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🔧 If It Ain't Broke, Don't Fix It
Plus, stock picks for a strong second half
Happy Sunday to everyone on The Street.
The job market data released this week was, to say the least, less than stellar.
We did see nonfarm payrolls increase by 206,000 in June, which was higher than expected.
However… this was overshadowed by the fact that unemployment climbed to 4.1%, the highest level since October of 2021. Additionally, wage growth for the last 12 months ending in June slowed to 3.9%, the smallest gain since August of 2021.
That said, bad news for the job market could be good news for the stock market.
The Fed has two main goals: achieve low inflation and a strong labor market. So, signs of a job market on the cusp of cracking could mean rate cuts are coming sooner than previously expected.
Plus, our partner helps you invest in high-end whiskey before bottling begins.
ICYMI: Here’s what drove the markets last week and what to keep an eye out for in the coming week.
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If It Ain’t Broke, Don’t Fix It
BofA’s Top Stock Picks
As we hit the halfway point of 2024, some Wall Street titans are highlighting their favorite buys for the remainder of the year.
Bank of America’s (BAC) list of favorites honed in on mega tech names with a few other options sprinkled in.
There’s certainly a theme rippling through the picks: stick with what’s been working.
Can You Take Me Higher?
Nvidia (NVDA) has been on an absolute tear, and BofA doesn’t see it stopping anytime soon.
Analysts write that “recurring software services could open up the next leg of growth” for the tech giant. The bank also touts NVIDIA’s relationships with its customers, saying this will enable it to continue growing revenue.
The stock is up around 150% this year and about 190% over the last twelve months.
Apple Picking
Bank of America is also showing some love to iPhone maker Apple (AAPL).
The main reason for the bank’s optimism is rooted in its belief that Apple’s services revenue will zoom higher over the next couple of years. Analysts argue that AI integration into the iPhone should drive spending in services.
Outside of tech, the BofA is advocating for Viking (VIK). The cruise line’s stock is up more than 25% since going public in early May. BofA’s team says the cruise operator has carved out a niche with luxury services that generate terrific cash flow thanks to high-income customers.
The list makes it clear that Bank of America thinks investors should stick to some proven winners for the remainder of 2024.
Which stock will deliver the best returns in the second half of 2024? |
More Second Half Winners
A Strong Second Act
The Nasdaq and the S&P closed out at 52-week highs at the end of June to wrap up the first half of the year. Carnegie Investment Counsel’s portfolio manager Christopher Carey has gone on the record saying he is “pretty positive” about the market over the next six months.
According to Carey, tech, financials, energy, and communications are a few industries investors should consider for their portfolios for the remainder of 2024.
Cintas
Cintas (CTAS) is one of Carey’s top picks for the next 6 months. The portfolio manager is bullish on its size, scale, and acquisition activity. According to Carey, the business services company’s competition usually either ends up selling to it or crumbling financially.
Shares are up 18% YTD and 44% over the past 12 months. About 50% of analysts covering the stock give it a buy or overweight rating. It has an average price target of $710.34, around a 1% upside from Wednesday’s close.
Charles Schwab
Carey also likes financial services giant Charles Schwab (SCHW). The firm has recently shifted to a stronger focus on registered investment advisor (RIA) services. According to Carey, this has been a catalyst for growth in both its client base and assets under management.
Carey believes that funds contributed to RIAs will surpass the bank and brokerage industry in the next few years, at which point Schwab could be a reinvented company. Shares are up 7% YTD and 28% over the past 12 months the average price target gives shares around an 8% upside.
These two companies have Carey bullish on their futures, and investors can start choosing their own stellar lineup for the second half of 2024.
Which stock do you think will outperform over the next 12 months? |
Charlie Munger’s “Miracle” Company
The Bet Paid Off
When Berkshire Hathaway (BRK) unveiled a $230 million investment into Chinese EV startup BYD (BYDDY) in 2008, it was met with some skepticism. This was seen as an unusual move for the vaunted firm.
Berkshire’s bet on BYD proved worth it in a big way, with its stake in the company reaching a peak of $8 billion. Lately, Buffett's firm has been liquidating its position, which currently sits at a 5.99% stake.
Giving Credit Where It’s Due
Warren Buffet is quick to give his late partner, Charlie Munger, all of the credit for the investment idea. When Berkshire’s investment was made public, Munger defended BYD at length, urging that it was far from a speculative move.
Munger called BYD’s transition from mobile phone batteries to the auto industry in 2003 a “miracle.” These days, it’s the biggest car brand in China and a major player in the EV battery space.
A Strong Q2
At the end of 2023, BYD overtook Tesla (TSLA) as the top-selling EV manufacturer in the world. Despite its massive gains since Berkshire’s initial investment, the company is showing no signs of slowing down.
The stock is up 10% YTD, and the company sold a record number of EVs in Q2. It also saw a 21% increase in quarterly EV sales. China is the world’s largest EV market, and BYD is dominating it.
Are you bullish or bearish on BYD (BYDDY) over the next 12 months? |
TOGETHER WITH VINOVEST
It’s no secret that investors love strong returns.
That’s why 250,000 people use Vinovest to invest in fine whiskey.
Whiskey has consistently matured and delivered noteworthy exits. With the most recent exit at 30.7%, Vinovest’s track record supports whiskey’s value growth across categories such as Bourbon, Scotch, and Irish whiskey.
With Vinovest’s strategic approach to sourcing and market analysis, you get access to optimal acquisition costs and profitable exits.
How do you view Card Factory (CARD-GB) stock?
🟨🟨🟨⬜️⬜️⬜️ Buy it
🟩🟩🟩🟩🟩🟩 Toss it in the bin
Are you bullish or bearish on Hyundai (HYMTF) and Kia (KIMTF) over the next 12 months?
🟩🟩🟩🟩🟩🟩 🐂 Bullish
🟨⬜️⬜️⬜️⬜️⬜️ 🐻 Bearish
Are you bullish or bearish on Williams Companies (WMB) over the next 12 months?
🟩🟩🟩🟩🟩🟩 🐂 Bullish
⬜️⬜️⬜️⬜️⬜️⬜️ 🐻 Bearish
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