With global recession fears rising, this dynamic opens the door for the biggest opportunities for stock investors in 2023. Essentially, the pessimism of the moment convinced many stakeholders (arguably for good reason) to abandon the ship. And we’re not just talking about technology-oriented names, though they bear the brunt of the damage. Rather, the pain cuts across several market segments.
Further, until the Federal Reserve decides the coast is clear regarding monetary policy normalization, the red ink may continue flashing. For instance, Bloomberg noted that the Fed’s hawkish approach to tightening the money supply added to the debt pressure of developing nations. In addition, advanced economies that suffered sharp inflation mimicked the Fed, leading to global slowdown risks. Naturally, the equities sector felt the pain. But again, contrarians enjoy the biggest opportunities for stock investors in 2023. Below are seven compelling examples.
On the surface level, Intuit (NASDAQ:INTU) doesn’t immediately trigger sentiments regarding the biggest opportunities for stock investors in 2023. The company specializes in tax and accounting software – boring. As well, only the bears have had any fun with INTU throughout 2022. On a year-to-date basis, shares plunged more than 33% in equity value.
Still, it’s useful to look at Intuit fourth dimensionally, as Doc Brown might tell Marty McFly. According to Resume Builder, “90% of companies will require employees to return to office in 2023.” Almost guaranteed, this directive will not be popular with worker bees. However, the website also notes that “21% of companies will fire workers who do not return to the office.”
So, it’s gig economy or bust – and that makes INTU one of the biggest opportunities for stock investors in 2023. Essentially, gig workers (i.e. independent contractors) face similar tax profiles to corporations; essentially, they’re in business for themselves. And such taxes are pound for pound much more complicated than the typical W2 forms employees fill out. Thus, Intuit should gain relevance next year (and the years afterward).
Another example of the biggest opportunities for stock investors in 2023 that doesn’t appear as such, Adobe (NASDAQ:ADBE) presents risks. For one thing, the chart performance pings poorly. Since the start of the year, ADBE gave up nearly 41% of its equity value. Also, the company attracted some analyst downgrades over the trailing year.
Fundamentally, though, Adobe garners relevance because of the gig economy. One of the few sectors that don’t offer a stereotypical image of its participants, gig workers cut a wide figure. From ride-sharing drivers to repair people to white-collar workers that don’t want the strict nine-to-five schedule, the gig economy welcomes all. And it certainly welcomes the creatives, which then bolsters demand for Adobe Photoshop and similar software.
To be fair, hedge funds have been steadily mitigating their exposure to ADBE since the third quarter of 2020. At the same time, analysts still maintain a positive outlook for Adobe, rating it a consensus moderate buy. Given the changes in the workplace, the company is worth considering for contrarians seeking the biggest opportunities for stock investors in 2023.
Source: shutterstock.com/Digital Genetics
I’m not going to pull any punches here. Admittedly, appliance manufacturer Whirlpool (NYSE:WHR) cuts an odd profile for the biggest opportunities for stock investors in 2023. Further, its technical performance doesn’t exactly inspire confidence. Since the beginning of the year, WHR gave up 39% of its equity value. Besides, who invests in boring segments like common household appliances?
Well, Whirlpool represents another example of investors requiring fourth-dimensional thinking. I laid out a detailed explanation on TipRanks. However, the gist of the argument goes like this. Whirlpool engineered its appliances to be durable for a specified time range under normal usage. However, with millions of white-collar workers operating remotely for about two years, the usage of household appliances significantly accelerated.
This isn’t to say that all appliances will fail next year. However, if a household product were to fail in 2025, it’s quite possible that increased usage will push up the failure date to 2023. Therefore, WHR could see a demand uptick soon, making it one of the biggest opportunities for stock investors in 2023.
Source: Epic Cure / Shutterstock
Writing these types of gallery slides enables me to bring some potentially underappreciated gems to the table. For those seeking the biggest opportunities for stock investors in 2023, Valvoline (NYSE:VVV) could be an intriguing idea. As a manufacturer and distributor of its namesake branded automotive oil, additives, and lubricants, Valvoline depends on combustion-powered mobility. Obviously, that’s been a challenge for much of the post-pandemic new normal.
However, as mentioned earlier, workplace normalization trends may shift the framework favorably for VVV stock. While on average, vehicle miles traveled recovered to pre-pandemic norms, the figure should be higher than where it stands now. A new generation of employees will enter the labor market. As well, with companies set to recall their workers, people must fire up their engines for the daily grind lest they suffer the consequences of insubordination.
Irrespective of vehicular miles, many households will be looking to make their (combustion) cars last longer. This too benefits Valvoline, making it one of the biggest opportunities for stock investors in 2023.
Source: TonelloPhotography / Shutterstock.com
No matter how much gearheads may sing the praises of combustion-powered mobility, at some point, it’s quite possible that electric vehicles may take over. It may not happen by 2030, which certain policymakers hold as a benchmark. Still, the momentum in electrification shows no sign of abating. Nevertheless, figuring out which EV brand will win out, in the long run, presents difficulties. Therefore, investors should cut the ambiguities and consider Vale (NYSE:VALE).
A Brazilian metals and mining specialist, Vale represents the largest producer of iron ore and nickel in the world. In particular, the latter commodity commands much relevance due to its high energy density. As well, nickel offers greater storage capacity at lower costs. Naturally, then, EV manufacturers saw the benefit of utilizing metal as a key component in battery packs.
In other words, Vale ranks among the biggest opportunities for stock investors in 2023 because it’s a ticket seller. Sure, you can try to wager on which team will win the competition. But with so many rivals in the space, that’s an arduous task. Arguably, Vale provides a more surefire approach.
Source: xalien / Shutterstock
Moving onto the high-risk, high-reward segment of the biggest opportunities for stock investors in 2023, Netflix (NASDAQ:NFLX) generates both intrigue and trepidation. From a bird’s eye view, Netflix still commands extraordinary relevance because of its content-streaming business. On the other hand, this year’s been rough for NFLX. Since the January opener, shares hemorrhaged over 52% of equity value.
Still, those that deploy a contrarian mindset enjoy justification for their optimism in Netflix. For one thing, the back half of 2022 presented food for thought. In the trailing six months, shares gained a whopping 58%. Fundamentally, the enterprise stands to benefit from the cheap entertainment thesis. After all, Hollywood really came to life because it provided a psychological pick-me-up for Americans during the Great Depression.
If we do incur a recession, the same narrative may undergird NFLX. While technologies change, human instincts generally do not. Plus, for all the turmoil that Netflix suffered, analysts still like the stock. Per TipRanks, Wall Street experts rate it a consensus moderate buy.
Sea Ltd. (SE)
Source: Wright Studio / Shutterstock.com
At the time of writing, I apparently have a 53% success rate and an average return of 1%. With the S&P 500 index down over 20% YTD, I’ll take the win, even if it feels like backing into the playoffs. That said, one of my stinkers was tech conglomerate Sea Ltd. (NYSE:SE).
After suffering sharp losses, I felt that Sea’s broad exposure to e-commerce, financial technology (fintech), and gaming represented value. I still believe this, given the underlying Southeast Asian market’s potential. Nevertheless, the pain has been awful. Critically, SE is down 77.5% YTD. And the back half performance stinks, with a trailing-six-month loss of 30%.
However, when it comes to the biggest opportunities for stock investors in 2023, it’s hard to overlook the potential of developing regions. Even with some pain baked in, Southeast Asia’s internet economy can hit $330 billion by 2025. So, disappointing or not, SE is worth keeping on your radar.
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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.