JPMorgan says market bottom is near as corporate takeovers soar – here are 3 high-rising stocks to play that bullish sentiment

JPMorgan says market bottom is near as corporate takeovers soar – here are 3 high-rising stocks to play that bullish sentiment

Stocks are down a lot in 2022. If you’re wondering where the market bottom is, JPMorgan has some good news.

The bank sees companies continuing to buy back their shares, which could help stocks bottom.

“In the latest sell, JPM estimates buyout executions 3-4x higher than trend, implying the company’s put option remains active,” JPMorgan’s Marko Kolanovic wrote.

The analyst points out that S&P 500 companies have announced a whopping $429 billion in share buyback activity in 2022. And since the companies continue to generate cash flow, more buybacks could be on the way.

If you share this view and want to buy the dip in a low market, here are three stocks that JPMorgan finds particularly attractive.

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ChargePoint Holdings (CHPT)

Electric vehicles are selling like hotcakes. And ChargePoint Holdings is solidly positioned for the electric vehicle boom.

The company has one of the largest electric vehicle charging networks in the world. It has approximately 5,000 commercial and fleet customers, 76% of which are Fortune 50 companies. Since its inception, ChargePoint has delivered over 105 million charging sessions.

Of course, EV stocks haven’t been the darlings of the market lately and this EV infrastructure play has also been caught in the sell-off. ChargePoint shares have fallen 48% in the past 12 months.

This might give bargain hunters food for thought.

In the fiscal year ended Jan. 31, ChargePoint generated $242.3 million in revenue, marking a 65% year-over-year increase. This is explained by a 90% increase in network charging revenue and a 32% increase in subscription revenue.

JPMorgan analyst Bill Peterson has an “overweight” rating on ChargePoint and a price target of $18, about 34% above the stock’s current position.

Nvidia (NVDA)

As a leading graphics card maker, Nvidia shares have seen a solid rise over the past decade. But that rally came to an abrupt end in November 2021. Since hitting a high of $346 in late November, the stock has fallen around 45%.

Nvidia’s plunge is substantial even compared to other battered stocks in the semiconductor sector.

Nvidia’s business is doing well, which makes this a particularly intriguing contrarian idea. The chipmaker generated $8.29 billion in revenue in its first fiscal quarter. The amount represented a 46% year-over-year increase and also marked a new quarterly high.

Gaming revenue grew 31% year-over-year to a record $3.62 billion. Meanwhile, the data center saw its revenue soar 83% to a record $3.75 billion.

JPMorgan analyst Harlan Sur recently lowered the price target on Nvidia from $350 to $285. However, Sur maintained an overweight rating on equities and the new price target still implies 51% upside potential.

Magellan Channel Partners (MMPs)

Unlike the previous two, Magellan Midstream Partners is not a disadvantaged stock. It’s actually up 9% year-to-date, outperforming the wider market.

It’s easy to see why Magellan is getting positive attention these days. The energy sector is running at full speed and Magellan’s midstream businesses are well positioned for this commodity cycle.

The partnership has 9,800 miles of refined product pipelines, 54 connected terminals and two marine storage terminals. It also owns about 2,200 miles of crude oil pipelines and storage facilities with a total storage capacity of about 39 million barrels.

Magellan is also a name to watch for income investors. The partnership pays quarterly distributions of $1.0375 per unit, translating into a hefty annual return of 8.1%. Management expects Magellan to generate enough cash to cover its 1.24x payment this year.

Last week, JPMorgan analyst Jeremy Tonet moved Magellan from neutral to overweight. He also raised the price target to $57, implying a potential upside of 12%.

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