In the midst of economic turbulence and market sell-offs, investors are seeking out stocks that demonstrate resilience and promise. According to insights from Citi, identifying stocks that can withstand an economic shakeout while also being attractively valued is crucial in navigating the current volatile landscape. The recent downturn in major averages, fueled by concerns of a looming recession and the unwinding of the Japanese yen carry trade, has prompted investors to reevaluate their portfolios and seek out opportunities that offer stability and growth potential.
Citi’s Post Pullback Shopping List
As part of their analysis, Citi has compiled a “post pullback shopping list” of stocks that meet specific criteria to weather the storm and potentially thrive in the future. These criteria include being within the top 500 of the Russell 1000 by market capitalization, exhibiting an improved growth outlook, having a forecast of no more than a 5% change in earnings estimates for 2024 and 2025, and being buy-rated by Citi. Among the stocks that made the list are industry giants such as Apple, Caterpillar, and Home Depot.
Tech behemoth Apple, despite experiencing a recent dip in stock price following pressure in the broader sector and Berkshire Hathaway’s reduction of its stake, remains a strong candidate for investment. With a year-to-date increase of over 10% tempered by a recent 6% decline, analysts see the current situation as a potential buying opportunity. Apple’s resilience and innovation continue to position it as a solid choice for investors looking for stability and growth in uncertain times.
Caterpillar: Building Momentum
Construction equipment manufacturer Caterpillar has displayed solid performance, with shares up more than 12% in 2024. Following stronger-than-expected second-quarter results, the stock received a boost, although analysts remain cautious in their outlook. While the consensus rating sits at a hold, Caterpillar’s position on Citi’s shopping list indicates underlying strength and potential for growth in the long term.
Home improvement giant Home Depot has faced challenges in 2024 due to higher interest rates impacting demand for larger projects. However, with expectations of a forthcoming rate cut, the stock could see a resurgence as consumer mortgage refinancing increases. Despite underperforming the market thus far, Home Depot’s inclusion in Citi’s recommended list highlights its resilience and potential for a rebound in the coming months.
In addition to Apple, Caterpillar, and Home Depot, other stocks such as Devon Energy and Zscaler present further investment opportunities for those seeking to capitalize on the current market conditions. By carefully evaluating each stock’s performance, growth potential, and position within the market, investors can make informed decisions that align with their financial goals and risk tolerance. As uncertainty looms, strategic investment choices can pave the way for long-term success in the ever-evolving world of finance.