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4 Hot Summer Stocks That Will Likely Heat Up Your Portfolio

OTOS Inc. - Tue Apr 2, 11:46AM CDT

Stock markets are beginning to warm up as the summer season edges closer and Wall Street sees slight improvement across all major indexes, led by the Dow Jones following a slow yet motionless three days on the market. 

On Wednesday, March 27, the S&P 500 closed off the day up 0.9%, surpassing the previous week’s record. Similarly, the Dow Jones Industrial Average and the tech-heavy Nasdaq Composite rose 1.22% and 0.51%, respectively during the same trading period. 

Following the steady performance during the last trading week of March, the S&P benchmark index has managed to gain 10% since the start of 2024, while the Dow Jones is up 5.42% and the Nasdaq is already up a robust 11% since the turn of the year. 

Investors on Wall Street are cautiously awaiting key inflation figures that are set to be released on Good Friday, March 29. Markets in the U.S., UK, and Europe will be closed in observance of the religious holiday. 

As seasons are gradually changing, and things begin to warm up, investors are already on the hunt for their top summer stock picks, with some hoping to uncover hidden gems that they can “buy in May and go away.”

Summer Stocks That Will Likely Heat Up Your Portfolio 

There is a shared sentiment regarding the old market saying “Buy in May and go away” which often refers to investors buying stocks with the expectation of muted gains throughout the summer months. 

Although, this might not always be the case. Limited data and research prove the muted performance of specific stocks during the summer months, especially in sectors that typically experience higher consumer support such as airlines, amusement parks, hospitality, food and beverage brands, and a selection of technology and biotech stocks. 

Nonetheless, whether you participate in “buy in May and go away” or not, careful consideration of current market volatility against the backdrop of wider macroeconomic trends should remain key indicators of overall company well-being and stock performance deliverability. 

SunRun 

The residential solar company SunRun (NASDAQ: RUN) was part of the rally experienced during the last several trading days of March. Company stock managed to lead the sector, rising 15% in a single day, and steadily outpacing industry competitors SolarEdge (NASDAQ: SEDG) up 9% and Enphase Energy (NASDAQ: ENPH) up 8% on Wednesday, March 27.

Currently, the company engages in several important activities throughout the supply chain including design, development, sale, and ownership, along with installation services and maintenance of residential solar systems across the U.S. 

Analysts believe that the company could see stronger performance in the coming years, should management decide to begin engaging in solar storage solutions, which has become a major driver of business for other leading competitors such as Fluence (NASDAQ: FLNC), Energy Vault (NYSE: NRGV), and Tesla (NASDAQ: TSLA). 

Since the turn of the year, shares have tumbled by 32%, with the average stock price falling from $19.46 in January to $13.10 by the end of March. Declining performance could be closely related to the company’s underwhelming quarterly performance which saw revenue decline by 15.20%. 

However, investors are taking stock again of SunRun as share prices begin their steady ascend upwards, and as demand for residential solar systems remains high. Solar stocks have seen positive momentum on the stock market in recent weeks, as investors await inflation data and the general confidence of potential rate cuts looming ahead. 

Delta Airlines 

The aviation industry has come under intense scrutiny in recent months after several incidents involving commercial plane maker Boeing (NYSE: BA) following an unused door blowing out of a 737 Max in January shortly after take-off. 

Boeing has since been facing multiple federal-led investigations into the company’s safety practices, including outcry from airline customers, the BBC reported. Boeing CEO Dave Calhoun has since announced his resignation, leaving many speculating over who will replace the top boss at the company in the coming months. 

Despite the wider uncertainty the aviation industry could face in the coming months, Delta Airlines (NYSE: DAL) continues to reaffirm its position as being one of the top commercial airline operators, globally. 

In a recent report by Brand Finance, analysts identified Delta as one of the world's most valuable airline brands, a position the company has held for roughly six years, consecutively. Total brand value has toppled more than $10.8 billion in 2024 following a 21% increase, and after jumping nearly 23% from $8.9 billion in 2023. 

Over the last month, DAL shares have managed to gain 9.4% on the market, a strong performance compared to the Zacks S&P 500 composite’s 2.8% change. Similarly, Zacks Transportation - The airline industry rose 1.6% during the same period, to which Delta belongs. 

On the Boeing front, however, Delta recently said in a Bloomberg article that it’s expecting delays of its order of 737 Max until 2027. Back in July 2022, the company announced an order of nearly 100 Boeing Max 10 jets worth more than $13.5 million. Originally the company was expected to receive delivery as early as 2025, however, this has since been pushed back until a later stage. 

Nonetheless, Delta remains in a strong position, with shares climbing nearly 17% year-to-date, and the company reporting a steady 5% increase in revenue for its recently reported quarter. Delta holds an outstanding externally audited track record, something which has helped it maintain the top spot as one of the most reliable commercial airline operators globally. 

Visa 

Current economic conditions have left many investors to navigate a turbulent market as high interest rates and inflationary pressure against the backdrop of wider macroeconomic downturns have created an environment of continuous uncertainty. 

However, for global payments technology company Visa (NYSE: V) business continues to remain buoyant despite the wider market volatility and consumers pulling back discretionary spending as prices remain historically elevated. 

It’s hard to deny that Visa has continued to march ahead, reporting better-than-expected fiscal 2023 year-end financial results, and recently reporting a solid start to 2024, with revenue already up 9% quarter over quarter. 

For the 12 months ending September 30, 2023, Visa reported a strong return in their overall payments volume, booking more than $12.3 trillion in total payments, a steady increase from $11.6 trillion in 2023 and $10.4 trillion in 2022. 

Additionally, the company reported more than 212.6 billion transactions processed via its network in 2023, an increase of roughly 10% compared to the year before. Another highlight from its 2023 fiscal financial reports is that the company booked $32.7 billion in annual revenues, which was 11% up from the year before. 

Based on quarterly performance, 2024 is looking to deliver similar performance with payments volume up 8% and processed transactions remaining steady with an increase of 9% for Q1. Financials for the first quarter are looking positive, with total net income of $4.9 billion up 17%, and non-GAAP earnings per share climbing to $2.41, boasting an 11% improvement. 

On the stock market, shares have endured some rocky turf, although year-to-date performance sees stocks climbing 7.78%, nearly half of Mastercard's (NYSE: MA) 13.29% YTD performance. 

Although Visa has been reconfiguring its business strategy over recent years, looking to acquire tech and financial startups as a way to innovate its customer and payment experience, the upcoming summer season could help boost its bottom line performance again, especially on the back of higher consumer spending and increased transaction volumes.

First Solar 

American solar panel manufacturer First Solar (NASDAQ: FSLR) is looking hot right now following their better-than-expected fourth-quarter results. The company reported quarterly sales of $1.2 billion, an improvement of $0.4 billion compared to the previous quarter. 

First Solar says that the strong increase in sales was primarily driven by better module sales during the fourth quarter, giving their total net sales for the full year a tremendous boost. The company closed off the year with $3.3 billion in sales compared to $2.6 billion in the previous year. 

For 2024, corporate management expects earnings per share (EPS) to land in a range between $13 and $14, with total net annual sales between $4.4 billion to $4.6 billion. First Solar is setting its eyes on the prize and is rapidly increasing its production output, committing more than $1.1 billion for a new manufacturing plant. 

The new manufacturing plant will help the company increase its footprint within the American market, which is expected to produce over 10 gigawatts of renewable energy annually in the U.S. by 2025. 

First Solar has big plans, and this includes being one of the biggest solar manufacturers in the U.S. and the western hemisphere in the coming years, with a target date as early as next year. 

The company has seen its stocks dip across the market, with year-to-date performance down 2.71%. Fortunately, FSLR had managed to regain its footing throughout March with stocks bouncing back nearly 13%. The recent ups and downs in the stock are likely due to the high-interest environment under which consumers and investors have started backpedaling on their investment in solar units. 

Despite the slow demand, FSLR is expected to benefit from a hefty tax credit in the coming quarter, with credits totaling more than $1.0 billion, which could help them fund their expansion as they plan to become the biggest name in solar energy within the decade. 

Final Thoughts 

While markets remain buoyant, investors should begin factoring in the changing landscape that is expected in the coming months. The possibility of the long-awaited rate cuts could help bolster performance, although there’s still not enough data to support this idea. 

Nonetheless, the coming months could bring new challenges for investors, however, it’s important to consider how long-term strategies could minimize potential short-term risks while maintaining a positive performance level. 

Whether you “buy in May and go away” or not, it’s important to factor in the changing landscape that is rapidly evolving and causing additional turbulence. Perhaps this season brings new insight that can help investors bolster their position on the market, but as with anything, only time will tell. 



 


On the date of publication, Pierre Raymond did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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