Although a new year tends to bring feelings of optimism, when it comes to the current market dynamics, it’s time to consider hot stocks to book profits in before 2023 arrives. At first, circumstances appeared favorable, with CNN reporting on Dec. 13 that inflation cooled more than expected. However, by the following day, the Federal Reserve set a different course than implied.
By raising the benchmark interest rate by 50 basis points, the central bank sent a clear signal. Its policymakers remain committed to tackling inflation through constraining liquidity in the monetary system. Then, one day later on Dec. 15, a disappointing retail spending report forecasted what we all fear: a possible recession on the horizon. Therefore, the idea behind hot stocks to book profits in doesn’t necessarily imply a bearish perspective on individual enterprises. Rather, this exercise simply centers on being smart with your money.
| NVO | Novo Nordisk | $130.14 |
| APO | Apollo Global Management | $62.05 |
| TCOM | Trip.com | $34.49 |
| AGEN | Agenus | $2.35 |
| MXCT | MaxCyte | $5.16 |
| WLFC | Willis Lease Finance | $55.86 |
| TOUR | Tuniu Corp. | $1.88 |
Novo Nordisk (NVO)
A Danish multinational pharmaceutical company, Novo Nordisk (NYSE:NVO) manufactures and markets pharmaceutical products and services, specifically diabetes care medications and devices. Earlier in the year, Novo Nordisk offered much potential. As circumstances normalized regarding the coronavirus pandemic, the broader healthcare segment shifted its attention toward addressing other diseases and conditions.
To be sure, NVO gained a very healthy 22.4% on a year-to-date basis. For comparison’s sake, the benchmark S&P 500 index fell nearly 20% during the same period. However, on a technical basis, one can make the argument that shares flew too far, too fast. In the trailing month, NVO soared to a performance just under 18%. Generally, Novo Nordisk presents a solid financial profile, particularly its excellent profit margins. Still, per Gurufocus.com’s proprietary calculation for fair market value, NVO now ranks as a significantly overvalued investment. Therefore, it’s probably time to consider shares as one of the hot stocks to book profits in.
Apollo Global Management (APO)
An American global private equity firm, Apollo Global Management (NYSE:APO) generated plenty of interest during the heyday of the new normal. With millions of white-collar workers sheltering in place, many had extra time on their hands. Per The Wall Street Journal, these folks turned to the equities sector to enhance their fortunes. Overall, this collective engagement translated to increased sentiment for capital market ventures.
However, circumstances shifted quite dramatically this year. While Apollo managed to perform relatively better than many other companies, it definitely incurred choppy trading in 2022. Since the start of the year, APO dipped almost 13%. Nevertheless, since the close of the Oct. 14 session, APO soared nearly 32%. Thus, it’s probably time to consider it one of the hot stocks to book profits in.
Two factors immediately come to mind. First, Gurufocus.com’s proprietary FMV calculations identifies APO as significantly overvalued. Second, some ugly headlines emerged which may serve to detract from Appollo’s business directive. Thus, it’s probably a safer bet to rank it as one of the hot stocks to book profits in.
Trip.com (TCOM)
Based in China, Trip.com (NASDAQ:TCOM) is a multinational online travel company that provides services including accommodation reservation, transportation ticketing, packaged tours and corporate travel management. Fundamentally, it’s somewhat easy to appreciate the upside narrative for TCOM. With the Chinese government relaxing several coronavirus-related mitigation measures, travel sentiment will likely boom.
At the same time, Beijing has a poor reputation throughout the new normal of reneging on prior loosening of policy. Further, TCOM just seems overly stretched at the moment. Since the start of the year, TCOM shares gained 38.5%. All of these gains came from the back half of the year, with TCOM returning 63%. As well, in the trailing month, shares popped up over 19%.
On the financial side, Gurufocus.com identifies TCOM as significantly overvalued. It’s the same against traditional metrics. Currently, the market prices TCOM at nearly 34-times forward earnings. In contrast, the sector median sits at only 17 times. Thus, you might want to consider it one of the hot stocks to book profits in before 2023.
Agenus (AGEN)
Headquartered in Lexington, Massachusetts, Agenus (NASDAQ:AGEN) is a biotechnology company focused on immunotherapy. Among its specialties include immuno-oncology, a field that uses the immune system to control or cure cancer. Per its corporate profile, Agenus develops checkpoint modulators, patient-specific anti-cancer vaccines and adjuvants that can be used with a range of vaccines.
Likely, your views on Agenus will vary depending on when during this year you got into AGEN. If it was the beginning of the year, you’re looking at a market loss nearing 33%. Therefore, a temptation exists to hold on. However, in the trailing half-year period, AGEN shares gained over 52% of equity value. From this perspective, AGEN ranks among the hot stocks to book profits in before the year’s up.
According to Gurufocus.com’s proprietary FMV calculations, AGEN rates as a significantly overvalued investment. For those that racked up significant profits in Agenus shares, it might be time to secure some of them. With negative profit margins and an Altman Z-Score pinging well into the distressed zone, this is easily one of the hot stocks to book profits in.
MaxCyte (MXCT)
Operating out of Gaithersburg, Maryland, MaxCyte (NASDAQ:MXCT) represents an advanced biotech firm. Per its website, MaxCyte pioneered cell engineering enabling technology. Its main focus centers on driving the discovery, development and manufacturing of next-generation, cell-based medicines. Specifically, the company facilitated the delivery of virtually any molecule into any cell. Thus, it has significant implications regarding research in cancer and rare genetic diseases.
To be fair, MXCT represents a tale of two cities. Since the January opener, shares hemorrhaged nearly 51% of equity value. However, circumstances improved dramatically in the second half. In the trailing half-year period, MXCT popped up over 39%. While a positive performance, the incoming deflationary forces – due to the Fed’s monetary tightening – presents concerns for growth-focused enterprises.
Again, Gurufocus.com’s FMV calculations identify MXCT as significantly overvalued. Against traditional metrics, Wall Street prices MXCT at 13.7-times sales. In contrast, the sector median value is just under four times. Admittedly, MaxCyte enjoys a solid balance sheet thanks to its robust cash position. Still, the sales premium suggests that it’s one of the hot stocks to book profits in.
Willis Lease Finance (WLFC)
Based in Coconut Creek, Florida, Willis Lease Finance (NASDAQ:WLFC) is a pioneer and provider of aviation services for over 45 years, per its website. As well, Willis Lease purchased, leased, and sold more engines in more countries over a longer period of time than any independent competitor. Its claim to fame is that it offers one of the most broadest product lines in the industry.
Fundamentally, the rise of social normalization trends helped swing WLFC substantially higher this year. In addition, other countries – such as Japan – reopening their tourism industries helped reinvigorate the broader aviation segment. Since the January opener, shares veritably screamed to a 53% upside performance. Also, most of this dynamism materialized recently. In the trailing month, WLFC soared 30%.
But given the major macroeconomic pressures bearing down on the global markets, a case can be made that WLFC rates as overvalued. Gurufocus.com’s FMV calculations suggest as such. Just as critically, Willis carries a relatively weak balance sheet, with an Altman Z-Score in distressed territory. Thus, WLFC may be one of the hot stocks to book profits in.
Tuniu (TOUR)
Headquartered in Nanjing, China, Tuniu (NASDAQ:TOUR) is another online travel agency. Its products and services include packaged tours, accommodation reservation, airline and railway ticketing, car rentals and corporate travel. As with Trip.com Group, the Chinese government’s efforts to gradually relax its zero-Covid policy represents a significant upside catalyst.
At the same time, it’s also difficult to trust Beijing, particularly with President Xi Jinping securing a practically unprecedented third term. Further, by placing his yes people in all seats of power, President Xi rules with absolute authority. Presumably, then, it won’t take much for the government to reinstitute draconian mitigation measures, especially if Covid cases flare up.
On paper, TOUR stock skyrocketed 300% in the trailing six months. If you’re one of the lucky ones to have been this richly rewarded, it’s time to consider TOUR as ranking among the hot stocks to book profits in. Not only are the technicals red hot, Tuniu rates as a significantly overvalued investment.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.