By As we approach the end of 2023, investors are eager to uncover promising opportunities for the year ahead. A reliable starting point is to consider well-liked companies that exhibit a positive outlook.
To pinpoint such companies, we have conducted an analysis of the most popular stocks within the S&P 500, taking into account Wall Street ratings and rising earnings estimates for 2024.
Curated Selection of Stocks
The following 15 stocks have emerged as standout choices, considering their high Buy-rating ratios and strong earnings estimate momentum:
- Alexandria Real Estate Equities (ticker: ARE)
- Delta Air Lines (DAL)
- Amazon.com (AMZN)
- Jacobs Solutions (J) – a construction-services firm
- Nvidia (NVDA)
- S&P Global (SPGI) – an index provider
- Axon Enterprise (AXON) – a security-equipment provider
- Vici Properties (VICI) – a casino real-estate investor
- ServiceNow (NOW) – a software firm
- T-Mobile US (TMUS)
- Alphabet Inc. (GOOGL) – parent company of Google
- DexCom (DXCM) – a diabetes-monitoring firm
- Palo Alto Networks (PANW) – a network-security firm
- Meta Platforms Inc. (META) – parent company of Facebook
- Visa Inc. (V) – a renowned card firm
It is worth noting that the Buy-rating ratio, which represents the proportion of Buy ratings to total ratings, averages around 91% for these stocks – significantly higher than the S&P 500’s average of approximately 55%. Furthermore, these stocks have demonstrated an average total return of about 36% over the past year.
Earnings Momentum
In addition to the impressive performance and positive sentiment surrounding these stocks, they have also experienced a notable boost in their estimated 2024 earnings. Over the past three months, these estimates have increased by an average of 4%. On the other hand, the average stock in the S&P 500 has witnessed a more modest growth of around 2%.
These findings further reinforce the potential of these companies as promising investment options for the year 2024.
Top Performing Stocks of the Past Year
Over the past year, the top 15 stocks that were most loved by investors have delivered impressive returns, averaging around 22%. This easily outpaced the overall market performance. In fact, only three out of the 15 stocks (20%) posted a negative return, while approximately 42% of the stocks in the S&P 500 experienced a decline.
Interestingly, some of these top-performing stocks from a year ago have maintained their popularity. Alexandria, Amazon, Axon, ServiceNow, Alphabet, Jacobs, Dexcom, and Visa have all retained their status as well-liked stocks. The average return for these seven stocks over the past year is about 20%.
It appears that Wall Street has successfully identified winning stocks recently. Additionally, stocks with rising earnings estimates have also shown promising results.
Among the stocks that have seen their 2024 earnings estimates increase in the past three months, only 25% have a negative return over the past year. This is significantly lower than the 42% negative return observed for the overall index. On average, the stocks with rising estimates have delivered returns of approximately 18% over the past year, outperforming the average stock in the S&P 500 which had a comparable return of only 8%.
In light of these findings, it may be prudent to stick with Wall Street’s top ideas as we head into the new year. However, it’s important to note that a screen should serve as a starting point for investing. Once the list of potential investments has been narrowed down, thorough research on companies, their strategies, competitive positions, industries, and management teams becomes crucial.
Write-up by Al Root
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