Market Overview

Cyclical Stocks That Rely On The Economy Could Be In For A Sweet '16

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Cyclical Stocks That Rely On The Economy Could Be In For A Sweet '16
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Over the past few years, slow economic growth has kept certain industries from prospering and hurt economically-dependent stocks. However, with confidence returning to the US and forecasts showing that growth is expected in the new year, RBC Capital Markets has suggested that investors to take a second look at cyclical stocks.

Where To Invest

Companies like Whirlpool Corporation (NYSE: WHR) are heavily dependent on the economic climate as people are much less likely to replace their appliances when money is tight. Whirlpool shares have lost nearly 25 percent over the past year, making now a good time to buy for those who are expecting to see economic improvement in the coming year.

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Industrials are another place to look for cyclical stocks as the space has been beaten down over the past few years but could see a revival in 2016. General Electric Company (NYSE: GE) has emerged as a favorite for investors in this space as the firm boasts a 3.9 percent dividend. RBC also recommended Canadian National Railway (USA) (NYSE: CNI) for investors looking to pick up a cyclical stock.

Proceed With Caution

As with anything market related, its difficult to say whether or not the market is at the bottom of the cycle yet. Economic improvement is likely to come in 2016, but when stocks like Whirlpool will begin to benefit is uncertain.

For that reason, many analysts recommend investing in big name firms that will be able to weather any further economic turmoil should it continue, and keeping their portfolios diversified in case things don't pan out as they'd planned.

Latest Ratings for WHR

DateFirmActionFromTo
Jun 2017Credit SuisseInitiates Coverage OnNeutral
Jan 2017Goldman SachsDowngradesBuyNeutral
Nov 2016KeyBancMaintainsOverweight

View More Analyst Ratings for WHR
View the Latest Analyst Ratings

Posted-In: RBC Capital MarketsAnalyst Color Long Ideas Markets Analyst Ratings Trading Ideas Best of Benzinga

 

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