There are a lot of catalysts forming in the market right now. Crypto is in the midst of a rampaging bull run, the price of gold is flirting with an all-time high, Treasury yields are falling and expectations are growing that the U.S. Federal Reserve could begin cutting interest rates as soon as March of next year.
These developments are helping to push the share prices of some stocks sharply higher to start the month of December.
Investors who choose wisely are sure to be rewarded if these catalysts continue to play out and we end the year with a Santa Claus rally. Of course, nothing is for certain but there are reasons for optimism as 2023 draws to a close. Here are the three best stocks to buy in December.
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Cryptocurrencies are red hot again, and that’s proving to be very good for business intelligence company MicroStrategy (NASDAQ:MSTR), which has one of the largest holdings of Bitcoin (BTC-USD) in the world. Company co-founder and current executive chairman Michael Saylor directed MicroStrategy to start purchasing Bitcoin in August 2020. Today, the company owns 174,530 Bitcoin that it bought for $5.28 billion for an average price per BTC of $30,252.
Saylor was widely criticized for continuing to buy Bitcoin as the price fell to $16,000 during the 2022 bear market. But now, with Bitcoin’s price at $42,000 and MicroStrategy sitting on a $2 billion profit in its Bitcoin holding, Saylor looks like a genius. With many analysts forecasting that we’ll see Bitcoin’s price reach $100,000 within the next year, MicroStrategy looks positioned to continue benefitting from its crypto bet. MSTR stock is up 293% this year and has gained 346% over five years.
Uber Technologies (UBER)
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Uber Technologies (NYSE:UBER) is riding high right now. The ride hailing and deliver company’s stock got a nice bounce after its third-quarter results showed sustained growth at the company, with its gross bookings up 21% year-over-year.
Now word comes that Uber is being added to the S&P 500 index before the start of trading on Dec. 18. The company qualified for inclusion in the S&P 500 index after its Q3 results showed profitability over the previous four quarters.
With a $116 billion market capitalization, Uber had been the largest American company that wasn’t part of the benchmark S&P 500 index. Its inclusion is a bullish sign and potential catalyst for UBER stock. Stocks that are added to a major index often rise as they get purchased by mutual funds and exchange-traded funds that track the performance of benchmarks like the S&P 500. UBER stock was already on an upswing, having gained 22% in the last month, bringing its year-to-date increase to 130%.
Signet Jewelers (SIG)
Signet Jewelers (NYSE:SIG) is an unheralded and undervalued stock. You might say it’s a diamond in the rough (pun intended). While the company gets little attention in the financial press, SIG stock continues to quietly outperform the market. This year, Signet’s share price is up 34%, it has risen 54% over the last 12 months, and it has increased 130% through five years. The stock pays a nice quarterly dividend of 23 cents a share, giving it a yield of 1.03%, and it trades at just 13 times future earnings estimates.
On the day of this writing, SIG stock was up 6% after the company reported the latest in a string of positive financial results. The company announced earnings per share (EPS) of 24 cents, which beat Wall Street forecasts of 15 cents. Revenue matched analyst estimates at $1.40 billion. However, Signet said that its inventory levels declined by 14% year-over-year to $2.1 billion, which really caught the attention of analysts and investors. With the holidays here and the price of gold near its all-time high, now is a great time to own a jewelry stock.
On the date of publication, Joel Baglole 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.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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