According to my calculations, as of the market close on Feb. 7, the Nasdaq had risen over 20% from its 52-week low, meeting the technical definition of a bull market. Specifically, the exchange closed at 12,113.79, 20% above its 52-week low of 10,088.83. And not very far from the technical definition of a bull market was the S&P 500, which closed 19.3% above its own 52-week low of 3,491.58. With stocks seemingly launching or nearly launching a new bull market, investors should be on the hunt for the best bull market stocks to buy.
Of course, sometimes the market “gets over its skis,” climbing to levels that are not justified by reality. That happened, for example, in 2021. But as Barron’s explained recently, “the market..sees…easing financial conditions, an economy in good shape, and moderating inflation.”
And, in my opinion, that’s what it should be seeing because that’s what the data says is happening. However, the publication implies that the market’s liftoff is not justified because the Fed won’t be inclined to lower interest rates this year.
But, as I’ve said previously, the economy, companies, and stocks can still do well even if the Fed is raising rates, as long as the economy’s fundamentals are strong and the Fed’s rate hikes are moderate and don’t push rates to highly restrictive levels.
With interest rates still at historically average levels and the Fed widely expected to hike only another half of a percentage point this year, those conditions appear to have been met.
Meanwhile, the market has failed to recognize the huge opportunities that the following stocks have, and they fell tremendously during the bear market, leaving them very well-positioned to jump 500% or more during this bull market.
Bull Market Stocks: Darling Ingredients (DAR)
The demand for sustainable aviation fuel will soar tremendously in the next 25 years. Bloomberg has reported, “Thirty-eight of the world’s top airlines have committed to net-zero emissions, either by 2050 or earlier. Furthermore, almost 30 have set some form of SAF adoption target, like 10% of fuel consumption by 2030. And the news service pointed out that SAF production “remains scarce.”
Enter renewable diesel producer Darling (NYSE:DAR). The company announced on Jan. 31 that Diamond Green, its current joint venture with Valero (NYSE:VLO), would invest $315 million in a SAF project. As a result, Darling’s joint venture will be able to produce about 235 gallons of SAF annually at its renewable diesel plant, which is currently operating in Port Arthur, Texas.
Meanwhile, the demand for renewable diesel itself is soaring, driven by “California’s Low Carbon Fuel Standard.”
Given these points, Darling’s joint venture is poised to deliver huge profits by 2026, launching DAR stock 500% higher.
A recent article in Wired, entitled “China’s Xpeng G9 Could Be the Best Electric SUV Around,” has increased my bullishness on Xpeng (NYSE:XPEV) and XPEV stock.
Among the attributes of the SUV that Wired found very impressive were its extra features, such as the “massage function” of the front seats, and its spaciousness. On the charging front, the P9 really stands out, as its battery can be increased from 10% charged to 80% charged in only 16 minutes, and the battery can acquire 125 miles of range in just five minutes.
When it comes to autonomy, the P9 is extremely impressive. As InsideEVs explained in November, the EV is the first “unmodified mass-produced vehicle” to be allowed to operate as an autonomous robotaxi in China. And, although Wired did not get to try the P9’s autonomous system, it explained that it ” is said to make automated driving and parking in a variety of circumstances easier than ever.” The system is slated to be available in most urban areas in China by the end of this year.
Meanwhile, XPEV recently launched the P9 in four northern European countries, where I believe that the EV will make a huge splash. With XPEV, in the coming years, likely to gain market share in China, become a major player in Europe, and start robotaxi services in many areas, XPEV stock is poised to soar over the long term.
Archer Aviation (ACHR)
How much would wealthy people –who aren’t quite rich enough to afford frequent helicopter rides — pay to avoid sitting in the huge amount of traffic that afflicts most large American cities? The answer to that question is a tremendous amount.
That’s why I’m very upbeat about the outlook of Archer Aviation (NYSE:ACHR) and ACHR stock. Archer has developed electric air taxis that can transport four people, in addition to a pilot, 60 miles while traveling 150 miles per hour. The air taxis take off and land like helicopters.
Notably, multiple factors strongly indicate that Archer will be a winner. First of all, United Airlines (NASDAQ:UAL) is partnering with Archer, and the companies have already announced their first route. Also validating Archer is its partnership with Stellantis (NYSE:STLA). Under the deal, the automaker, whose components include Fiat and Chrysler, will help build Archer’s aircraft and will invest $150 million in the company.
Additionally, last month Archer CEO Adam Goldstein bought 39,526 shares at an average price of ~$2.54, and CFO Mark Mesler bought 20,000 shares at an average price of ~$2.63. Seeking Alpha noted.
Finally, the FAA has preliminarily approved the design of Archer’s air taxi.
As I indicated earlier, the demand for renewable diesel is jumping. Indeed, according to agricultural economist Dan Basse, who heads AgResource, an agricultural research firm, “Renewable diesel demand has soared in the last year. It’s a big deal. You can see this industry building out very, very quickly, and this is going to be important for the years ahead,”
In addition to Darling, which I discussed above, Bunge (NYSE:BG) is very well-positioned to benefit from the soaring demand for renewable diesel. That’s because, a year ago, Bunge launched a joint venture with Chevron (NYSE:CVX) to produce the raw materials used to create renewable diesel. Specifically, using cash contributed by CVX, the capacity of two of Bunge’s soybean processing plants was doubled.
Showing how strong the demand for soybeans for use in renewable diesel is becoming, the Department of Agriculture reported that out of 25.7 billion pounds of soybeans produced by the U.S. in 2021-2022, 11.5 billion pounds were used for biofuels, including renewable diesel. That was up from 9.1 billion pounds during the previous year.
BG stock has a very low forward price-earnings ratio of just 8.4.
Bull Market Stocks: American Superconductor (AMSC)
I’ve been touting American Superconductor (NASDAQ:AMSC) for many years. Since January 2021, however, the shares have sunk, tumbling from a peak of $24.72 to as low as $3.20.
But the Street is warming up to this revolutionary company, benefiting greatly from the economy’s increased reliance on electricity and greater interest in strengthening America’s electric grid.
The company reported its fiscal third-quarter results on Feb. 2 and held its earnings conference call on Feb. 3. On Feb. 6, the following trading day, AMSC stock soared 20% on much higher than average volume and reached its highest level since March 2022.
One positive catalyst that produced the considerable gain was likely CEO Dan McGahn’s optimism about the company’s Resilient Electric Grid, or REG, system. According to AMSC, REG “can transmit up to 10 times more power than conventional cables” and enables the size of electric substations to take up 50%-75% much less space than traditional electric systems, making it much easier to build power stations in urban areas. REG also makes blackouts less probable by allowing substations to provide power to each other, unlike existing technology.
On the earnings call, McGahn reported that REG was fully functional at the first site at which it was deployed in Chicago and had officially met all the requirements of Exelon’s (NASDAQ:EXC) ComEd, the utility that is utilizing it.
The CEO added, “We continue to see strong desire from this utility, as well as others, to further deploy Reg into the power grid….and it’s clear to me that utilities are thinking about Reg as a viable product.” Moreover, he reported, “Everything that we see, everything that we’re told, everything we’ve been shown, leads us to believe that there’s a very bright future for Reg in many, many cities in the country.”
Wall Street is also likely pleased by the company’s decision to reduce its workforce, resulting in annual savings of $5 million for AMSC, whose total Q3 revenue came in at $23.9 million. As a result of the cost-cutting and revenue gains, the company thinks that its gross margin in fiscal 2023 could “approach 25%, versus its Q3 margin of just 2%.
Another longtime favorite of mine whose share price slumped over the last couple of years is BlackBerry (NYSE:BB). But like AMSC, BB stock has performed quite well recently, and one of its products appears to be rapidly growing and poised to make a huge splash in the medium term or the long term,
Specifically, there’s a great deal of evidence that BlackBerry’s in-vehicle software platform, IVY, is ramping up tremendously. In the past, I’ve referred to IVY, which will enable automakers, developers, and others to sell their offerings to consumers using BB’s QNX operating system as an App Store for vehicles.
IVY is catching on in China, the world’s largest auto market. Specifically, Dongfeng, one of the largest Chinese automakers, is incorporating the system into its crossover SUV, Voyah. Additionally, PATEO, a top Chinese auto technology company, has integrated IVY into its ” intelligent Digital Cockpit solution to develop data-driven in-vehicle services.”
And Germany-based Bosch, one of the world’s largest auto-equipment makers, is also developing ” a digital cockpit product using Ivy.”
Although BlackBerry has said that IVY will not generate revenue this year, the street may be beginning to get excited about it since BB stock has jumped 35% in 2023. Also likely helping BB stock is the impressive fourth-quarter results reported by automakers GM (NYSE:GM) and Tesla (NASDAQ:TSLA), indicating that the auto market is going to be stronger than many expected.
Since BB receives royalties each time an auto with its QNX system is sold, it will benefit from the strength of the auto market.
Boding very well for Arrival’s (NASDAQ:ARVL) outlook is recent news from luxury EV maker Faraday Future (NASDAQ:FFIE). Specifically, Faraday announced on Feb. 6 that it had obtained $135 million from investors.
Judging by Arrival’s stock price of 40 cents and its market capitalization of $255 million, many investors think there’s a good chance that the start-up won’t receive the funding that it needs to survive. But unlike FFIE, Arrival has received a huge 10,000 van order from UPS (NYSE:UPS), along with significant financial investments from UPS and Hyundai. Moreover, Arrival is in the commercial EV space, which is much less competitive than the luxury consumer EV space where Faraday operates,
So if Faraday can get a $135 million investment, then I’m extremely confident that Arrival can as well.
Also noteworthy is that Arrival has cut its operating costs to just “$30 million per quarter” and that it has $513 million of cash as of the end of Q3. Given these points, I’m confident that Arrival will have enough cash to produce its EVs. And given its innovative, money-saving approach and top-notch partnerships, I’m confident that the EV maker will thrive over the longer term. Thus, this is among the top bull market stocks to buy.
On the date of publication, Larry Ramer had long positions in BB, ARVL, DAR, TSLA, AMSC and XPEV. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Airline, Consumer Discretionary, Automotive, Battery, Electric Vehicles, Energy, Oil, Renewable Energy, Software, Technology, Travel
Growth Stocks, Undervalued Stocks