022.

The Russian invasion of Ukraine has hampered global oil and gas supplies, forcing many countries and companies to reassess the status quo. Other exploration and drilling projects are underway in the new race towards greater energy independence. Moreover, it is clear that oil and gas will play a huge role in the global economy for years to come, even as alternative energies gain traction. All this should boost Halliburton.

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Halliburton’s third-quarter adjusted earnings more than doubled year-on-year to beat Zacks’ estimates. CEO Jeff Miller believes that “structural demand for more oil and gas supply will provide strong tailwinds” for the company. Zacks estimates that its revenue will grow 33% in 2022 to increase its adjusted earnings by 94%.

HAL is expected to continue on this path with sales up 17% in 2023 and additional profits of 41%. Haliburton’s outlook signals growth and stability, with many of its oil and energy peers expected to post year-over-year declines in 2023.

Halliburton’s upward earnings revisions help it land a No. 1 Zacks rank (Strong Buy) right now. Additionally, its industry ranks in the top 12% of more than 250 Zacks industries, and its dividend yields 1.3%. Halliburton’s stock soared 65% in 2022, which includes a huge drop and almost as big a comeback.

Halliburton’s Zacks mid price target offers a 20% upside from Friday’s levels. HAL is trading at a 25% discount to its industry at 13.2 times forward earnings. It also marks a 20% reduction from its own five-year median. Additionally, 11 of Zacks’ 14 brokerage recommendations are “solid buys,” along with two “buys” and one “hold.”

VICI Properties Inc. I won

VICI Properties is the real estate investment trust behind Caesars Palace Las Vegas, MGM Grand, Venetian Resort Las Vegas, and more. The Company’s diverse portfolio of casinos and resorts includes more than 40 gaming facilities, as well as more than 450 restaurants, bars, nightclubs and sportsbooks.

VICI’s portfolio also includes nearly 60,000 hotel rooms, as well as four championship golf courses and 34 acres of undeveloped and undeveloped land adjacent to the Las Vegas Strip.

Most recently, VICI announced on December 1 its intention to purchase the remaining 49.9% stake in the MGM Grand Las Vegas and Mandalay Bay joint venture from Blackstone to bring them under full control of VICI.

The deal is expected to close in the first quarter of 2023 and comes after VICI closed its $17 billion deal to buy MGM Growth Properties in April 2022. VICI is now a true casino, resort and convention giant .

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VICI’s 2021 revenue jumped 23% to $1.5 billion, while its adjusted FFO, which investors may consider earnings, jumped 11%. Zacks estimates predict his revenue will grow 70% in 2022 to $2.57 billion, then grow another 19% in 2023.

Meanwhile, its adjusted FFO is expected to grow 5% this year and 8% in 2023. These projections do not include the recently announced deal with Blackstone.

VICI lands a Zacks Rank #2 (Buy) at the moment and 14 of the 15 brokerage recommendations Zacks has for VICI are “Strong Buys”. On top of that, VICI’s dividend is yielding 4.6% to top its industry average of 4.4% and blow out the 10-year US Treasury’s 3.5%.

Shares of VICI have soared 60% in the past three years to explode its industry and top the S&P 500. VICI has risen 13% in 2022 and is still trading below its Zacks average price target.

The stock is trading not too much above its three-year median at 16.4x 12-month forward earnings and at a 30% discount to its industry. Its valuation levels are in line with its industry despite its outperformance. And VICI recently surpassed its 50-day moving average.

WR Berkley Corporation WRB

WR Berkley is an insurance holding company that is one of the largest business line writers in the USWR Berkley became a Fortune 500 company in 2004 and joined the S&P 500 in 2019.

WRB’s primary focus is insurance for businesses and high-value homes, vehicles and collectibles. WR Berkley prides itself on being able to offer bespoke solutions to a range of clients ranging from architects and engineers to life science and technology companies, as well as bars, restaurants and just about anything you could imagine.

Zacks estimates predict that WR Berkley’s revenue will grow 15% in 2022 and another 10% in 2023, thanks to rising rates and a thriving business model.

WR Berkley’s adjusted earnings are expected to climb 26% and 10.5%, respectively, over that same period. The insurer’s higher premiums show up in its better earnings outlook for fiscal 22 and 23, earning it a Zacks No. 1 (Strong Buy) rating.

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Zacks Investment Research

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WRB stock is up 45% in the past 12 months, versus 14% in its sector. This run is part of a 145% rise over the past 36 months to blow its industry 38% and the S&P 500 55%. WRB is also trading at 16X 12-month future earnings at the moment, which is a 40% discount to its industry’s 25.6X and offers value compared to the S&P 500’s 18.1X.

WR Berkley’s balance sheet is strong and it has a proven track record of delivering consistently strong earnings. WR Berkley also pays a dividend and buys back its own shares.

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