U.S. Stocks. Which ones to Buy in 2023?

U.S. Stocks. Which ones to Buy in 2023? short-term mutual funds

In 2023, the U.S. economy should enter a recessionary phase. No one knows exactly when that will happen, maybe in the third quarter of the year or maybe in the second. It is important to understand that as long as there is a recession entering, the market will not rise, and will probably continue to fall.

Investors need to understand two other things. The recession will end sooner or later and recovery will begin. And stock markets always start to recover a few months earlier than the economy. That is, if the recession peaks in the 3rd quarter of 2023, the market will turn around and start rising in the 2nd.

You have to be prepared for that. We sold US stocks last year before all the lockups, set aside cash for future purchases, and opened a brokerage account in Kazakhstan. For now, we follow developments, analyze American companies, and collect promising ideas in a separate file.

In this article, we will share 3 top ideas from our list that will help you navigate the American market.

Lululemon Athletica

If you are tired of trading AAPL stock option prices and are looking for something new, this company is the best option. The largest company that sells sportswear and accessories worldwide. It was founded in 1998 as a seller of yoga products.

Financial Results in 2022

For the full year 2022, Lululemon expects revenue growth of 26-27% and earnings growth of 27-28%. By 2026, the company plans to reach $12.5 billion in revenue. If the plans come to fruition, the average annual revenue growth will be 15%. For comparison, from 2016 to 2021, this figure was 24%.

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The company's high business growth rate can be attributed to the effectiveness of its "Power of Three x2" strategy, which aims to double digital sales and menswear sales and quadruple international revenue.

Investment valuation

Lululemon's P/E (ratio of company price to earnings) is 36.97 with an industry average P/E of 26.27. And while the company is highly valued within its sector, none of its competitors can boast of such a high growth rate. Also, Lululemon's average valuation before the 2022 general correction was always around 60. News about the company can be found at letizo.com.

The Fundamental Driver for the Stock’s Growth is Business Growth

Lululemon's financial metrics: CAGR, the compound annual growth rate; PEG, the financial ratio comparing the stock price to earnings per share and the company's expected future earnings.

Netflix

A leading Internet entertainment service, and provider of multi-genre movies, TV series, TV shows, and other streaming-based content. So the company would be a great alternative to the AAPL daily stock price.

Netflix Financials

Analysts believe Netflix will see a 7% increase in revenue and a 14% increase in net income in 2023. Business growth will continue through the launch of special subscriptions with reduced cost and advertising, a gaming division, and third-party services such as Fast Laughs for watching snippets of movies and TV shows, the movie news site Tudum and others.

Investment Valuation

The current P/E valuation of 25 is several times lower than previous values with an average valuation above 60. This is because the company was hit hard in 2022 due to news of a drop in user numbers - the stock was down 75% in the moment. Now they have recovered a bit, but are still below their highs by almost 60%.

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From this investment valuation point of view, Tesla's after hours stock price could also be interesting today.

Schlumberger Limited

The world's leading provider of reservoir characterization, drilling, production, and refining technologies for the oil and gas industry. The company is not a direct oil producer, but an oilfield services company with a focus on providing related equipment.

The company can be promising for a lot of factors:

  • it benefits from increased oil production and expansion of production by oil producers;

  • Demand for oil will grow amid OPEC+ restrictive measures, which try to curb increases in petroleum product prices by increasing oil production and the overall demand for fossil fuels due to the longer development of alternative energy sources.

  • The oilfield services industry will grow as oil producers will make good money and be able to finance the maintenance of current installations and the development of new fields. Previously, many companies could not afford this because they did not have enough money due to low oil prices.

  • The company is profitable, efficient, and looks like one of the best in the industry.

But in parallel, we recommend looking at Tesla stock prices today per share, an interesting tool for investors.

What Conclusions can be Drawn?

In 2023, there are steep entry points into the U.S. market for investors. It would be a shame to miss this moment. To understand whether an investment is right for you, you need to study the company's full analytics and "try on" the idea for your own situation and attitude to risk.

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