Three Stocks to Watch for the Week of February 20th, 2023

Stocks were little changed last week as mixed inflation data fueled concerns that the Federal Reserve may extend its rate-hiking cycle longer than expected. For the week, the S&P 500 slipped 0.2%, the Dow was essentially flat, and the Nasdaq added 0.6%. 

The week to come will be a shortened one, with markets closed Monday in observance of Presidents’ Day. Nonetheless, it will be packed with economic data. On Wednesday, the minutes from the latest FOMC meeting are slated for release. On Friday, market watchers can expect a pertinent update to the Personal Consumption Expenditures (PCE), the Fed’s preferred gauge for tracking inflation.

Last year was huge for energy stocks, but so far, in 2023, the sector’s performance has been underwhelming. However, several Wall Street pros say the bull market for energy stocks still has room to run after some cyclical funds actually saw investors pull out cash last year.   

“Despite stellar returns in 2022 (+65%), energy sector ETFs still saw -$1.6bn in outflows. We have a favorable view based on valuation, light positioning, and strong commodity & equity fundamentals,” said Bank of America investment strategist Jared Woodard.

With the current conditions in mind, many market participants are seeking to beef up their position in energy with some undervalued tickers. Our first recommendation is an attractive energy name, currently trading at a discount compared to industry peers. 

Matador Resources (MTDR) shareholders can take confidence from the fact that EBIT margins are up from 36% to 60%, and revenue is growing. Earnings are expected to grow by 6.21% per year over the next ten years. MTDR is a good value with a P.E. ratio of 6.5 times compared to the U.S. Oil and Gas industry average of 7.5 times.  

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Expanding international economies, increasing productivity, and improving standards of living are the first indicators of the rise of a new global middle class. Indeed, it seems as if the world’s most dramatic economic growth over the next century will occur outside the U.S. 

For market participants looking to strengthen their portfolios through diversification or create new avenues to explosive growth, international stocks can be an excellent addition. Here are three tickers that are well-positioned to benefit as international economies recover to new heights.    

As a major player in the digital payments space, India’s largest private sector lender, HDFC Bank (HDB), is in a favorable position to benefit from “the war on cash” as the country’s economy continues to develop. The company has over 6,300 branches across more than 3,100 cities and towns. HDB is also a player in the digital payments space and appears poised to benefit from “the war on cash.”

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Warner Bros. Discovery, Inc. (WBD)

Warner Bros. Discovery is a leading global media company T.V. and movie studios. Management’s top priority in the next six months is the relaunch of a consolidated streaming service with live sports content as a central part of the company’s portfolio, including its rights to March Madness, NHL, MLB playoffs, and the NBA.

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