We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights General Electric, Microsoft, Amazon.com, Alphabet and Netflix
Read MoreHide Full Article
For Immediate Release
Chicago, IL – January 8, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: General Electric Co. (GE - Free Report) , Microsoft Corp. (MSFT - Free Report) , Amazon.com Inc. (AMZN - Free Report) , Alphabet Inc. (GOOGL - Free Report) and Netflix Inc. (NFLX - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Best Investment Strategy: Buy on the Dip
Wall Street had a dream run in 2023 reversing the nightmare of 2022. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — were up 13.7%, 23.9% and 43.4%, respectively. In 2022, the Dow, the S&P 500 and the Nasdaq Composite plummeted 8.8%, 19.4% and 33.1%, respectively.
However, market participants remain concerned about whether the U.S. stock market bull run will continue in 2024. The first three trading days of this year have witnessed significant volatility and a sharp decline in all three major stock indexes. Investors are uncertain as to when the first rate cut will materialize.
Bull Run to Continue in 2024
The impressive bull run is set to continue in 2024. The Fed's December FOMC meeting minutes clearly indicate a sizable percentage of cut in the benchmark interest rate this year. A rate hike is a remote possibility as the majority of FOMC members want to see the full effect of existing interest rate range of 5.25-5.5%. The inflation rate has been dwindling steadily since June 2022.
A lower interest rate regime will boost economic growth speeding up investment by businesses. In 2022, small-cap companies suffered from record-high inflation, a soaring interest rate and fear of an impending recession. However, in 2023, this segment of the economy found some relief from these three concerns. The rate cut will further boost mid and small-sized enterprises.
A lower interest rate regime will be beneficial high-growth sectors like technology and consumer discretionary. Several companies in these spaces depend on cheap source of credit as the full potential of their business is realized over a long period. A low risk-free interest rate will reduce the discount rate thereby increasing the net present value of investment in these stocks.
The global supply-chain system has been restoring slowly since last year as U.S. corporate behemoths are rescheduling their supply-chain system's bypassing of China. Moreover, the fundamentals of the U.S. economy remain firm despite record high-inflation and interest rate. The latest report of the Atlanta Fed projected that the U.S. GDP would grow 2% in fourth-quarter 2023.
Finally, a preliminary estimate revealed that a massive $1.4 trillion entered U.S. money market funds primarily due to an extremely high interest rate regime, with cash yielding around 5%. A systematic decline in the market interest rate will shift a major part of these gigantic funds to equity markets.
Buy on the Dip
Market participants are surprised to see such an impressive bull run in 2023. Consequently, a large section of investors has already said that U.S. stock markets will remain muted in 2024 as valuation is stretched.
At this stage, investors should wait for a proper time to enter the market. The long-term trend of Wall Street is very much bullish. However, markets are likely to fluctuate in the short-term due to profit booking on stretched valuation or unforeseen external disturbances like geopolitical conflicts or erratic behavior of energy prices.
In this regard, every dip will be a good buying opportunity even for those stocks that have skyrocketed in 2023 and have strong potential for 2024 and beyond. Investors sometimes invest in overbought stocks due to the FOMO (fear of missing out) factor. Instead, they should apply a SIP (systematic investment plan) strategy.
Select bold stocks, especially stocks of those companies that are market leader in their respective sectors. Use every dip in these stock prices to form a formidable portfolio over a period of time. At the end of the year, this portfolio is likely to beat average market returns.
How to Pick the Right Stocks
At this stage, several stocks look attractive for future growth. However, selecting the following four criteria will make the task easy. First, select U.S. corporate bigwigs (market capital > $100 billion) that have a well-established business model and globally acclaimed brand recognition.
Second, look for stocks that have strong growth potential for 2024 and beyond. Third, select stocks have seen positive earnings estimate revisions in the last 60 days. Fourth and most importantly, pick stocks that carry either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The five stocks that fulfill these criteria, despite stretched valuation, are:
General Electric Co. has an expected revenue and earnings growth rate of 8.6% and 69.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the last 60 days.
Microsoft Corp. has an expected revenue and earnings growth rate of 14.4% and 13.6%, respectively, for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last seven days.
Amazon.com Inc. has an expected revenue and earnings growth rate of 11.7% and 34%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2% over the last 30 days.
Alphabet Inc. has an expected revenue and earnings growth rate of 11.3% and 15.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days.
Netflix Inc. has an expected revenue and earnings growth rate of 13.9% and 32.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 30 days.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Highlights General Electric, Microsoft, Amazon.com, Alphabet and Netflix
For Immediate Release
Chicago, IL – January 8, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: General Electric Co. (GE - Free Report) , Microsoft Corp. (MSFT - Free Report) , Amazon.com Inc. (AMZN - Free Report) , Alphabet Inc. (GOOGL - Free Report) and Netflix Inc. (NFLX - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Best Investment Strategy: Buy on the Dip
Wall Street had a dream run in 2023 reversing the nightmare of 2022. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — were up 13.7%, 23.9% and 43.4%, respectively. In 2022, the Dow, the S&P 500 and the Nasdaq Composite plummeted 8.8%, 19.4% and 33.1%, respectively.
However, market participants remain concerned about whether the U.S. stock market bull run will continue in 2024. The first three trading days of this year have witnessed significant volatility and a sharp decline in all three major stock indexes. Investors are uncertain as to when the first rate cut will materialize.
Bull Run to Continue in 2024
The impressive bull run is set to continue in 2024. The Fed's December FOMC meeting minutes clearly indicate a sizable percentage of cut in the benchmark interest rate this year. A rate hike is a remote possibility as the majority of FOMC members want to see the full effect of existing interest rate range of 5.25-5.5%. The inflation rate has been dwindling steadily since June 2022.
A lower interest rate regime will boost economic growth speeding up investment by businesses. In 2022, small-cap companies suffered from record-high inflation, a soaring interest rate and fear of an impending recession. However, in 2023, this segment of the economy found some relief from these three concerns. The rate cut will further boost mid and small-sized enterprises.
A lower interest rate regime will be beneficial high-growth sectors like technology and consumer discretionary. Several companies in these spaces depend on cheap source of credit as the full potential of their business is realized over a long period. A low risk-free interest rate will reduce the discount rate thereby increasing the net present value of investment in these stocks.
The global supply-chain system has been restoring slowly since last year as U.S. corporate behemoths are rescheduling their supply-chain system's bypassing of China. Moreover, the fundamentals of the U.S. economy remain firm despite record high-inflation and interest rate. The latest report of the Atlanta Fed projected that the U.S. GDP would grow 2% in fourth-quarter 2023.
Finally, a preliminary estimate revealed that a massive $1.4 trillion entered U.S. money market funds primarily due to an extremely high interest rate regime, with cash yielding around 5%. A systematic decline in the market interest rate will shift a major part of these gigantic funds to equity markets.
Buy on the Dip
Market participants are surprised to see such an impressive bull run in 2023. Consequently, a large section of investors has already said that U.S. stock markets will remain muted in 2024 as valuation is stretched.
At this stage, investors should wait for a proper time to enter the market. The long-term trend of Wall Street is very much bullish. However, markets are likely to fluctuate in the short-term due to profit booking on stretched valuation or unforeseen external disturbances like geopolitical conflicts or erratic behavior of energy prices.
In this regard, every dip will be a good buying opportunity even for those stocks that have skyrocketed in 2023 and have strong potential for 2024 and beyond. Investors sometimes invest in overbought stocks due to the FOMO (fear of missing out) factor. Instead, they should apply a SIP (systematic investment plan) strategy.
Select bold stocks, especially stocks of those companies that are market leader in their respective sectors. Use every dip in these stock prices to form a formidable portfolio over a period of time. At the end of the year, this portfolio is likely to beat average market returns.
How to Pick the Right Stocks
At this stage, several stocks look attractive for future growth. However, selecting the following four criteria will make the task easy. First, select U.S. corporate bigwigs (market capital > $100 billion) that have a well-established business model and globally acclaimed brand recognition.
Second, look for stocks that have strong growth potential for 2024 and beyond. Third, select stocks have seen positive earnings estimate revisions in the last 60 days. Fourth and most importantly, pick stocks that carry either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The five stocks that fulfill these criteria, despite stretched valuation, are:
General Electric Co. has an expected revenue and earnings growth rate of 8.6% and 69.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the last 60 days.
Microsoft Corp. has an expected revenue and earnings growth rate of 14.4% and 13.6%, respectively, for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last seven days.
Amazon.com Inc. has an expected revenue and earnings growth rate of 11.7% and 34%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2% over the last 30 days.
Alphabet Inc. has an expected revenue and earnings growth rate of 11.3% and 15.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days.
Netflix Inc. has an expected revenue and earnings growth rate of 13.9% and 32.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 30 days.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.