Top 5 Momentum Stocks for November Amid a Volatile Wall Street
Wall Street closed in negative territory in October although the month generally remains favorable for investors. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — tumbled 1.4%, 2.2% and 2.8%, respectively, in October. Notably, this was the third consecutive monthly negative closing for U.S. stock markets after witnessing an impressive bull run in the first seven months of 2023.
At this stage, market participants are concerned about how Wall Street will behave in November. We have identified three factors that are likely to help Wall Street regain its mojo. First, November marks the beginning of the festive season. Historically this month is the best-performing month on Wall Street.
Second, after three consecutive months of decline, stocks of several corporate giants with a well-established business model internationally, a robust financial position and globally acclaimed brand recognition are currently available at attractive valuations.
Third, the inflation rate has been systematically dwindling since its peak in June 2022, barring some minor fluctuations. This indicates that the Fed’s policy of tight monetary control and a higher interest rate regime are finally paying off.
Year over year, the core (excluding volatile food and energy items) PCE price index — Fed’s favorite inflation gauge — increased 3.7% in September compared with 3.9% in August. The metric for September was the lowest since November 2021 and the second successive below 4% reading in nearly two years.
Our Top Picks
At this stage, it will be prudent to invest in momentum stocks. We have narrowed our search to five large-cap (market capital > $10 billion) stocks that have strong momentum for November. These companies have strong potential for the rest of 2023.
These stocks have seen positive earnings estimate revisions in the last seven days. Each of our picks carries a Zacks Rank #1 (Strong Buy) and has a Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price erformance of our five picks in the past month.
Image Source: Zacks Investment Research
AppLovin Corp. APP is engaged in building a software-based platform for mobile app developers to enhance the marketing and monetization of their apps in the United States and internationally. APP provides a technology platform which enables developers to market, monetize, analyze and publish their apps.
AppLovin has an expected revenue and earnings growth rate of 9.7% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the last seven days.
JPMorgan Chase & Co. ‘s JPM second-quarter 2023 results show the impacts of the First Republic Bank buyout, higher rates and a worsening economic outlook. High rates, global expansion efforts and decent loan demand should support the net interest income (NII) of JPM. Our estimates for NII (managed) indicate a CAGR of 5.8% by 2025. With green shoots visible in the investment banking (IB) business, IB fees are likely to see a turnaround soon.
JPMorgan Chase has an expected revenue and earnings growth rate of 22.6% and 37.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last seven days.
Pinterest Inc. PINS is making solid progress in deepening user engagement on the platform. Focus on improving operational rigor and integration of cutting-edge AI models will likely boost relevancy and personalization. The corporate strategy to introduce more actionable content on the platform from a wide range of sources has resulted in a healthy growth in engagement metrics across all regions.
PINS’ mobile deep linking product is helping retailers make more purchases through their mobile apps. PINS has significantly propelled shopping ads revenue growth. Advanced tools such as Travel Catalog and Premier Spotlight empower advertisers to reach target audiences with greater precision.
Pinterest has an expected revenue and earnings growth rate of 8.3% and 56.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last seven days.
Cincinnati Financial Corp. CINF continues to grow premiums through a disciplined expansion of Cincinnati Re while the division makes a nice contribution to its overall earnings. Price increases and a higher level of insured exposures are positives. CINF is focused on earning new business through appointing new agencies and believes agent-focused business model will drive long-term premium growth.
CINF expects 2023 property-casualty premium to grow 8% while its agent-focused business model will drive long term premium growth. CINF boasts a solid capital position supporting effective capital deployment. Consistent cash flow and sufficient cash balances continue to boost liquidity.
Cincinnati Financial has an expected revenue and earnings growth rate of 9.9% and 20.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the last seven days.
Vertiv Holdings Co. VRT designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. VRT offers hardware, software, analytics and ongoing services.
Vertiv Holdings has an expected revenue and earnings growth rate of 20.3% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.5% over the last seven days.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
AppLovin Corporation (APP) : Free Stock Analysis Report
Pinterest, Inc. (PINS) : Free Stock Analysis Report
Vertiv Holdings Co. (VRT) : Free Stock Analysis Report
