The fourth quarter is here and we’re down to the last 90 days of the calendar year. If your portfolio is beating the market, then it’s time to build on your success. If you’re lagging, you still have time to find A-rated stocks to buy.
Usually, the fourth quarter has been a strong one on Wall Street. Since 1950, the S&P 500 has had an average return of 4.2% in the fourth quarter, which is twice the return of either Q1 (2.1%) and Q2 (2%), and much better Q3’s average (0.6%).
A-rated stocks are those that get the best possible grades in our free Portfolio Grader tool. The Portfolio Grader evaluates every stock on the market on a number of metrics including growth, quarterly returns, dividend history, analyst sentiment, momentum and other factors.
Buying A-rated stocks puts you in the position to capitalize on the market’s traditional fourth-quarter surge, setting you up to close 2023 in the best possible position.
Consider the following names if you’re looking for some A-rated stocks to buy in October.
EHang Holdings (EH)
EHang Holdings (NASDAQ:EH) is a Chinese company that is building an autonomous aerial vehicle platform.
The Civil Aviation Administration of China has already approved EHang’s Unmanned Aircraft Cloud System for test flights.
It also recently delivered five EH216-S AEV units to Shenzhen Boling Holding Group Co., Ltd. And Shenzhen Boling could purchase 95 additional EH216-S units.
But even if you aren’t a believer in the potential of aerial vehicles, EHang also is involved in next-generation battery technology. It has a partnership with Shenzhen Inx Technology to develop solid-state lithium metal batteries for EHang’s flying vehicles.
EH is new enough that it generates little revenue, just $10 million in the second quarter. But you’re buying this stock for the potential, not last quarter’s earnings report. EH stock is up 98% this year and gets an “A” rating in the Portfolio Grader.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is one of the best blue-chip stocks you can buy today.
It’s been one of the best-performing A-rated stocks on the market, up 200% and blasting through the $1 trillion market cap barrier.
Nvidia stock is on fire with no sign of stopping because of the massive interest in generative artificial intelligence. Many tech companies are looking for ways to incorporate generative AI into their products, and Nvidia has the enviable position of having as much as 95% of the AI computing market.
The AI market is just going to grow as well. Statista projects that the market, valued at $207 billion this year, will be as much as $1.8 trillion by the end of the decade.
Nvidia’s earnings have been unreal this year and it is guiding for $16 billion in the third quarter. It also is immensely profitable, with a 70% gross margin and 50% operating margin last quarter.
NVDA stock continues to get an “A” rating in the Portfolio Grader.
ePlus Incorporated (PLUS)
Information technology services company ePlus Incorporated (NASDAQ:PLUS) provides software solutions for cloud, data center, security, networking and AI.
The company provides hardware, subscription software, professional and management services. It also does desktop support and project management, as well as financial services such as underwriting, direct financing, accounting, risk management and asset management.
The company has a long-standing partnership with Nvidia to help deliver AI products and promote machine learning. It currently works with the Nvidia DGX line of servers and workstations to help customers launch data science initiatives and handle the day-to-day operations of the platform.
The company saw fiscal Q1 2024 results (ending June 30, 2023) of $574 million in revenue, up 25% since last year, and operating income of $46 million, up 40%, making it one of the A-rated stocks to buy now.
PLUS stock is up 44% in 2023 and gets an “A” rating in the Portfolio Grader.
Symbotic (SYM)
If EHang is a bet on autonomous vehicles of the future, then you can make the argument that Symbotic (NASDAQ:SYM) is a bet on warehousing of the future.
This industrial stock represents a company that provides a state-of-the-art robot system to help companies manage their warehouses.
The automated system is designed to make warehouse management more efficient and flexible. Companies like Walmart (NYSE:WMT) use the platform to automate its processes, a factor in helping Walmart keep its pricing advantage over other retailers.
KeyBanc Capital Markets analyst Ken Newman recently initiated coverage on SYM stock with an overweight rating, noting he is bullish on the sector because “the industrial automation industry remains ripe for increased investment and adoption supported by multiple secular crosscurrents.” He set a price target of $50, indicating a potential 62% runway.
Revenue in the second quarter was $311.84 million, up 77% from a year ago.
SYM stock is up 165% this year and gets an “A” rating in the Portfolio Grader.
Li Auto (LI)
Li Auto (NASDAQ:LI) is a Chinese designer, manufacturer and seller of smart electric vehicles.
Its lineup includes the six-seat family Li L9 SUV, a premium SUV called the Li L8, and a five-seat family SUV called the Li L7.
It’s also in rapid growth mode. Deliveries in July were 34,134, an increase of 227% from a year ago. As of July 31, the company delivered 173,251 in 2023.
Li is also launching its first battery electric vehicle, the Li Mega, in December. Li projects that the Mega will be the top-selling vehicle in China that’s priced at more than 500,000 yuan, or nearly $70,000.
Li Auto should also get a boost if Chinese regulators follow through on reports that they may ease restrictions that limit the stake foreign investors can hold in publicly traded Chinese companies. That decision could allow Li Auto to raise money faster and accelerate its growth.
Up 72% in 2023, Li Auto is an attractive investment. It gets an “A” rating in the Portfolio Grader.
Energy Products Partners (EPD)
Located in Houston, Energy Products Partners (NYSE:EPD) is a master limited partnership in the energy sector.
Ownership shares of master limited partnership trade publicly like a stock, which is how EPD is listed on the New York Stock Exchange.
These partnerships come with a unique tax structure that provides increased dividend payouts because the corporation pays taxes on earnings before sharing the payouts with investors. Currently, Energy Products Partners pays a yield of 7.4%.
EPD has more than 50,000 miles of pipeline to help it transport natural gas liquids, crude oil, natural gas and petrochemicals. Q2 results included earnings of $1.3 billion or 57 cents per share.
EPD gets an “A” rating in the Portfolio Grader.
Stellantis (STLA)
Stellantis (NYSE:STLA) is one of the Big 3 Detroit automakers, as the owner of Chrysler’s brand.
And it’s also been in the news lately as the United Auto Workers stages a strike against it and other automakers.
However the strike has had little effect on STLA stock, and I remain convinced that Stellantis is a good investment.
The company, which was formed in 2021 from the merger of Fiat Chrysler and PSA Group, has iconic brands such as Dodge, Fiat, Jeep, Citroen and Peugeot. It has a stronger foothold in Europe than the other Detroit automakers, with the No. 3 electric vehicle (Fiat New 500) and the best-selling EV in France (the Peugeot e-208).
Earnings for the first half of 2023 showed considerable strength, with revenues of 98.4 billion euros ($103.4 billion), up 12% from a year ago. Operating income was 14.1 billion euros, an increase of 11% from 2022.
The company hasn’t yet released its delivery numbers for the second quarter, but Q1 shipments brought in revenues of 47.2 billion euros, up 14% from a year ago.
Even despite the labor unrest, STLA stock is up 32% this year, and it gets an “A” rating in the Portfolio Grader.
— Louis Navellier and the Investor Place Research Staff
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Source: Investor Place