Concerns about rising inflation have been the main driver of market sentiment in recent weeks. Data released earlier this month showed that the US made the most leap forward in nearly 12 years in April.
As such, technology stocks have fallen out of favor, with investors instead piling up in value stocks, which are typically companies that are more sensitive to economic cycles and better able to hold their own in an environment where inflation can heat up.
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Below, we highlight two proven winners of the year to date who are in a position to increase profits as inflation concerns affect markets.
1. Bank of America
Performance since the beginning of the year: + 39.1%
Market Cap: $ 356.8 Billion
Bank of America (NYSE 🙂 – which serves approximately 10.7% of all US bank deposits – thrived this year, benefiting from a recovering economy, robust investment banking activities and lower credit losses.
Shares of the Charlotte, North Carolina-based lender are up about 39% year-to-date, well above the comparable returns of both the and the. Year over year, the banking giant's shares have gained 84%.
BAC shares, outperforming industry peers such as JPMorgan Chase (NYSE 🙂 and Citigroup (NYSE :), finished Tuesday at $ 42.16, not far from its all-time high of $ 42.94 on May 10. was achieved.
At current levels, BofA has a market capitalization of approximately $ 357 billion, making it the second largest banking institution in the US and the eighth in the world.
Bank of America Daily Chart
Bank of America reported impressively on April 15, shattering expectations for both revenues and earnings.
The banking giant reported earnings per share of $ 0.86, up 115% from earnings per share of $ 0.40 in the same quarter a year earlier. Revenues totaled $ 22.9 billion, well above estimates of $ 21.9 billion, amid strong growth in trade and investment banking.
Revenues from fixed income trading grew 22% over the same period last year to $ 3.3 billion, while stock trading grew 10% to $ 1.8 billion. The company also posted a 62% increase in investment banking fees to $ 2.2 billion, fueled by a 218% increase in equity underwriting costs.
CEO Brian Moynihan said in the income statement:
"As low interest rates continued to challenge revenues, credit costs improved and we believe advances in the health crisis and the economy point to an accelerated recovery."
To add to these encouraging numbers, Bank of America's board of directors also approved a $ 25 billion share buyback program.
Taking this into account, BAC stocks still look attractive going forward – despite strong gains since the start of the year – given the improving outlook for economic growth and reduced credit losses.
Honorable Mentions: Wells Fargo (NYSE :), PNC Financial Services (NYSE :), and U.S. Bancorp (NYSE 🙂
2. The Mosaic Company
Performance year-to-date: + 58.5%
Market Cap: $ 13.1 Billion
The Mosaic Company (NYSE :), through its subsidiaries, manufactures and markets concentrated phosphate and potash nutrients worldwide. The company's assets include phosphate rock mines in Florida, Louisiana, Brazil and Peru, and potash mines in New Mexico, Saskatchewan and Brazil.
As one of the world's leading fertilizer manufacturers, it has benefited from a powerful combination of a thriving agricultural economy and a surge in agricultural commodity prices, which have recently reached their highest level in nearly a decade.
Since the beginning of the year, Mosaic shares have gained 58.5%, far outperforming the broader market. More impressively, the value of its shares has more than tripled in the last 12 months, up 232%, as the rise and prices bolstered investor sentiment about the potassium and phosphate fertilizer producer.
MOS shares hit a new record high of $ 38.22 yesterday before closing at $ 36.47, giving the Tampa, Florida-based agricultural giant a market cap of approximately $ 13.1 billion.
Mosaic announced sales well above consensus estimates when it released its first quarter financial results earlier this month.
Earnings per share increased over 1,000% from the same period last year to $ 0.57, ahead of expectations for earnings per share of $ 0.53. Sales, meanwhile, were up 28% year-on-year to $ 2.30 billion, driven by higher sales volumes and rising grain prices.
By comparison, Mosaic recorded a loss of $ 0.06 per share on sales of $ 1.8 billion in the same period last year.
Looking ahead, Mosaic management said the outlook for the remainder of 2021 remains favorable, citing strong demand and pricing for crop nutrients.
Taking this into account, MOS stocks appeared poised for further appreciation in the coming months.
Honorable Mentions: Nutrien (NYSE :), FMC (NYSE 🙂 and CF Industries (NYSE 🙂
