It’s tax time, and if the prospect of filing your Form 1040 has you excited for the refund you will soon receive, then it is time to fire up your brokerage account website and buy some stocks. So, I have identified 10 stocks to buy with your tax refund, and provided brief bullets on these favorite names of mine.
I’m assuming you buy these stocks next week, and focused on stocks that I think have the opportunity to make you some spending money by Memorial Day. Identifying near-term catalysts is crucial when trying to time markets.
1. Barclays (BCS)
Strong results from JPMorgan Chase JPM this morning show the tailwinds lifting profitability at global, integrated banks. I believe the underperformance of U.K. stocks will reverse as 2018 progresses, and Barclays’ strong position on U.K. high streets and in the FTSE 100 lend more upside to the company’s valuation.
2. Frontier Communications (FTR)
Things are percolating at Frontier as M&A website CTFN last week noted that Frontier had hired Evercore to market its Tampa assets. That report followed one in Bloomberg in February that Frontier was looking to divest some or all of the assets in California, Texas and Florida that it disastrously bought from Verizon VZ in 2016. Recent valuations for fiber deals have been quite healthy, and if Frontier uses proceeds from a divestiture to address the $17 billion of debt on its balance sheet, FTR common shares should pop.
3. Gastar Exploration (GST)
With CEO Russ Porter out, I believe it is much more likely that Gastar will look to monetize its holdings in Oklahoma’s hot STACK play. That potential is not reflected in GST’s current price of $0.70 per share.
4. Diamondback Energy (FANG)
Concho Resources’ (CXO) deal to buy RSP Permian (RSPP) for $9 billion in stock has shone a light on the Permian and driven FANG shares to an all-time high in sympathy. I still believe there’s upside in FANG stock if there is another deal in the Permian in the near future — and there will be more than one, in my view. Even in the absence of M&A, $67/bbl WTI crude is incredibly positive for FANG’s margins.
5. Navios Maritime Holdings (NM)
As Navios shares sit near an all-time low, I think they are a buy here on a mean-reversion trade and what I expect will be a firming in dry bulk shipping rates as the we move into the summer months.
6. Applied Minerals (AMNL)
I mentioned Applied Minerals on Real Money a few weeks back and the stock moved 60% the next day. I am still waiting for any developments on the use of the company’s halloysite clay in the next-generation of solid-state lithium batteries (ASSLB) for electric vehicles. Any news would be good news for AMNL shareholders.
7. Tesla (TSLA) (short)
As someone who followed auto stocks on the sell-side for 11 years, Elon Musk’s early morning tweet about positive cash flow at Tesla in Q3 and Q4 made me wonder how bad Q1 and Q2 will be. That sort of cynicism is required, and I would look for Tesla’s first quarter to be much worse than Wall Street expects. Tesla’s Chief Accounting Officer, Eric Branderiz, departed in March, and with a general sense of disorganization over finances — Tesla’s website has this nugget “Q1 2018 Reporting Date: Please stay tuned as date has not yet been set” — I am concerned that Tesla is going to “kitchen sink” in 1Q and 2Q results to try and make the second half look good in comparison.
8. General Motors (GM) (long)
In contrast to Tesla, stronger-than-expected industry sales in the U.S. in March lead me to believe that GM will beat Wall Street’s estimates when it reports first=quarter earnings set for April 26.
9. Volkswagen (VLKAY) (long)
I believe the Volkswagen Supervisory Board’s decision to name Herbert Diess as new CEO is the crucial next step in the company’s transition to an integrated mobility company. Diess left BMW BMWYY for VW after the Dieselgate scandal began to unfold, so is untainted with the horrible management decisions that led to that debacle. He is a hard-charger and will continue to push VW toward autonomous vehicles and electrified powertrains while keeping costs down and reaping huge profits from VW’s strong position in China.
10. Deutsche Bank (DB)
Every dog has its day, and with Christian Sewing replacing John Cryan as CEO, it is time for deep-value investors to re-examine DB’s strong franchises and solid balance sheet.