If you are looking to invest for the long term, you may want to consider large-cap stocks that have a solid track record of performing steadily in all market conditions. Large-cap stocks are typically more immune to short-term fluctuations in the market and are considered to be safer stocks in which to invest.
Doing business in the COVID-19 era has been challenging for most companies. However, some large-cap companies have managed to increase their revenues during the same period. These companies performed well during the August quarter, and are expected to do well in the about-to-be-reported quarterly results also l.
Companies like Adobe, Inc. (ADBE), Oracle Corporation (ORCL), Broadcom, Inc. (AVGO), Costco Wholesale Corporation (COST), and Lululemon Athletica, Inc. (LULU) are scheduled to announce their results this week. It may be a good idea to bet on these stocks if they report promising numbers. In addition to offering safety, these five large-cap stocks possess the potential to gain significantly in the long run because they are innovating quickly to meet future demand.
Adobe, Inc. (ADBE)
ADBE is a software company that operates in the digital media, digital marketing, print and publishing segments. The company owns and runs the popular Adobe Acrobat and Adobe Photoshop software. ADBE’s stock has gained 47.4% so far this year.
The company recently entered into an agreement to acquire Workfront, which is a leading work management platform for marketing professionals. The company has also released a slate of innovations relating to its Creative Cloud applications, including Photoshop, Lightroom, and Illustrator. ADBE also announced that they will be working on the development of mobile and multi-surface apps.
ADBE is expected to have its fourth quarter earnings call on December 10, 2020. During the last quarter, the company saw record-breaking revenue of $3.23 billion, which represented an increase of 14% from the same period last year. The company’s EPS increased 22% year-over-year during the same quarter.
ADBE is expected to see a revenue growth of 13.2% for the quarter ended February 2021 and 15.4% in 2021. The company’s EPS is estimated to grow 12.4% in 2021 and at a rate of 17.4% per annum over the next five years.
How does ADBE stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
B for Industry Rank
B for Overall POWR Rating
The stock is also ranked #31 out of 96 stocks in the Software – Application industry.
Oracle Corporation (ORCL)
ORCL develops and markets a range of software products in the database, middleware, cloud infrastructure, and application segments. It is the world’s largest database management company. ORCL’s stock has risen 13.2% year-to-date.
The company recently released the Oracle Could VMware Solution in all global regions. The offering allows enterprises to move their VMware workloads to a cloud infrastructure. The company has also integrated a MySQL Analytics Engine with their MySQL Database Service. This move helps organizations to perform analytics for their MySQL Database through a single platform.
ORCL is expected to have its fiscal second quarter earnings call on December 10, 2020. For the quarter ended August 2020, the company saw a rise in revenue of 2% compared to the same period last year. The company’s EPS grew 16% during the same period.
ORCL’s revenue is estimated to increase 1.6% for the quarter ended February 2021 and 2.1% in 2021. The company’s EPS is expected to rise 8.3% in 2021 and 7.7% per year over the next five years.
ORCL’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” for Trade Grade and Buy & Hold Grade. It is ranked #1 out of 96 stocks in the Software – Application industry.
Broadcom, Inc. (AVGO)
AVGO designs, develops, and markets a wide range of semiconductor connectivity solutions. The company’s products are used in the data center networking, broadband, telecommunications equipment, and related segments. AVGO’s stock price has increased 30.2% year-to-date.
AVGO recently launched 7nm 8x100G PAM4 PHYs devices which are designed to be used for data center, cloud, and artificial intelligence networks. The move helps enterprises deploy their 800G infrastructure networks and solidifies AVGO’s leadership in the space. The company has also announced the availability of the industry’s first Open AIOps Platform. This platform uses artificial intelligence and machine learning to help enterprises meet their KPIs.
AVGO is slated to release its fourth quarter earnings report on December 10, 2020. During the prior quarter, the company’s revenue grew 6% compared to the same period last year. The company also generated free cash flow of more than $3 billion, which represented an increase of 33% year-over-year.
AVGO’s revenue is expected to grow 11.2% for the quarter ended January 2021 and 8.8% in 2021. The company’s EPS growth is expected to be 15.6% in 2021 and 7.9% per annum over the next five years.
It is no surprise that AVGO has a “Strong Buy” in our POWR Ratings systems with a grade of “A” in Trade Grade and Buy & Hold Grade. In the 86-stock Semiconductor & Wireless Chip industry, AVGO is ranked #4.
Costco Wholesale Corporation (COST)
COST operates numerous wholesale warehouses that sell branded and private-label products to members. The company also runs gas stations, pharmacies, photo processing centers, and more. COST’s stock has gained 27% year-to-date.
COST has recently announced that it will hold special shopping hours for senior citizens aged 60 and above, in a safety bid due to the coronavirus pandemic. The company has seen an increase of around 90% in sales through its digital channel.
COST is expected to release its quarterly results on December 10th. For the quarter ended August 2020, the company reported an increase in net sales of 12.5% year-over-year. The company’s revenue from membership fees increased 5.3% during the same period.
COST’s revenue growth is expected to be 9.1% for the quarter ended February 2021 and 8.5% for 2021. The company’s EPS growth is expected to be 12.1% in 2021 and 7.4% per annum over the next five years.
COST’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” for Trade Grade, Buy & Hold Grade, and Industry Rank. It is ranked #2 out of 18 stocks in the Grocery/Big Box Retailer industry.
Lululemon Athletica, Inc. (LULU)
LULU designs, manufactures, and markets men's and women’s athletic apparel. The company primarily makes sales through two channels — corporate owned stores and direct-to-consumers. LULU’s stock is up 62.8% so far this year.
The company is currently focusing on expanding its operations in Asia by opening new stores. In 2020, LULU opened 8 new stores in China. The company has also recently acquired Mirror, an interactive fitness platform.
LULU’s results for the last quarter will be released on December 10th. For the quarter ended August 2020, the company saw an increase in revenue of 2% year-over-year. Direct-to-consumer revenue was up 155% during the same period.
LULU is estimated to see a revenue growth of 13.5% for the quarter ended January 2021 and 4.1% in 2021. The company is expected to see an EPS growth of 52.7% in 2022 and 17% per annum over the next five years.
It is no surprise that LULU has a “Strong Buy” in our POWR Ratings systems with a grade of “A” in Trade Grade and Buy & Hold Grade. In the 65-stock Fashion & Luxury industry, LULU is ranked #3.
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ADBE shares were trading at $496.14 per share on Monday afternoon, up $10.14 (+2.09%). Year-to-date, ADBE has gained 50.43%, versus a 16.21% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks.
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