The stock market has been off to a rough start in 2018, with many speculating about a potential crash or a bear market. On closer inspection, though, it seems clear that the market is simply undergoing a typical correction in the wake of an earlier bull market. This is a natural trend and part of stabilizing the market for further investment – and makes it safe for investors to start wondering what stocks are good contenders for spring investments.
Many Americans are anticipating tax refunds in the wake of the April 15 filing deadline, with those who qualify for a range of tax credits receiving greater refunds overall. These refunds can provide the financial foundation for investment in the stabilizing market.
Looking ahead to refund time, these stocks look to be strong spring prospects. Where will you invest your refund?
Biotech buys
The recent correction has been tough on biotech, but don’t count these stocks out just yet. Rather, in the coming weeks and months, keep an eye on Celgene (CELG, Financial), Incyte (INCY, Financial), and Vertex Pharmaceuticals (VRTX, Financial) as you consider where to invest your tax refund.
Celgene, for example, had a poor showing in late 2017, but sales of Otezla, their psoriatic arthritis drug, have since increased and the company is planning to acquire the rest of Juno Therapeutics (JUNO) to reduce competition for their cancer drug, Revlimid, which will go generic in 2022. Acquisitions are almost always good news for stock prices, so you’ll want to invest before the Juno acquisition is finalized.
An Olympic spike
The Olympics just ended, and several sporting brands received significant publicity during the course of the games, Nike (NKE, Financial) being one of them. That publicity is good for stock prices and while Nike performed well in 2017, its March 22 earnings report will ultimately set the pricing framework for the coming year. Right now, analysts expect an earnings increase of 17% this year but will set that number higher if that report is strong.
Disney debuts
Much like smart acquisitions can increase stock prices, so can new internal products. That’s exactly what market watchers are expecting from Disney in coming months, making this spring a great time to buy. In particular, Disney – which is already a diversified brand – is planning to launch a streaming product in the second quarter of 2018. The baseline launch will still be fairly bare bones, leaving Disney with plenty of room to grow and room for stock prices to increase.
Entering virtual reality
Finally, it’s should be no surprise to any savvy investor that virtual reality stocks are on the rise right now, regardless of overall market trends. Part of what’s so exciting about the virtual reality world, though, is that some of the major players, such as Facebook (FB, Financial) and Google, now known as Alphabet (GOOGL, Financial), made their names in other fields.
If you’re not financially positioned to invest in Facebook or Google (and certainly most of us aren’t there), you might consider putting your tax return towards Activision Blizzard (ATVI, Financial). Though not fully committed to virtual reality as a brand, Activision Blizzard is behind major gaming projects, including projects for Sony’s Playstation VR, and that could help position the brand as a leader as other industries, such as manufacturing and health care, to try to bridge the gap to AR/VR integration.
The stock market still has a few weeks to shake off the early 2018 correction and prove this isn’t a bear market, but analysts seem confident that things will stabilize soon. That means investors should be looking at perfect conditions to buy just as their refunds arise.
Disclosure: I do not own any of the stocks mentioned in this article.
