3 Large-Cap Momentum Plays Bucking the Market Correction At least for now, the best strategy may be to ride the names that are successfully going against the tide.

You wouldn't know it by the negative sentiment swirling around the stock market lately, but approximately one-third of S&P 500 constituents are up year-to-date. Unfortunately, this group has been easily overpowered by an assault on high multiple and unprofitable companies that has the benchmark down more than 10% a little over three weeks into the year.

Still, there have been some standout performers in a sea of red. These companies could be indicating to investors that they plan to be the leaders of an uncertain 2022. After all, when U.S. stocks faltered in January 2021, there were several stocks that did well and went on to be some of the year's biggest outperformers.

With inflation concerns lingering and the newest pandemic developments yet to be seen, who knows what the rest of the year will bring. At least for now, the best strategy may be to ride the names that are successfully going against the tide. Here are three ways to play the momentum trade in spite of the market's downward bias.

Why is Schlumberger Stock Up?

Among the 10 worst S&P 500 performers of 2021, Schlumberger (NYSE: SLB) is up 20% year-to-date. Other than Activision Blizzard, which is being acquired by Microsoft, no other stock has advanced more.

The sharp reversal of fortune stems from a similar spike in the price of oil. Last week WTI crude climbed to $87, the highest level since 2014. The combination of a weakened demand outlook tied to Omicron and the potential for supply disruptions tied to the Ukraine-Russia conflict while bad news for the broader market has been good news for oil & gas stocks.

Elevated oil prices are expected to spur increased drilling activity around the world. This plays into the hands of Schlumberger, the world's top oilfield services company, which has a presence in more than 80 countries.

Schlumberger is coming off a better than expected third-quarter performance thanks to increased international drilling activity. As the energy sector recovery continues to gather steam in 2022, the Street is forecasting Schlumberger's international exposure and above industry margins to drive a 34% jump in profits. This suggests there is still plenty of room for margin expansion with the stock trading at just 14x forward earnings.

What Financial Stocks are Doing Well?

Financials have held up relatively well year-to-date and Wells Fargo & Company (NYSE: WFC) has been the sector's top performer. Up approximately 9% this year, the major U.S. bank has started to dig itself out of 2021's 44% slide.

Earlier this month, Wells Fargo helped kickstart fourth-quarter earnings season by delivering a 16% increase in revenue and earnings per share (EPS) that more than doubled year-over-year. The bank finished the year on a high note due to lower loan charge offs (related to the strong labor market) as well as effective cost-cutting measures.

The market is braced for a strong 2022 for U.S. banks with the Federal Reserve expected to raise rates on multiple occasions. In the case of Wells Fargo, this should translate to solid net interest income growth and increased profitability.

The current consensus forecast for 2022 EPS is $4.79. This means Wells Fargo goes for 11x forward earnings and is one of the least expensive ways to play rising interest rates. And with profits poised to improve, there's a good chance the dividend continues to move higher and make Wells Fargo an even more attractive value investment.

Is Deere & Company Stock a Buy?

Up about 4% year-to-date in a weak market, Deere & Company (NYSE: DE) is the top performer among industrials names. The farm and construction machinery company has been dragged lower by the stock market correction in recent days but rolled along nicely to start the year.

Deere's early rally was fueled by the unveiling of its new fully autonomous tractor at this month's Consumer Electronics Show (CES) in Las Vegas. Intended for large-scale crop production, the high-tech tractor is able to use camera images to monitor its position and operate with high accuracy. This is expected to not only improve crop yield and farm efficiency but free up farmers for other duties while they can check on the tractor from their mobile phones.

Deere's self-driving tractor won't be available until later in the year and is considered more of a long-term growth driver. In the meantime, there should be plenty of other growth drivers.

Rising commodity prices are expected to incentivize farmers to spend on new farm equipment and upgrade old equipment, both of which are Deere revenue streams. Thanks to a healthy housing market, the construction industry is also expected to see improvement which should drive higher demand for Deere's earthmoving and compact equipment.

Shares of Deere have staged a strong rebound since March 2020 and finished up 55% last year. This could make investors feel like they're late to the party. However, with exposure to two growing industries and a reasonable 21x P/E ratio, there appears to be more in the tank.