Quant Ratings Updated on 61 Stocks Dear Reader, Well, February is in the books. And it turned out to be one of the best Februarys ever for the S&P 500.
The S&P 500 rallied 5.2% higher last month, which Bespoke Investment Group pointed out has only happened 11 times since 1928. Interestingly, after posting 5% or more gains in February, the S&P 500 has historically continued to meander higher. The index has posted an average 3.7% gain for the rest of the year, with gains 80% of the time.
So, what can we expect in March?
Well, I should first point out that we’ve just experienced four straight months of incredible gains for the S&P 500. The index has rallied a whopping 25% since the October 27 low! So, the consolidation and profit-taking we saw today isn’t surprising. However, March is historically a seasonally strong month for the stock market, and I suspect that the S&P 500 will stay true to precedent and climb higher.  The reality is that March will likely be characterized by wave-after-wave of positive analyst earnings revisions. The fourth-quarter earnings results were incredible, with 73% of S&P 500 companies topping analysts’ earnings estimates. The S&P 500 achieved an average of 4% earnings growth in the fourth quarter, which was well above expectations for negative earnings growth at the start of the season. Given that fourth-quarter earnings surprises were so strong, the analyst community has already started to revise first-quarter estimates higher. In fact, analysts have upped earnings estimates by an average of 5.3% for my average Accelerated Profits growth stocks in the past month. As you may know, positive analyst revisions typically precede future earnings surprises.
In other words, I think the market “melt up” will persist – and likely be fueled by the $8.8 trillion sitting on the sidelines in money market assets (which I briefly discussed in this Market 360 article ). So, as this cash pours back into the market, stocks should continue to trek higher over the next several months.
The bottom line is, as I said previously, I think that 2024 is shaping up to be the best year since 1999. But not all stocks are created equally.
The reality is that stocks with solid fundamentals get rewarded more than those with weak fundamentals. That’s why we make sure we have the crème de la crème in our Buy List over at Accelerated Profits – and you should, too. This Week’s Ratings Changes In order to prepare for the next phase of what should be a great year for the market, I took a fresh look at the latest institutional buying pressure and each company’s financial health and revised my Portfolio Grader for 61 big blue chips. Of these 61 stocks, 18 were downgraded from a B-rating (Buy) to a C-rating (Hold), and 22 stocks were downgraded from a C-rating to a D-rating (Sell).
So, in today’s Market 360, I’ll share 10 stocks that are likely to struggle in the current market environment, due to their deteriorating fundamentals. And then, I’ll share where you can find fundamentally superior stocks that truly represent the crème de la crème of the market.
I’ve listed the first 10 stocks rated as Sell below, but you can find the full list – including the stocks’ Fundamental and Quantitative Grades – here.
Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and adjust accordingly. | ALGN | Align Technology, Inc. | D | | BEKE | KE Holdings, Inc. Sponsored ADR Class A | D | | BHPH | BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs | D | | BUD | Anheuser-Busch InBev SA/NV Sponsored ADR | D | | CLF | Cleveland-Cliffs Inc | D | | CVX | Chevron Corporation | D | | EMN | Eastman Chemical Company | D | | EXAS | Exact Sciences Corporation | D | | GILD | Gilead Sciences, Inc. | D | | GIS | General Mills, Inc. | D | Our Secret Sauce... Our fundamentally superior Accelerated Profits stocks have already garnered a lot of investors’ attention recently and should only be driven higher as this cash pours in from the sidelines. In the past four weeks alone, my Accelerated Profits Buy List surged 15.4% higher, versus the S&P 500’s 6% gain.
Needless to say, institutional investors are aggressively accumulating our stocks. And given the perfect storm of positive earnings growth, key interest rate cuts on the horizon and a presidential election year (which is historically bullish), this stunning performance should continue – and many of our powerful growth stocks over at Accelerated Profits have the potential to double (or even triple!) this year.
Now, I’ve been in the investing game for a long time. And much of our Accelerated Profits stocks’ outperformance in February can be attributed to better-than-expected quarterly results. But the real secret behind our performance can also be attributed to the fact that we use the power of artificial intelligence to help us pinpoint fundamentally superior companies that are primed to soar.
I use this series of AI algorithms to sift through massive amounts of data to find the best stocks, stuffing our Accelerated Profits Buy List with stocks that boast stunning fundamentals that aren’t even on the radar of most investors. And given their superior fundamentals, I expect money to flow into these names this year.
To learn more about our financial superintelligence and how you can join Accelerated Profits, click here.
(Already an Accelerated Profits member? Click here to log in to the members-only website now.) Sincerely, |
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