These potent tendencies should provide investors with fantastic returns in April and beyond.
It’s challenging to crack the “best stocks” buying code. In April, investors might take advantage of a few new trends to improve their chances.
Strong trend lines that should provide owners with market-beating returns this month and moving forward include artificial intelligence (AI), breakthrough weight-loss drugs, high-yield dividend equities, and electric vehicles. Here are five equities that, in light of this background, stand out as strong buys for April.
AI has swiftly emerged as a key topic among growth investors as a result of ChatGPT’s introduction. Via expediting medication research, assisting in the creation of driverless vehicles, and potentially even producing Star Trek-level technologies like autonomous surgical robots, AI’s quickly developing capabilities could radically disrupt civilization over the coming years. The options are limitless. This continuing AI revolution may be significantly influenced by Nvidia (NVDA 1.44%), a provider of graphics, computing, and networking solutions.
This theme is already being recognized by investors. As of this writing, Nvidia’s stock has soared almost 90% since the year’s beginning. The fundamental justification is that Nvidia’s cloud software and services have the potential to play a crucial role in the future AI world. Nvidia isn’t precisely a stock for pure-play AI, but it is anticipated to be a cornerstone of the global AI infrastructure. This fact is encouraging for the company’s long-term prospects.
Small-cap biotech Viking Therapeutics (VKTX -3.92%) has an incredible value proposition. Two medications being developed by the business for metabolic disorders, VK2735 for obesity and VK2809 for nonalcoholic steatohepatitis (NASH), have the potential to revolutionize their respective disciplines.
In a recent modest, early stage experiment, VK2735 was successful, sending Viking’s stock skyrocketing. This quarter, VK2809 will undergo an essential mid-stage readout in NASH, which could propel the biotech’s stock to new heights.
In the grand scheme of things, VK2735 and VK2809 are aiming for markets with a combined value of more than $100 billion. The current market capitalization of Viking is a pitiful $1.3 billion. In other words, the market hasn’t yet added any form of premium to the stock of the drugmaker.
The fundamental cause is that, in terms of development, both of these experimental medications lag far behind the field and still carry a sizable degree of risk until VK2809’s mid-stage readout. In spite of this, VK2735 and VK2809 have the potential to be the greatest drugs in their class for the indications they are being used, making this stock an attractive speculative buy this month.
It looks that Madrigal Pharmaceuticals (MDGL 3.22%) will be the first business to get a NASH drug approved by the Food and Drug Administration (FDA). The biotech recently achieved a resounding victory in a late-stage experiment for the prevalent liver disease, paving the way for a regulatory submission for the selective thyroid hormone beta-receptor agonist resmetirom later this year.
Wall Street estimates that the annual sales of this medicine, if approved, might reach a modest $5 billion. This amount has been pegged at more optimistic predictions of north of $9 billion annually. In any case, Madrigal’s stock, with a $4.53 billion market cap, would be absurdly cheap. After all, a purchase of this mid-cap biotech would probably fetch a premium following an FDA approval of resmetirom in the NASH scenario.
Medical Properties Trust
A healthcare real estate investment trust is Medical Properties Trust (MPW 2.24%). (REIT). Rising interest rates and issues with important tenants not being able to pay their rent have put significant pressure on the company’s shares over the past year. These challenges have made Medical Properties Trust a top target for short-sellers. But it seems as though the trend is turning.
The sale of 11 hospitals in Australia has caused the share price of the healthcare REIT to increase by 9.5% over the last week. This sale generated revenue for Medical Properties Trust of about $818 million (at current exchange rates). The company intends to use these proceeds to quicken the deleveraging process that is already in progress.
Medical Properties Trust has a staggering 14.4% dividend yield in addition to its modestly improving fundamentals. In light of the challenging operating environment, bears have argued that this dividend may need to be cut, but even a modest cut would probably still result in the company paying a top-flight yield. Because of this recent weakness in the REIT’s share price, bargain hunters and those looking for passive income may want to profit from it.
In the nascent electric vehicle market, Tesla (TSLA 6.24%) commands a commanding market share. Tesla’s unmatched technology and purpose-built facilities will most likely keep it ahead of its rivals for the foreseeable future, despite efforts by legacy automakers like Ford to play catch-up by investing billions in electric vehicles and next-generation battery technology.
In more detail, Wall Street analysts believe Tesla’s significant investment in new production facilities in Berlin and Austin, Texas, will result in increased production efficiencies, expanding margins, and ultimately, a disproportionate share of the highly-growing electric vehicle market once the sector reaches its peak value.
Analysts are hopeful that the company’s extensive use of AI in its research and development efforts will result in additional operating efficiencies in the future and boost its profitability over time.
Bottom line: Tesla’s extensive competitive moat and unrivaled innovative engine are two excellent reasons to purchase and hold this electric vehicle stock in April.