Selecting the right stocks to invest in for 2024 requires understanding one’s investment goals, which can significantly vary between individuals. For instance, younger investors often look for growth stocks to potentially increase their wealth quickly, while older investors might lean towards dividend stocks to supplement retirement income without depleting their portfolio’s principal. Additionally, checking financial metrics on platforms like finance.yahoo.com, such as dividend yield, revenue growth, and free cash flow, can provide insights into whether a stock aligns with your investment strategy .
When considering which stocks to invest and engage in trading or investing, it’s crucial to prioritize companies with solid brand recognition, healthy financials, and a reasonable price compared to the stock’s all-time high. Amidst a vast array of stock picks, the best stocks to buy might be those recommended by financial experts. James K. Glassman’s selection for the coming year includes names like Alibaba Group (BABA) and Tesla (TSLA), reflecting diverse sectors poised for growth. Moreover, the S&P 500’s impressive rebound in 2023, with a 26.29% total return, could signal a conducive environment for stock investing.
Top Technology Bet: Microsoft
Microsoft’s ascent as a top technology bet for 2024 and beyond is underscored by its robust performance and burgeoning growth potential, especially in the realms of generative AI and cloud computing. Here’s a breakdown of why Microsoft stands out:
- Generative AI and Azure‘s Growth:
- Generative AI is set to provide significant tailwinds for Microsoft, with Azure, its cloud computing arm, experiencing a 20% YOY revenue increase to $25.9 billion in Q2 FY24.
- Azure’s suite of AI services enables businesses to analyze data and automate tasks, showcasing Microsoft’s leadership in AI innovation.
- The AI-powered Copilot software and Bing’s resurgence, thanks to generative AI integration, highlight the company’s forward momentum in AI applications.
- Financial Resilience and Market Leadership:
- Microsoft boasts a strong balance sheet with ample cash reserves, facilitating strategic acquisitions and sustained R&D investments.
- Its market cap has soared above $3 trillion, positioning Microsoft as the most valuable company globally and a leader in generative AI and cloud computing.
- Future Growth Prospects:
- The company is well-positioned to capitalize on the AI revolution, with Azure cloud deployments and Copilot software reshaping industries.
- Analysts are optimistic about Microsoft’s long-term revenue growth, backed by its CAPEX, user base, and data capabilities in the generative AI services market.
- Wall Street analysts have identified Microsoft as a top pick for 2024, with AI driving incremental growth across its core franchises.
Emerging Power in Asset Management: Ares Management
Ares Management is emerging as a formidable force in the asset management sector, boasting a substantial $111 billion in ‘dry powder’ ready for investment. This strategic positioning is set to catalyze swift earnings growth throughout 2024. Here are some pivotal highlights:
- Financial and Operational Milestones:
- Assets under management surged by 19% to $418.8 billion in Q4 2023, marking Ares Management’s second-largest fundraising year.
- A notable strategic move includes plans to invest in high-quality distressed office buildings in New York, despite office buildings only comprising 4% of its real estate portfolio, underscoring a calculated underweight strategy.
- Dividend Growth and Market Position:
- The company announced a 21% quarterly dividend increase to 93 cents a share, reflecting confidence in its financial health and future prospects.
- Ares Management’s stock is trading near its record high, indicating strong market confidence and a potential buy point for investors.
- Looking Ahead: Investment Opportunities:
- Ares Management is eyeing significant opportunities in alternative credit and infrastructure debt, areas expected to remain attractive in 2024.
- The company is also exploring growing investment opportunities in commercial real estate debt and sustainability-linked loans in private credit, underpinned by a thorough analysis of inflation and rising rates’ impact on infrastructure assets.
Revolutionizing Weight Loss: Eli Lilly
Eli Lilly is revolutionizing the weight loss market with its groundbreaking obesity drug, tirzepatide, marking a significant advancement in the treatment of obesity. This drug not only showcases impressive weight loss results but also positions Eli Lilly as a leader in the rapidly growing weight loss sector.
- Key Attributes of Tirzepatide:
- Acts as a dual glucose-dependent insulinotropic polypeptide (GIP) and glucagon-like peptide-1 (GLP-1) receptor agonist.
- Average weight reduction of 22.5% in patients.
- Received Fast Track designation from the FDA for obesity treatment.
- Financial and Market Impact:
- Expected to generate peak sales of $3 billion annually.
- The weight loss market is projected to reach $295.3 billion by 2026, with Eli Lilly poised to capture a significant market share.
- Predicted to outperform other approved obesity drugs, with potential sales reaching up to $81 billion by 2030, including next-generation drugs.
Eli Lilly’s comprehensive approach extends beyond tirzepatide, as the company also focuses on developing treatments in neuroscience, oncology, and inflammation and immunology. This diversified strategy, coupled with the anticipated success of tirzepatide, underscores Eli Lilly’s robust growth prospects and its pivotal role in transforming the weight loss and broader healthcare landscape.
Redefining Mobility and Delivery: Uber Technologies
Uber Technologies is redefining mobility and delivery, with its stock price at $77.16 as of April 6, 2024, and analysts predicting a bullish future. Here’s a detailed look at Uber’s promising trajectory:
- Stock Price Projections:
- Current Price: $77.16 (April 6, 2024)
- End of 2024: $110
- Mid-2025: $150
- End of 2027: $200
- 2029: $250
- 2033: $300
- Financial Performance Highlights:
- 2024 Earnings Growth: 36.9%
- 2024 Revenue Growth: 15.8%
- 2025 Earnings Growth: 62.4%
- 2025 Revenue Growth: 15.7%
- Q4 2023 Revenue: $9.9 billion (15% YoY increase)
- Q4 2023 Total Trips: 2.6 billion (24% increase)
- Strategic Advantages:
- Mobility and delivery segments constitute 88% of total Q4 2023 revenue.
- Analysts have revised earnings and revenue growth estimates upwards more than 20 times in the last three months.
- Positive operating income achieved in two consecutive quarters, with no negative impact foreseen from the macroeconomic environment.
- Network effects enhance value for both riders and drivers, with 142 million monthly active users reported in Q3 2023.
Uber’s ambitious growth estimates, robust financial performance, and strategic market positioning underscore its potential as a top stock pick for investors looking to capitalize on the evolving mobility and delivery sectors.
Financial Strength in Banking: East West Bancorp
East West Bancorp, Inc. (EWBC), with its significant presence both in the United States and Asia, stands out as a robust entity in the banking sector. As of December 31, 2023, the company’s total assets reached $69.6 billion, showcasing its financial strength. The bank’s journey began in 1973, primarily serving the immigrant Chinese-American community, and has since evolved into a full-service commercial bank with a strong focus on the U.S. and China markets. Notably, East West Bank is the largest independent bank headquartered in Southern California, operating over 120 locations across the U.S. and Asia.
Key Highlights:
- Cross-Border Expertise: One of the few U.S. banks with a full banking license in China, East West Bank leverages its extensive cross-border banking experience to serve a diverse clientele.
- Market Presence: With branches in strategic locations including California, Georgia, Illinois, and New York, the bank caters to a broad demographic, emphasizing its role as the leading bank for the Asian community in the U.S.
- Operational Segments: East West Bancorp’s operations are divided into Consumer and Business Banking, and Commercial Banking, each offering tailored financial products and services through domestic branches and digital platforms.
Despite facing challenges such as regulatory complexity and market concentration risks, East West Bancorp’s unique positioning and strategic focus on technological advancements present significant growth opportunities. The bank’s proactive approach in addressing potential geopolitical tensions and competitive pressures further underscores its resilience and adaptability in a dynamic financial landscape.
Conclusion on Stocks to Invest In
As we navigate through the evolving economic landscape of 2024, several key factors emerge, guiding investors in their pursuit of the best stocks to invest in. These insights not only reflect the current financial climate but also project future trends that could influence investment decisions:
- Economic Indicators and Market Trends:
- The Federal Reserve aims for a 2% inflation target, aligning with current core inflation rates excluding rent. This stability is crucial for market confidence.
- Interest coverage ratios in the private credit market stand strong at 2x+, indicating healthy corporate financials.
- Despite a downturn in certain real estate sectors, modern apartments with appealing amenities continue to attract high-income tenants, suggesting selective growth opportunities in the real estate market.
- Sector-Specific Insights:
- The technology sector, especially AI, is poised for continued success, buoyed by anticipated advancements and market demand.
- Healthcare, with a projected 17.8% earnings growth, emerges as a promising sector, especially for stocks like Eli Lilly, which are at the forefront of significant medical breakthroughs.
- Financial services and energy sectors, historically strong performers in election years, remain areas of interest for investors looking for stability and growth.
- Investment Strategies:
- For those eyeing a soft economic landing, growth stocks, particularly in the technology sector, offer exciting prospects.
- Investors wary of persistent inflation might find solace in defensive sectors like healthcare and consumer staples, known for their stable earnings.
- With the S&P 500’s analyst price target suggesting an 8.5% upside, strategic stock selection becomes paramount, emphasizing the importance of diversification and sector-specific analysis to mitigate risks and capitalize on growth opportunities.
These considerations underscore the importance of a balanced, informed approach to selecting stocks to invest for 2024, blending optimism with caution to navigate the complexities of the investment landscape.
