Top 5 Stocks to Buy for 2024 Returns [and the 10 Stocks to Avoid]
TLDRIn this market update, the focus is on Wall Street analysts' top stock picks for the rest of the year, including sectors like energy, utilities, and real estate, which are trading under their average PE ratios. The S&P 500's price-to-earnings ratio is currently higher than the 10-year average, and there's optimism for earnings growth. However, the market's performance is mixed, with some stocks like First Solar and AES showing potential for recovery due to increased electricity demand. On the other hand, stocks that have performed well recently may be nearing their peak, according to analysts. The video also discusses the unique case of Trump Media's ticker DJT, which is experiencing high volatility due to a combination of factors, including short interest and option premiums. Lastly, the potential for the utility sector to become a surprise performer is highlighted, given the growing demand for electricity from AI and crypto operations.
Takeaways
- 📈 The S&P 500 has seen a 46% rise from the start of the 2022 bull market and is up 10% this year alone, but analysts' expectations for further 2024 gains are modest.
- 🎯 Oppenheimer has increased its target for the S&P 500 to 5500, a 4.7% increase from the previous week's closing price.
- 🔢 Analysts estimate S&P 500 companies will report $243 in cumulative earnings for 2024, anticipating a 10.6% earnings growth over the last year.
- 📊 The S&P 500 is currently trading at 23.6 times the price to earnings ratio, 12% higher than the 21 times average multiple over the last decade.
- 🏠 Sector-wise, energy, utilities, and real estate stocks offer relative valuation, while technology, materials, and communication services are more expensive.
- 🌐 Tech stocks are expected to continue outperforming with the biggest difference between current prices and analyst estimates.
- 📉 Despite lagging performance, analysts have low expectations for the utilities sector with only a 4% increase projected for the next year.
- 🚀 Companies like First Solar and AES could benefit from the increased demand for electricity due to AI operations and renewable energy trends.
- 💡 The top five stocks to avoid have seen an average 44% increase over the last year, indicating that they may have already had their best run.
- 📌 The Trump Media & Technology stock (DJT) has experienced significant volatility due to high short interest and limited shares available for lending.
Q & A
What was the performance of the analyst top stocks in the previous update?
-In the last update, one of the analyst top stocks experienced a 70% increase, and the group overall was up by 25%.
What is the purpose of the weekly market update by Bai Nation Joseph?
-The purpose of the weekly market update is to highlight stocks to watch for the upcoming week, provide insights on market trends, and offer a list of stocks to buy and avoid based on Wall Street analysts' recommendations.
What is the special offer from Seeking Alpha premium mentioned in the script?
-The special offer is a $60 discount on Seeking Alpha premium access for the next 3 days, with the coupon available in the description of the video.
What is the current market condition according to the script?
-The market is up 46% from the 2022 start of the bull market and 10% this year alone. However, analysts' expectations for further 2024 gains are modest, with Oppenheimer upping its target for the S&P 500 to 5500, which is only 4.7% higher than the previous week's closing price.
What is the forecast for earnings growth in the S&P 500 Index according to analysts?
-Analysts forecast a cumulative $243 in earnings for the S&P 500 Index companies through 2024, marking a 10.6% earnings growth over the last year. They also predict another 133% earnings growth to $276 per share for the following year.
Which sectors are trading under their 5 or 10-year average PE ratios?
-The sectors trading under their 5 or 10-year average PE ratios are energy, utilities, and real estate.
What are the expectations for technology stocks according to Wall Street?
-Wall Street sees technology stocks continuing to be the big winner for the next year, with the biggest difference between current prices and analyst estimates at 10% higher over the next year.
Why are some analysts not confident in the utilities sector?
-Analysts have little faith in the utilities sector due to their lagging performance and expectations for stocks to rise by only 4% over the next year.
What is the main reason for the high valuation of Trump media and Technology ticker DJT?
-The high valuation of DJT is primarily due to the company's reported 9 million sign-ups and active monthly users of around 5 million, combined with the fact that Donald Trump holds two-thirds of the shares outstanding.
What is the significance of the recent deal between Steward and United Health for Medical Properties Trust (MPW)?
-The deal allows Steward to potentially pay back almost all of its loans to MPW, which is a positive step forward. However, the deal still needs approval by the Massachusetts Health Policy Commission and is subject to further financial adjustments and asset sales by MPW.
Which sector has shown potential for surprise performance in the coming year?
-The utility sector has shown potential for surprise performance due to the increased demand for electricity from AI operations and crypto, which could lead to higher profits for utilities with spare capacity to sell.
Outlines
📈 Market Update and Special Offers
The speaker, Joseph, provides a weekly market update, highlighting the performance of analyst top stocks and offering insights into the stocks to watch. He mentions a special offer from Seeking Alpha Premium, a research tool he has used for over seven years, which is offering a discount for the next three days. The market update also touches on the overall market performance, with the S&P 500 index targets and the expected earnings growth for 2024. The speaker emphasizes the importance of using these analyst picks as a starting point for one's own stock research.
🔍 Sector Analysis and Stock Performance
This paragraph delves into a detailed analysis of various stock sectors and their performance. The speaker discusses the price to earnings (PE) ratios and how they compare to historical averages. He points out that sectors like energy, utilities, and real estate are relatively undervalued, while technology, materials, and communication services are overvalued compared to their 10-year averages. The speaker also shares his views on Wall Street's expectations for the upcoming year, noting that tech stocks are expected to continue outperforming other sectors.
🏥 Medical Device Industry and Specific Stock Insights
The speaker discusses the challenges facing the medical device industry, specifically insulin delivery systems, due to a potential decrease in demand. Despite this, he believes that companies like Insulet Corporation (POD) could show resilience. He also covers other stocks such as First Solar (FSLR) and AES Corporation (AE), which have struggled over the past year but have the potential for significant upside based on analyst price targets. The speaker advises looking beyond the surface to understand the underlying demand and potential for growth in these sectors and companies.
Mindmap
Keywords
💡Stock Market
💡Analyst Picks
💡Price to Earnings Ratio (PE Ratio)
💡Earnings Growth
💡Sector Analysis
💡Short Interest
💡Bull Market
💡Earnings Report
💡Trump Media and Technology (DJT)
💡Seeking Alpha Premium
Highlights
Previous stock picks led to significant gains, with one stock jumping 70%.
Wall Street analysts' favorite picks can be a good starting point for stock investments.
Seeking Alpha premium is a valuable research tool used for over 7 years.
A special promotion for Seeking Alpha premium offers $60 off, valid until April 3rd.
The market is up 46% from the 2022 start and 10% this year alone, but 2024 gains are expected to be modest.
Oppenheimer increased its S&P 500 target to a Wall Street high of 5500, only 4.7% higher than the previous week's closing price.
Earnings growth for the S&P 500 Index companies in 2024 is forecasted at 10.6%.
The S&P 500 is trading at 23.6 times on a price to earnings basis, 12% higher than the 21 times average over the last decade.
Energy, utilities, and real estate stocks are the only ones trading under their 5 or 10-year average PE ratios.
Technology stocks are expected to continue outperforming with the biggest difference between current prices and analyst estimates.
Despite lagging performance, analysts have low expectations for the utilities sector with only a 4% increase expected over the next year.
First Solar and AES are highlighted as potential stocks to watch due to increasing electricity demand.
The top five stocks to avoid are up an average of 44% over the last year, indicating they may have already had their best run.
Trump Media and Technology ticker DJT has seen wild fluctuations due to its conversion from DWAC shares and high short interest.
Medical Properties Trust saw a 15% increase due to positive news regarding its largest tenant, Steward.
Utility sector stocks may become surprise performers with the growing demand for electricity due to AI operations and crypto.
Federal Reserve officials have numerous speaking engagements but are unlikely to provide new insights to the market.
Q1 earnings reports are expected to show profits grew 3.6% from a year ago, potentially beating expectations.