The 10 best major stocks to invest in, according to analysts

In this article we will talk about The 10 best major companies worth investing in, according to analysts.

Possible rate cuts after the introduction of the Fed

The current economic landscape presents a mixed bag of signals as market participants assess the need for additional interest rate cuts. Despite overall economic strength, the Fed hinted at potential interest rate cuts due to weaknesses in specific sectors. Currency dynamics are also changing, with the US dollar weakening against the euro, which adds another layer of complexity to the market environment. In this situation, the main stock indices, including the Dow Jones, continue to oscillate near record highs.

When analyzing these developments, analysts and market participants must consider how these factors may impact investment strategies in the coming months. Recently, there have been discussions about the consequences of potential interest rate cuts and their impact on various sectors of the economy. Some experts argue that further cuts may be necessary to support smaller businesses and consumers who are still adjusting to previous interest rate increases.

Stephanie Link, chief investment strategist and portfolio manager at Hightower, believes the economy is expected to soft-land despite market volatility, which is a contrasting perspective in the face of market volatility and uncertainty. While there are concerns about the performance of small-cap companies and their ability to keep pace with larger assets, she believes the economy can stabilize without entering a recession. We wrote about this in more detail in our article on the topic 10 best young stocks to buy nowhere is a fragment of it:

“….He believes the Fed is skillfully steering the economy toward a soft landing, even in the face of expected market volatility ahead of the election.

Just 3 weeks ago, the S&P 500 Index fell 4%. Still, it bounced back 4% the following week. It rose another 1% last week to new highs and expressed optimism about buying opportunities amid market weakness, citing better-than-expected economic growth from the latest data, including better retail sales and manufacturing data, as well as a decline weekly unemployment claims are at their lowest level in 4 months. This positive economic environment supports an estimated growth rate of 2.9%, which is expected to have a positive impact on corporate profits.

….Link has seen a growing market trend over the past few months, indicating that while technology has taken the lead, other sectors such as financials, industrials, materials and discretionary stocks are also showing strength.”

John Stoltzfus of Oppenheimer Asset Management appeared on CBNC’s “Squawk on the Street” on September 25 to discuss the difference the Fed’s recent interest rate cut is making. It was emphasized that the S&P 500 is experiencing an extraordinary moment, having just achieved its 41st record close of the year. Oppenheimer’s chief investment strategist set a target of 5,900 for the index, attributing this optimistic outlook to the Fed’s recent interest rate cuts.

Stoltzfus explained that the significance of these reductions lies in their actual implementation after a long period of increases and pauses. He described the rate cut as an advance from the Fed to Wall Street and Main Street, signaling that further cuts could be on the horizon if needed. Since the announcement, the market has shown mixed reactions, with defensive stocks performing well at times, while technology stocks have also seen gains.

Discussing consumer discretionary stocks, Stoltzfus said the sector is one of their favorites, despite poor performance earlier in the year. He noted that there has been a noticeable improvement in performance in recent months as investors recognize consumer resilience. He emphasized, however, that as part of consumer freedom, investors should focus on selected companies and not expect broad growth in the entire sector. Retailers that effectively leverage e-commerce will likely perform better in the upcoming holiday season.

The conversation also touched on concerns about rebates in various sectors, especially in the electronics industry. Stoltzfus acknowledged that value has become a primary concern for consumers, which has led to increased competition among retailers. This competition provides consumers with more choice, but may also put pressure on the profit margins of some retailers. Nevertheless, he noted that many consumer discretionary businesses beyond retail are likely to maintain healthy margins.

In the discussion, Stoltzfus emphasized the positive impact of Fed interest rate cuts on market sentiment and consumer behavior, while recognizing challenges in individual sectors. The outlook remains optimistic as investors navigate these changes and prepare for the potential opportunities presented by consumer stocks and other sectors. With that said, here we are with the list The 10 best major companies worth investing in, according to analysts.

Methodology

We used stock screeners to find large-cap stocks. We then selected the 10 stocks with the highest growth potential (over 15%) that were also the most popular among elite hedge funds as of Q2 2024. Stocks are listed in ascending order of their growth potential.

Why are we interested in stocks that hedge funds invest in? The reason is simple: our research has shown that we can outperform the market by imitating the best stocks of the best hedge funds. As part of our quarterly newsletter strategy, we select 14 small- and large-cap stocks every quarter, and since May 2014, we have returned 275%, beating our benchmark by 150 percentage points (Smore details can be found here).

The 10 best major stocks to invest in, according to analysts

10. Chevron Corp. (NYSE:CVX)

Average growth potential: 18.14%

Market capitalization as of September 26: $263.18 billion

Number of hedge fund holders: 64

Chevron Corp. (NYSE:CVX) is an international energy corporation specializing primarily in oil and gas, and the second largest direct successor to Standard Oil, originally known as Standard Oil Company of California. It focuses primarily on the exploration, extraction and refining of crude oil and natural gas, and also operates in the areas of chemical production and renewable energy.

The company invests in clean and renewable energy. In May, he successfully launched a gas turbine powered by a fuel mixture containing 60% hydrogen. Additionally, it owns a 16.5 MW wind farm in Wyoming that can power more than 13,000 homes a year, and a 49 MW geothermal plant in California that powers 40,000 homes. The company also distributes renewable diesel produced from vegetable oils and animal fats at terminals in California, offering diesel blends containing 6-20% renewable energy.

Chevron Corp. (NYSE:CVX) successfully operated a gas turbine powered by a 60% hydrogen fuel mixture for several days, demonstrating hydrogen’s potential as a cleaner fuel source for industrial processes. The turbine is located near the Pipeline & Power business unit in California.

It increased global production by 11% through the second quarter, with revenue growing 4.67% year-over-year in the quarter, driven by acquisitions and strategic alliances. The company integrated PDC Energy and expanded its exploration base in Namibia, Brazil, Equatorial Guinea and Angola. In the US, net production of oil equivalent increased by 353,000 barrels per day compared to 2023.

This company is a good investment choice due to its diversified operations, strong financial position and consistent returns for shareholders. The company’s integrated energy model, combined with a low debt-to-equity ratio and solid cash flow generation, provides stability and flexibility in the volatile energy sector.

Carillon Eagle Growth & Income Fund stated the following about Chevron Corporation (NYSE:CVX) in Q4 2023. investor’s letter: :

“Chevron Corporation (NYSE:CVX) fell as did crude oil prices and issued a disappointing earnings release due to losses at its overseas refinery. Separately, the company announced an agreement to purchase another offshore energy company operating in Guyana, as well as in North Dakota, the Gulf of Mexico and the Gulf of Thailand. This is a strategic acquisition at a very low take-home premium.”

9. AstraZeneca (NASDAQ:AZN)

Average growth potential: 20.22%

Market capitalization as of September 26: $239.88 billion

Number of hedge fund holders: 49

AstraZeneca (NASDAQ:AZN) is a British-Swedish multinational pharmaceutical and biotechnology company that focuses on the research, development, manufacturing and marketing of prescription medicines. Her main therapeutic areas include oncology, cardiovascular, renal, respiratory and immunology. The company is known for its innovative drug product range and strong global presence.

It has a diversified product portfolio including 12 hit drugs with sales in the number of indications exceeding USD 1 billion. It expands to include heart health, immune system research, rare diseases and new cancer therapies. A recent milestone this year was the approval of Voydeya, a drug used to treat extravascular hemolysis in adults with paroxysmal nocturnal hemoglobinuria (PNH).

The company is working on three promising drugs: Imfinzi for small cell lung cancer, Tagriso for stage three lung cancer and Enhertu for breast cancer brain metastases. These drugs are at an advanced stage of development.

Imfinzi recently received FDA priority review in August after showing a 27% reduction in the risk of death in the Phase 3 ADRIATIC trial. In the Phase 3 DESTINY trial, Enhertu achieved a 62% progression-free survival rate. However, the company’s shares fell 5% in September on disappointing results for its lung cancer drug DATO-Dxd.

Together, these expansions generated revenue of $12.94 billion in Q2 2024, up 13.33% from the year-ago period. Product revenues accounted for 96% of total sales. The company’s HER2 franchise also performed well, with total revenues up 49% in the quarter.

With a strong pipeline of innovative medicines, patent protection and strategic pricing decisions, AstraZeneca (NASDAQ:AZN) is poised to continue to grow its revenue and market share. The focus on life-threatening diseases and emergency treatments reduces the risk of litigation, and the company’s pricing power ensures strong financial performance.

Parnassus Growth Equity Fund stated the following regarding AstraZeneca PLC (NASDAQ:AZN) in its Q2 2024 report. investor’s letter: :

“AstraZeneca PLC (NASDAQ:AZN) gained after reporting solid first-quarter results and setting 2030 targets at Investor Day that exceeded expectations. We continue to believe that AstraZeneca’s strong pipeline and industry-leading oncology innovations should support above-expected revenue growth over the next several years.