The stock market as a whole hasn’t had a great start to the year, but there have been some outliers. Focusing on these outliers might pay off in the long run and the statistics behind it — especially this month — are very important. The S&P 500’s calendar year performance has matched the direction of January returns approximately 77% of the time. This means when January shows positive returns, the market finishes higher in 84% of these years with an average annual return of 15.5% for the whole year.
Even if January is negative, the market ends higher some 63% of the time, but with a return of around 2.2%. I’m bringing this up because I believe this correlation can also extend to certain stocks. We’ve seen many mega-cap tech stocks perform well last year after a solid January. A lot of big-cap stocks between $50 billion to $100 billion also performed well.
Accordingly, the methodology for this article involves me screening the top 10 stocks traded in U.S. markets with a market capitalization between $50 billion to $100 billion and then sorted by year-to-date performance.
I obviously don’t have an equal level of bullishness or bearishness for all the ten stocks I’m going to discuss, so let’s discuss each of them individually.
A close-up of a financial chart jumping as the large-capitalization value sector changes.
10. Snowflake Inc (NYSE:SNOW)
- YTD Performance: 3.75%
Not the most impressive performance so far, but if you zoom out, the recent recovery is definitely worth discussing. The stock is up by 50% since September 2024. This recovery began a month after Warren Buffett gave up on the stock, though I wouldn’t be too excited about it right now.
Q3 net margin fell by almost 18% to -34.4%. Now, it is expected to be profitable for the full year and analysts expect it to recover its margins starting next year, but I believe the current price is more than generous. You’re paying 233 times forward earnings at the current price, and even if you look at next year’s estimated earnings, you’re still paying 164 times forward earnings.
As such, I don’t think that SNOW stock will end the year with stellar numbers, barring any positive catalysts where the company starts beating expectations by double-digit margins.
9. Equinor ASA (NYSE:EQNR)
- YTD Performance: 3.8%
Equinor (NYSE:EQNR) is an oil and gas company and the YTD performance here is thanks to a small recovery from its lackluster performance since August 2022. The stock is still down 38.6% since then.
Regardless, I do think that it is more attractive than most energy stocks at its current valuation since you’re paying less than 8 times earnings due to the dip and you can sit on a 6.9% dividend yield as it recovers. There’s a good amount of upside potential ahead, and combined with the dividends, I think it is a better deal than most other energy companies.
Hedge Fund Resource Center