Equities

8 Stocks to Watch: GM, Mattel Among Picks for Earnings

Amid geopolitical tensions, Barron's identifies 8 undervalued stocks and Morgan Stanley highlights dividend opportunities in volatile markets.

By Max Weldon

4/17, 01:42 EDT
Corning Incorporated
General Motors Company
Halliburton Company
Honeywell International Inc.
Mattel, Inc.
Marathon Petroleum Corporation
Phillips 66
Rockwell Automation, Inc.
Sherwin-Williams Company
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Key Takeaway

  • Barron’s identifies 8 stocks including General Motors and Mattel as undervalued opportunities amid market volatility due to geopolitical tensions.
  • Morgan Stanley highlights dividend stocks like China Overseas Property for stable income in uncertain times, emphasizing defensive investment strategies.
  • Analysts see AI and energy sectors, with companies such as Corning and Halliburton, as attractive amidst rising oil prices and inflation concerns.

Market Dynamics Amid Geopolitical Tensions

The financial markets are currently experiencing heightened volatility, primarily driven by geopolitical tensions in the Middle East and the resultant spike in oil prices. This situation has led to broader inflation concerns, potentially influencing the Federal Reserve's interest rate decisions. With the S&P 500 showing signs of strain, investors are advised to seek refuge in fundamentally strong businesses that have seen their stock prices decline, presenting a potentially undervalued opportunity. Barron’s research has pinpointed eight stocks, including General Motors and Mattel, that meet specific criteria: their 2024 earnings expectations have been revised upwards or remained stable, and their stock prices have dipped from peak levels, indicating they may have been unfairly punished by the market downturn.

Dividend Stocks in Focus

In response to the market's unpredictability, Morgan Stanley has spotlighted dividend stocks as a strategic defensive move. The firm's analysis underscores the MSCI Asia Pacific ex-Japan High Dividend Index's slight outperformance over its counterpart, driven by a shift towards "Defensive Value" and "Quality Dividend" stocks. This trend is attributed to rising U.S. Treasury bond yields and market volatility, particularly in Asia and Emerging Markets. Morgan Stanley's conviction list includes high-yield dividend stocks like China Overseas Property, China Medical System Holdings, and Bank of China, emphasizing the appeal of reliable income streams in uncertain times.

Sector-Specific Opportunities Amid Volatility

Despite the overarching market volatility, certain sectors are identified as harboring potential for investors. Analysts point to Artificial Intelligence (AI) and energy as areas with investment opportunities. Companies such as Corning, Honeywell, and Rockwell Automation are highlighted for their leverage to AI, while energy stocks like Halliburton, Phillips 66, and Marathon Petroleum are noted for their attractiveness amidst rising oil prices. These sectors are considered to offer a hedge against inflation and geopolitical risks, with energy stocks, in particular, seen as benefiting from the current oil price dynamics.

Street Views

  • Evercore Analyst for Sherwin-Williams (Bullish on Sherwin-Williams):

    "Sherwin-Williams should continue to demonstrate strong pricing power."