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7 Hot Stocks to Buy for a Cold Market

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·8 min read
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In December and January, the vast majority of growth stocks tumbled. But although the market has remained weak in February, investors’ overall view of growth stocks appears to have significantly rebounded this month. Consequently, it is quite possible to find many hot stocks that are surging — and likely to keep doing so for the foreseeable future.

Of course, the inflation-resistant sectors that kept delivering strong returns even as the S&P 500 slumped from December to February are still doing very well. With interest rates rising in response to the higher-than-expected January inflation data and increasingly hawkish statements from U.S. Federal Reserve speakers, that makes sense. Consequently, those sectors — principally materials, mining and energy — also boast many hot stocks.

So, what are some of the best hot stocks to buy today? Here are seven:

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

  • Cheniere Energy (NYSEAMERICAN:LNG)

  • EVGo (NASDAQ:EVGO)

  • Cleveland-Cliffs (NYSE:CLF)

  • Luckin Coffee (OTCMKTS:LKNCY)

  • MGM Resorts (NYSE:MGM)

  • Freeport-McMoRan (NYSE:FCX)

  • InMode (NASDAQ:INMD)

Hot Stocks to Buy: Cheniere Energy (LNG)

LNG stock: the Cheniere logo displayed on a phone
LNG stock: the Cheniere logo displayed on a phone

Source: IgorGolovniov / Shutterstock.com

Natural gas prices are spiking in Asia and Europe yet remaining much cheaper in the United States. This discrepancy has greatly benefited Cheniere Energy, one of the largest exporters of natural gas in the States.

Cheniere recently made two big long-term LNG export deals with companies based in China as well as another with France’s Engie. What’s more, due to the current political tensions between the European Union (EU) and Russia — the bloc’s top natural gas supplier — European countries will probably look to make many more deals with Cheniere in the months ahead. China’s huge energy consumption and efforts to cut down on coal make it a natural partner for Cheniere going forward, too.

On Feb. 7, Cheniere announced it had achieved “substantial completion” of a sixth liquefication train at its Sabine Pass facility. CEO Jack Fusco had the following to say:

“With nine total trains across both the Sabine Pass and Corpus Christi projects, the Cheniere liquefaction platform is the second largest in the world, reliably providing our global customer base with clean, secure and affordable energy.”

From the beginning of the year through Feb. 10, LNG stock has jumped 15%. What’s more, over the last 12 months, this pick of the hot stocks has soared around 73%.

EVGo (EVGO)

An EVgo charging station at the Victor Valley Mall in the City of Victorville.
An EVgo charging station at the Victor Valley Mall in the City of Victorville.

Source: Felipe Sanchez / Shutterstock.com

As I’ve explained in past columns on EVGO stock, this company has more fast electric vehicle (EV) chargers in North America than many of its competitors. What’s more, EVGo has made deals with both General Motors (NYSE:GM) and Uber (NYSE:UBER).

Recently, EVGo excited investors by making a deal with a major foreign automaker. Specifically, on Feb. 8, the company announced that it was “selected as the preferred EV charging partner of Subaru of America.” Back in November, the Japanese automaker Subaru (OTCMKTS:FUJHY) unveiled its first EV, the 2023 Solterra EV SUV.

EVGo looks well-positioned to make similar alliances with many other automakers, leaving it poised to grab a large share of the away-from-home EV charging market in the United States.

Between Feb. 7 and Feb. 10, EVGO stock rallied some 20%, despite the market’s tumble due to the higher-than-expected January consumer price index increase. Excitement about the government’s deployment of $5 billion t0 support EV charging appears to be playing a role in the recent rally for the stock.

In any case, the surge for this one of the hot stocks looks set to continue for some time.

Hot Stocks to Buy: Cleveland-Cliffs (CLF)

Cleveland Cliffs (CLF) logo on an iPhone
Cleveland Cliffs (CLF) logo on an iPhone

Source: IgorGolovniov / Shutterstock.com

On Feb. 11, Cleveland-Cliffs reported weaker-than-expected fourth-quarter results. However, the company’s revenue did soar a phenomenal 130% year-over-year (YOY) and earnings per share (EPS) came to an impressive $1.78. On top of that, the full-year 2021 bottom line was a record $3 billion.

What’s more, Cleveland-Cliffs is highly leveraged to auto sales, which should continue to be strong given the popularity of EVs and high-tech vehicles. Also likely to boost auto sales this year is the easing of the chip shortage. CEO Lourenco Goncalves had the following to say:

“With demand on the rebound, particularly in automotive, 2022 is set to be another phenomenal year for profitability at Cleveland-Cliffs. Based on our recently renewed contracts, we are now selling the vast majority of our fixed-price contractual volumes at substantially higher selling prices.”

From Jan. 28 to Feb. 10, shares of CLF stock rallied 26%. The stock has been declining by a few percentage points since the morning of Feb. 11, but that downturn is likely just a small bump in the road. According to MarketWatch, the shares are changing hands at a price-earnings (P/E) ratio of just 3.4.

Luckin Coffee (LKNCY)

close up luckin coffee's logo coffee brand in Shanghai, June 2019.
close up luckin coffee's logo coffee brand in Shanghai, June 2019.

Source: NewsToday / Shutterstock.com

As I pointed out in a recent article, Luckin has settled its fraud charges with the U.S. Securities and Exchange Commission (SEC). What’s more Centurium Capital — headed by a longtime Warburg Pincus alumnus — has become its largest shareholder and is working closely with the coffee retailer.

This company’s Q3 sales doubled YOY. Additionally, it’s developing affordable drinks that appeal to many customers living in China. Meanwhile, as I recently wrote, “The company also appears to be on the verge of emerging from bankruptcy.” In fact, its finances are now totally kosher according to analyst John Zolidis of Quo Vadis Capital.

From Jan. 25 to Feb. 10, shares of LKNCY stock jumped a very impressive 47%. Despite its troubled past, that puts Luckin Coffee in a good light when it comes to the top hot stocks.

Hot Stocks to Buy: MGM Resorts (MGM)

A photo of the MGM logo on the MGM casino building.
A photo of the MGM logo on the MGM casino building.

Source: Michael Neil Thomas / Shutterstock.com

Next up on this list of hot stocks is MGM. Boosted by excitement around the recent legalization of online gaming in New York and lessening fear about Covid-19 in the States, MGM stock rallied as much as 20% between Jan. 24 and Feb. 10.

After the market closed on Feb. 10, MGM also reported Q4 EPS of 12 cents, beating the average analyst estimate. The company’s revenue of $3.06 billion for the quarter was $300 million above the mean estimate as well.

Multiple firms were upbeat on this stock in the wake of its Q4 earnings. For example, Citi now expects its results to be lifted by the rebound in Las Vegas and the other parts of the States. The firm is upbeat on the company’s cost reductions and “asset monetization transactions.” For its part, Jefferies also stated that “The strong upside and capital commentary support our view on MGM with multiple upside drivers, including Las Vegas, BetMGM and share repurchases.”

Finally, the revenue of BetMGM — the company’s online gambling joint venture — soared 500% in full-year 2021 versus 2020. The company plans to expand BetMGM to Illinois in March and into Canada later on in 2022. Although BetMGM is not yet profitable, it’s expected to generate positive EBITDA next year.

Freeport-McMoRan (FCX)

Freeport-McMoRan Stock's Long List of Catalysts Boosts Its Buy Status
Freeport-McMoRan Stock's Long List of Catalysts Boosts Its Buy Status

Source: 360b / Shutterstock.com

Copper miner Freeport-McMoRan is the next entry on this list of hot stocks. As I pointed out in a previous article, this company “should get a big boost from the EV revolution [and] benefit from the electrification of transportation and upcoming enhancements to the electric grid” in the United States. The shares — which soared about 19% from Jan. 28 to Feb. 11 — have likely also rallied due to excitement over the expenditures soon to be unleashed by the infrastructure law. That sentiment should keep FCX stock hot for the foreseeable future.

On Feb. 9, Seeking Alpha reported that worldwide copper inventories had reached “historically low levels.” As a result, copper prices could easily regain the record levels that they reached in October. That would push FCX stock much higher.

Also likely to help keep this name elevated is perception. Many may see FCX as an inflation hedge. Plus, the stock has a still-low P/E ratio of just 14.7.

Hot Stocks to Buy: InMode (INMD)

A photograph of various medical tubes attached to equipment in a hospital.
A photograph of various medical tubes attached to equipment in a hospital.

Source: sfam_photo / Shutterstock.com

INMD stock is the last entry on this list of hot stocks. A developer of “minimally invasive” medical products, Israel-based InMode is growing quickly. What’s more, the company generates strong profits and has a reasonable valuation. From Jan. 24 to Feb. 11, the shares jumped as high as 22%.

On Feb. 11, InMode’s Q4 EPS came in at 64 cents. That was versus the analyst mean estimate of 57 cents. On top of this, sales soared 47% to a record $110.5 million, surpassing the average outlook by $7 million. For fiscal 2022, the company now expects income from operations (excluding certain items) of $199 million to $204 million.

Last year, InMode launched EmpowerRF, which uses multiple, minimally invasive technologies “to treat a broad range of conditions” particular to women’s health. These include “blood circulation, pain relief, stress, urge, and mixed urinary incontinence (SUI) and pelvic floor weakness.”

Encouragingly, this company expects EmpowerRF to generate $20 million of sales in its first full year on the market. Despite its huge growth, InMode’s P/E ratio is just 23.9.

On the date of publication, Larry Ramer held long positions in LNG, EVGO, MGM, INMD and LKNCY.

Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.

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