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QTR's 25 Stocks To Watch In 2025

quoth the raven's Photo
by quoth the raven
Tuesday, Dec 31, 2024 - 15:58

Submitted by QTR's Fringe Finance

It is once again that time of year where I lay out what I believe will be the broader themes in the market for the year to come and identify the names I’ll be watching in particular in the year to come.

Once again, last year, my stocks to watch finished in the positive on an equal-weighted basis but failed to keep pace with the S&P 500, which is basically now made up of just the Magnificent Seven stocks. My 24 names I was watching for 2024 finished the year up 18.5% on an equal weighed basis versus 25.8% for the S&P 500, as of market close 12/27/2024. You can view these names here(Disclaimer: I am terrible at math and didn’t double check these numbers at all.)

The three names I added in August, on an equal weighted basis, outperformed the S&P by 63.3% and were up on average 71% in a few short months.

The vibe going into 2025 is interesting. For those who have been paying attention, market breadth over the last two weeks has been awful, with decliners outpacing advancers for something like 10 or 11 days in a row. The top 10 S&P 500 names are the only stocks driving the market gains. 

Thanks to our friends at Zero Hedge, we have Morgan Stanley equity strategist Michael Wilson’s take on breadth. He wrote last week:

One of the key technical factors I’ve used over time to gauge the health of equity markets is the breadth of participation by the underlying stocks.

Recently, we have fielded many questions from clients about breadth, as many have noted that December has exhibited some of the worst breadth in history while stock indices have remained near all-time highs. This anomaly is unusual, but some have concluded that breadth may not matter as much as in the past as a signal for price.

In my experience, ignoring breadth is usually a bad idea, and this past week suggests that breadth has anticipated what we learned on Wednesday – i.e., the Fed may not be able to deliver as much accommodation as markets were expecting.

Ergo, bonds are signaling something is “out of whack” in markets. Zero Hedge again notes that this is “the first time in history when 100bps of rate cuts raised 10Y yields by 100bps” (generally, the two move together directionally, as you can see in the chart).

Meanwhile, in terms of quelling euphoria, fund managers are underweight cash and expectations have never been higher for markets:

To me, this bodes like a rocky year for the market. Heading into 2024, I felt pretty confident about what the geopolitical risks were and what the macro risks were heading into the year. 2025 could surprise some people, in my opinion. I think many people are automatically expecting another 30% upside year for the S&P 500 just because President Trump is in office, and he has guaranteed to deregulate and lower taxes. After all, this is what happened during Trump’s first term as President, up until COVID, so why would anybody expect differently?

Keeping these macro trends in mind, it wasn't as easy to find ideas I'd like to watch for the upcoming year. But, as I always do, I gave it my best...(CLICK HERE TO READ ALL 25 NAMES I'M WATCHING FOR 2025).

QTR’s Disclaimer: Please read my full legal disclaimer on my About page hereThis post represents my opinions only. In addition, please understand I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. Contributor posts and aggregated posts have been hand selected by me, have not been fact checked and are the opinions of their authors. They are either submitted to QTR by their author, reprinted under a Creative Commons license with my best effort to uphold what the license asks, or with the permission of the author.

This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. I may or may not own names I write about and are watching. Sometimes I’m bullish without owning things, sometimes I’m bearish and do own things. Just assume my positions could be exactly the opposite of what you think they are just in case. If I’m long I could quickly be short and vice versa. I won’t update my positions. All positions can change immediately as soon as I publish this, with or without notice and at any point I can be long, short or neutral on any position. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. I edit after my posts are published because I’m impatient and lazy, so if you see a typo, check back in a half hour. Also, I just straight up get shit wrong a lot. I mention it twice because it’s that important.

Contributor posts published on Zero Hedge do not necessarily represent the views and opinions of Zero Hedge, and are not selected, edited or screened by Zero Hedge editors.
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