CNBC Overtime’s Post

Some companies fall through the cracks of coverage not because they’re too small, but because their shares don’t trade enough or are too tightly controlled by insiders... Yet if the dynamics were a bit different, they’d likely be in the spotlight of short-sellers because their stocks make zero sense. I’m currently looking at two companies like this... Neither has real coverage on Wall Street. One holds a pre-recorded earnings call; the other holds a live call but with no analysts and no questions. Still, the stocks of both have more than doubled over the past two years to record highs, with valuations to match: One trades at more than 45-times last year’s earnings; the other, more than 60-times. And these aren’t penny stocks... One has a market value of more than $25 billion; the other, more than $5 billion. One has revenue of more than $3 billion; the other, nearly $1 billion. One trades, on average, about $40 million a day; the other, closer to $13 million. One is up on what appears to be an unsustainable surge of revenue and earnings; the other, as best I can tell, has been rising thanks to being in the right place at the right time with the right products… feeding into the narrative du jour. Lurking somewhere in the background and powering the shares of both, it would appear, is the silent hand of momentum-fueled, algorithmic-inspired passive investing. But live by the algo, die by the algo... You might say both are levitated by algo-driven lunacy. And when the trends driving them higher reverse – and they will reverse – the algos will trigger selling as fast as they sparked buying. As a result, both are being added to my Red Flag Alerts as stocks to avoid. (Yes, it's behind a paywall, but if you're interested, the link is in my comments below.)

For momentum investors: Here is a list of 25 stocks in the S&P 500 that have shown significant gains over the past year, while the companies' earnings estimates have risen even more rapidly.

The S&P 500 looks set to finish March in the green. That means stocks have now been on a winning streak for five consecutive months. What’s even more impressive is how that rally has carried on last year’s momentum, with more stocks joining in on the upside. While the Magnificent 7 accounted for 60% of 2023’s S&P 500 returns, this year has flipped the script, with “everything else” now contributing that amount instead. This edition of Top Market Takeaways dives into the moves that defined the quarter and breaks down what it all means.

Market breadth - how many stocks are participating in a given move in an index or on a stock exchange. A key factor behind the equity market's strength lately has been earnings results. Fourth quarter U.S. earnings are set to rise by just over 3% year-over-year, roughly double the expected pace. Though not remarkable in absolute terms, this growth is notable given the anticipated drag from higher interest rates on operating profits. Earnings results were especially strong across some pockets of the Consumer, Industrials, and Technology sectors. The “Magnificent Seven” technology-centric stocks, which make up nearly 30% of the U.S. S&P 500 index, have been crucial to driving the market’s overall earnings growth due to their sheer size and influence. Without their contribution, earnings growth would have declined by 4% year-over-year. In other words, while the U.S. market’s earnings growth looked fine relative to expectations, the strength of its underlying companies may be overstated given the lack of breadth.

Over the past few weeks, the U.S. stock market has gone through an abrupt rotation out of the largest capitalization tech stocks and into small cap stocks. Read below to learn why this is happening now and what investors should do.

Value vs Growth Stocks. Growth investors seek companies that offer strong earnings growth while value investors seek bargain stocks that appear to be undervalued. Here's how to estimate THE VALUE OF A COMPANY whether they are a growth or value stock. https://bit.ly/3P9AhF4

InvestorPlace: Your ticket to stock market success in the second half of the year. This exclusive report reveals 7 carefully selected stocks poised for major gains. Our experts analyze each company's financials, growth potential, and competitive advantages to identify the most promising momentum plays. Whether you're looking for growth, dividends, or an inflation hedge, these stocks have what it takes to outperform.

This is an interesting article on the performance of the S&P 500. While the overall S&P 500 index has shown a strong recovery based on the performance of a few stocks, the gains are not evenly distributed, and several companies across various sectors are still working to recapture their earlier losses. Question for everyone: Are you seeing a rebound in your stock portfolio? Comment below https://lnkd.in/gQ3BEQUQ Where are you investing today?

Dividend-paying stocks are often perceived as bland investments, but investors shouldn’t discount them. Many are choosing to reduce risk in their portfolios by shifting some gains from growth stocks into dividend-paying stocks. Interested? Let's discuss. https://bit.ly/3UCvTkL

A large group of stocks are reporting earnings next week — and some could be in for notable moves if history repeats itself. More than 150 companies in the S & P 500 will release financial reports next week, according to FactSet. It comes during what is shaping up to be a strong earnings season, with nearly 4 out of 5 companies that have reported exceeding Wall Street expectations.