March brought a volatile month for investors as the focus turned to the banking sector. A combination of deposit flight and sharply rising interest rates caused several prominent regional banks to fail, but swift action from regulators appears to have stemmed the bank run. Meanwhile, significant value is now on offer across the financial sector. And that’s not all. In other sectors, companies saw sharp stock price declines in March, which have created solid entry points for the rest of 2023.
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Here are five stocks to buy for April that fell sharply in March and should be set for significant recoveries going forward:
— Toronto-Dominion Bank (ticker: TD)
— Snowflake Inc. (SNOW)
— MetLife Inc. (MET)
— Albemarle Corp. (ALB)
— Hormel Foods Corp. (HRL)
Toronto-Dominion Bank (TD)
Toronto-Dominion Bank is one of Canada’s five dominant banking firms. The bank has made several acquisitions in recent years that have expanded its footprint into the U.S. Due to the limited amount of competition there, Canadian banks tend to earn high profit margins and enjoy more stability than their U.S. counterparts. Regardless, TD stock has fallen sharply over the past month amid the broader banking industry panic.
And herein lies both a challenge and an opportunity for TD. The firm acquired a 13% ownership stake in Charles Schwab Corp. (SCHW) when Schwab merged with TD Ameritrade. Schwab shares plummeted in March amid worries about deposit flight and falling profit margins for the broker. TD, through its ownership stake, will profit from any rebound in Schwab shares as that crisis passes. For now, TD stock is trading at 6.2 times forward earnings while offering a 4.8% dividend yield.
Snowflake Inc. (SNOW)
Snowflake is a fast-growing, cloud-based data storage and analytics company. The firm was one of the most anticipated initial public offerings of recent years, going public at $120 per share in September 2020. It attracted notable investors, including Warren Buffett’s Berkshire Hathaway Inc. (BRK.A, BRK.B). Snowflake shares would go on to trade above $400 at one point, as traders were drawn to the firm’s incredible revenue growth. Now, though, the stock is in a slump, closing at $142.11 per share on March 30 after its latest slide this past month.
Yet the firm’s competitive position continues to strengthen. Snowflake has grown annual revenues from $97 million in fiscal 2019 to $2.1 billion in 2023. Analysts expect a 38% increase in top-line growth to $2.9 billion for its next fiscal year, even amid the deep freeze elsewhere in tech sector. Long story short, investors have the chance to buy this formerly hyped-up, high-growth tech firm at a far more reasonable price.
MetLife Inc. (MET)
It’s not just banks getting hammered due to interest rate volatility. Certain insurers, such as MetLife, saw their shares sink in March as well. However, MetLife is in a much better position than the regional banks. This is because insurers aren’t subject to bank runs. With life insurance, people pay premiums for their policies and then the insurer pays up on those policies many years, if not decades later. The client’s cash is locked in and available for long-term investment rather than being subject to rapid withdrawal. That means MetLife has the sticking power to ride out the near-term interest rate volatility without having to liquidate bonds at a loss.
Furthermore, thanks to the rise in interest rates, MetLife can earn far more attractive yields on new fixed-income investments. MetLife shares fell 20.5% this month through March 30 as it got caught up in the broader financial sector storm. This pushed shares to just 6.2 times forward earnings while offering a solid 3.5% dividend yield.
[READ: 7 of the Best Emerging Market Stocks to Buy]
Albemarle Corp. (ALB)
Albemarle is the world’s largest lithium producer. It has extensive operations in Chile, China and Australia. In addition to lithium, it also manufactures bromine, which is a key ingredient in fire suppression products. Lithium should be a vital mineral over the next decade as the world electrifies. Lithium is a key ingredient in batteries, and it will be needed in vast quantities to power electric vehicles and other items.
Albemarle is not content with its current size; it continues to add on additional capacity, such as through its recent offer to acquire Australian lithium firm Liontown Resources for $3.7 billion. Shares of lithium producers, including Albemarle, have fallen in recent weeks amid a drop in Chinese demand and as broader economic concerns weigh on the sector. However, this gives investors interested in the longer-term electrification theme a juicy entry point.
Hormel Foods Corp. (HRL)
Hormel Foods is a packaged-foods company that concentrates on protein-rich products. The company is known for its Spam canned pork product. Nowadays, it has a far more modern lineup of products in addition to that. Hormel is a leader in turkey, bacon, naturally raised and organic meats, pepperoni, nut butters, and guacamole, among other products. It has a stronger product collection than many of its peers because it concentrates on niche foods that have less competition and fewer store brands to worry about.
Hormel shares slumped in recent months due to margin pressure driven by high input prices. The war in Ukraine, in particular, made grains and livestock more expensive. However, Hormel has a tremendous track record, including more than 50 consecutive years of dividend growth. It should navigate this bump in the road, and investors can buy shares for a discount in the meantime.
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5 of the Best Stocks to Buy Now originally appeared on usnews.com
Update 03/31/23: This story was previously published at an earlier date and has been updated with new information.