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Zacks has pulled together a few selected stock stocking-stuffers for you.
I. Introduction
2024 was an excellent year to own stocks.
Heeding no particular stock style over another (though Growth worked better), and without being too picky about market capitalization.
Here is a set of facts which confirm it:
YTD returns to December 3rd, 2024?
The narrow DJIA index was up +18.82%
The broad S&P500 was up +26.78%
The tech-heavy Nasdaq was up +29.26%, and
The small cap RUT index was up +20.08%
Across 2023?
The narrow DJIA index was up +13.72%
The broader S&P500 index was up +23.43%
The tech-heavy Nasdaq was up +41.05%, and
The small-cap RUT index was up +13.78%
The historical expected annual return (using data from 1930 to 2021)? +7.9%.
Over the last 30 years? +11.1%.
Can 2025 add to YTD index returns, after a major Nov. 5th U.S. election?
II. Annual S&P500 earnings fundamentals, going forward, do appear sound
Bottom-up investing is an investment approach that focuses on analyzing individual stocks and de-emphasizes the significance of macroeconomic and market cycles.
The latest S&P500 bottom-up target, pulled together by adding up individual company earnings price targets? It is 6,610 for yearend 2025.
Top-down investing is an investment analysis approach that focuses on the macro factors of the U.S. economy, such as GDP, employment, taxation, interest rates, etc. before examining micro factors -- such as specific sectors or companies.
The "top-down" Wall Street sell-side strategist S&P500 macro-inspired targets at year-end 2024?
They look similar to the ones pulled together by the bottom-up company analyst communities.
Now, read on…
Explore what S&P500 sectors and industries covering institutional analysts upgraded, entering the final month of 2024.
Note —
A top-down strategist like me, putting a ‘Market Weight’ on a Zacks sector or a Zacks industry, is similar to a company analyst having a ‘Hold’ rating on an individual stock.
Granting an ‘Attractive’ or ‘Unattractive’ rating to a sector, or industry, is equivalent to a ‘Buy’ and ‘Sell’ individual stock, covering analyst rating, respectively.
Longstanding Zacks research shows stock investors a key insight —
The top 50% of Zacks-ranked industries’ share returns outperform the bottom 50%, by more than a factor of two to one.
Our Zacks Industry Rank is the average Zacks Rank of all the stocks in a specific industry group.
For example, if a given industry has five stocks, with Zacks Ranks of 1 (Strong Buy), 2 (Buy), 2 (Buy), 3 (Hold), and 5 (Strong Sell), the industry's Zacks Industry Rank would be 2.60.
Voila!
2.6 is statistically averaging towards 2, like an individual-stock Buy recommendation.
That becomes a *Very Attractive* Zacks industry rating.
Now, we are prepped.
Together, we can successfully apply this type of stock-selection system, using the latest December 2024 Zacks earnings data.
The reason we need to take this next investing step is a very simple one.
Undertaking these top-down sifting steps can potentially double share returns, over time:
Under this logic, we start from a top sector
Then, we find its top industries
Then, we complete a final step. Identifying its top company share-holdings
This is “top-down.”
III. Zacks December Sector/Industry/Company Telescope
The Nov. 29th, 2024 Zacks Industry Ranks thinned out the ranks of strong sectors.
The latest forced rankings supplied just one Very Attractive sector: Info Tech. The growth is enabled by more “AI” data/cloud centers for Tech, and strong stock values.
Fresh DEC ranks offered up only two Attractive sectors: Consumer Discretionary & Financials.
Zacks Industry Ranks showed three Market Weight sectors: Utilities, Health Care and Communication Services.
There were also a notable four Very Unattractive Sectors: Industrials, Materials, Consumer Staples and Energy.
(1) Info Tech stayed at a Very Attractive rating. Misc. Tech, Semis and Electronics led.
Image: Bigstock
A Holiday Season Investing Report: Zacks December Strategy
The following is an excerpt from Zacks Chief Strategist John Blank’s full Dec Market Strategy report To access the full PDF, click here.
Zacks has pulled together a few selected stock stocking-stuffers for you.
I. Introduction
2024 was an excellent year to own stocks.
Heeding no particular stock style over another (though Growth worked better), and without being too picky about market capitalization.
Here is a set of facts which confirm it:
YTD returns to December 3rd, 2024?
Across 2023?
The historical expected annual return (using data from 1930 to 2021)? +7.9%.
Over the last 30 years? +11.1%.
Can 2025 add to YTD index returns, after a major Nov. 5th U.S. election?
II. Annual S&P500 earnings fundamentals, going forward, do appear sound
Bottom-up investing is an investment approach that focuses on analyzing individual stocks and de-emphasizes the significance of macroeconomic and market cycles.
The latest S&P500 bottom-up target, pulled together by adding up individual company earnings price targets? It is 6,610 for yearend 2025.
Top-down investing is an investment analysis approach that focuses on the macro factors of the U.S. economy, such as GDP, employment, taxation, interest rates, etc. before examining micro factors -- such as specific sectors or companies.
The "top-down" Wall Street sell-side strategist S&P500 macro-inspired targets at year-end 2024?
They look similar to the ones pulled together by the bottom-up company analyst communities.
Now, read on…
Explore what S&P500 sectors and industries covering institutional analysts upgraded, entering the final month of 2024.
Note —
A top-down strategist like me, putting a ‘Market Weight’ on a Zacks sector or a Zacks industry, is similar to a company analyst having a ‘Hold’ rating on an individual stock.
Granting an ‘Attractive’ or ‘Unattractive’ rating to a sector, or industry, is equivalent to a ‘Buy’ and ‘Sell’ individual stock, covering analyst rating, respectively.
Longstanding Zacks research shows stock investors a key insight —
The top 50% of Zacks-ranked industries’ share returns outperform the bottom 50%, by more than a factor of two to one.
Our Zacks Industry Rank is the average Zacks Rank of all the stocks in a specific industry group.
For example, if a given industry has five stocks, with Zacks Ranks of 1 (Strong Buy), 2 (Buy), 2 (Buy), 3 (Hold), and 5 (Strong Sell), the industry's Zacks Industry Rank would be 2.60.
Voila!
2.6 is statistically averaging towards 2, like an individual-stock Buy recommendation.
That becomes a *Very Attractive* Zacks industry rating.
Now, we are prepped.
Together, we can successfully apply this type of stock-selection system, using the latest December 2024 Zacks earnings data.
The reason we need to take this next investing step is a very simple one.
Undertaking these top-down sifting steps can potentially double share returns, over time:
This is “top-down.”
III. Zacks December Sector/Industry/Company Telescope
The Nov. 29th, 2024 Zacks Industry Ranks thinned out the ranks of strong sectors.
The latest forced rankings supplied just one Very Attractive sector: Info Tech. The growth is enabled by more “AI” data/cloud centers for Tech, and strong stock values.
Fresh DEC ranks offered up only two Attractive sectors: Consumer Discretionary & Financials.
Zacks Industry Ranks showed three Market Weight sectors: Utilities, Health Care and Communication Services.
There were also a notable four Very Unattractive Sectors: Industrials, Materials, Consumer Staples and Energy.
(1) Info Tech stayed at a Very Attractive rating. Misc. Tech, Semis and Electronics led.
Zacks #1 Rank (STRONG BUY): Garmin (GRMN - Free Report)
(2) Consumer Discretionary fell to Attractive from Very Attractive. Autos/Tires/Trucks and Non-food Retail/Wholesale looked good.
Zacks #1 Rank (STRONG BUY): Geely Automotive (GELYY - Free Report)
(3) Financials stayed Attractive. Investment Banking & Brokering, Major Banks, & Finance looked best.
Zacks #1 Rank (STRONG BUY): Raymond James (RJF - Free Report)
(4) Utilities stayed at Market Weight. Utility – Gas Distribution looked the best.
(5) Health Care stayed Market Weight. Drugs looked best.
(6) Communications Services stayed at Market Weight. Telco Equipment was the best.
(7) Industrials fell to Very Unattractive from an Attractive rating. Transport – Air, and Pollution Control looked strong.
(8) Materials fell to Very Unattractive from Unattractive. Containers & Glass looked OK.
(9) Consumer Staples fell to Very Unattractive from Attractive. Tobacco and Misc. Staples at Market were the strongest.
(10) Energy stayed at a Very Unattractive rating. Energy-Alternates at Market was best.
Now, let’s wrap up this holiday stock stocking-stuffer package, and deliver it.
IV. Conclusion
These three Zacks Rank #1 (STRONG BUY) large-cap stock picks this month are all equally relevant — for Xmas holiday shoppers.
Pick up a new handheld GPS device, buy a well-priced electric auto or bike, or just open an investing account for someone.
Enjoy the full Zacks December 2024 Market Strategy report.
Warm regards to all this Xmas season!
Very best,
John Blank, PhD.
Zacks Chief Equity Strategist and Economist