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5 of the Best Stocks to Buy Heading Into December

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Wall Street is well-poised to finish the month of November on a strong note, with all the major indexes including the Dow, the S&P 500 and the Nasdaq on track to register their best monthly gains in quite some time. The indexes are already up more than 11% so far this month.

Some skeptics, however, may say that the performance of the stock market is poised take a beating amid trade tensions. In fact, its true that trade issues might act as a hindrance but only temporarily and will eventually get overshadowed by a slew of underlying positive factors that will help the broader market chug along heading into December.

The Trump administration may blacklist some major Chinese companies such as oil and gas player CNOOC and chip manufacturer SMIC to name a few. Such moves are sure to impact the already strained relationship between two of the world’s largest economies, leading to stock market gyrations. However, promising developments on the coronavirus vaccine front, and subsequently its positive impact on the economy will surely help the broader market scale northwards in the near term.

By the way, expectations of an imminent COVID-19 vaccine breakthrough have already given a new lease of life to the economy and helped beaten-down economically-sensitive cyclical stocks to gain traction. These stocks will rise further in December since Pfizer Inc. (PFE - Free Report) and Moderna, Inc. (MRNA - Free Report) are widely expected to soon begin emergency distribution of their respective vaccine candidates.

Both Pfizer and Moderna have used mRNA technology, and claim that their vaccine candidates are about 95% effective. To top it, AstraZeneca PLC (AZN - Free Report) has also joined the race to the coronavirus vaccine, and claims that its vaccine candidate has an average efficacy of 70% (read more: Cyclical Stocks Pop on Vaccine Progress: 5 Solid Buys).

Nevertheless, stocks from cyclical sectors like energy, consumer discretionary, financials and industrials have been on a tear lately. In fact, one of the biggest losers of this year, energy shares, have now jumped more than 30% so far this month.

With travel demand declining amid rapid rise in coronavirus cases globally, the demand for fuel oil also dropped. But possibility of progress in the coronavirus space at present has brightened the prospects of air travel vis-a-vis demand for oil.

Among major consumer discretionary players, apparel stocks have progressed by leaps and bounds since a vaccine and return to new normal will increase consumer outlays, especially in segments that were badly impacted this year like clothes.

However, it’s just not cyclical stocks, all stocks from all sectors will surely do well once the economy starts to recover. And with former Fed Chair Janet Yellen expected to be the next Treasury Secretary, the economy is no doubt expected to improve. Yellen has time and again taken unprecedented steps to reinvigorate a struggling economy, and in many cases has been successful with her endeavors.

Lastly, the period from the Thanksgiving week till the end of the year has traditionally been remarkable for the stock market. As quoted in a CNBC article, since 1995, during the same period, the broader S&P 500 had notched positive returns 19 times, or 76%.

5 Top Stocks to Buy Ahead of December

Barring trade issues, progress toward a coronavirus vaccine and Yellen yet again likely to be selected for a top post certainly bode well for stocks in December. Traditionally, December has also been a good month for stocks with less volatility. Hence, investing in fundamentally sound stocks that can make the most of these positives and move north seems prudent. Here’re five such stocks that also flaunt a Zacks Rank #1 (Strong buy) or 2 (Buy).

HIGHPOINT RESOURCES CORP is an exploration and production company. The company, currently, flaunts a Zacks Rank #1. The Zacks Consensus Estimate for its current year earnings increased 17.4% over the past 60 days. The company’s expected earnings growth rate for the current quarter is 208.8%.

The Buckle, Inc. (BKE - Free Report) is a leading retailer of medium to better-priced casual apparel, footwear, and accessories for fashion-conscious young men and women. The company, currently, carries a Zacks Rank #2. The Zacks Consensus Estimate for its current year earnings increased 16.8% over the past 60 days. The company’s expected earnings growth rate for the current quarter and year is 2.1% and 7.5%, respectively.

Deere & Company (DE - Free Report) is currently the world’s largest producer of agricultural equipment. The company, currently, sports a Zacks Rank #1. The Zacks Consensus Estimate for its current year earnings increased 11% over the past 60 days. The company’s expected earnings growth rate for the current quarter and year is 11.7% and 28.9%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dime Community Bancshares, Inc. (DCOM - Free Report) provides commercial banking and financial services in New York. The company, currently, has a Zacks Rank #1. The Zacks Consensus Estimate for its current year earnings increased 10.1% over the past 60 days. The company’s expected earnings growth rate for the current quarter and year is 70.4% and 21.3%, respectively.

Clearwater Paper Corporation (CLW - Free Report) is a standalone company that produces pulp and paperboard at six facilities across the United States. The company, currently, has a Zacks Rank #2. The Zacks Consensus Estimate for its current year earnings increased 2.6% over the past 60 days. The company’s expected earnings growth rate for the current quarter is nearly 146%.

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