20 Jefferies Picks Built Around The Best Bull Market
- Jefferies strategist Steven DeSanctis says the dynamic investment is poised for a return.
- The approach is to buy stocks that have already proven themselves.
- This is a method that worked extremely well during the last bull market, but has not paid off recently.
The best-known investment maxim is “buy low, sell high”. But sometimes investors can make a lot of money just by buying what’s already hot and betting on continued wins.
This exact approach, called dynamic investing – sometimes coupled with short selling declining stocks – has seen tremendous success over the past few years.
. Instead of letting market leadership shift from industry to industry over time, many of the rising stocks continued to do so for much longer than expected.
The COVID-19 pandemic and stock market crash finally put an end to that. Since then, other tactics have worked much better – for example, simply buying cheap stocks that are statistically cheap, as the old saying suggests.
In fact, Jefferies equity strategist Steven DeSanctis says the momentum has underperformed to an unusual degree. Hot stocks don’t stay that way for very long, he says, and stocks with lower valuations on metrics such as price-to-earnings ratio significantly outperform. DeSanctis says it’s time for this trend to correct.
“The cheapest stocks are beating the most expensive by 36.5% in the past year, and the gap is in the 97th percentile,” he wrote. “It’s way too strong and needs cooling.”
He says that when momentum does this badly, it “comes back” to stronger performance. And when that happens, the more dynamic names do particularly well.
“We believe the price dynamics will regain momentum,” he said. He noted that cyclical stocks such as industries and banks tend to have high momentum scores, so if these stocks continue to perform well, it’s likely that momentum trading will perform better than it does. did recently.
DeSanctis believes investors are also becoming more bullish on small-cap stocks, noting that small-cap ETFs attract more money. Putting these threads together, he’s put together a list of small-cap stocks rated “Buy” that are attracting relatively high commercial interest and have strong price dynamics.
He assessed price dynamics based on changes in the 200-day moving averages of stocks. It’s a popular metric that averages the last 200 closing prices of a stock to get a feel for its long-term price trends. DeSanctis looked for companies whose 200-day moving averages have increased significantly over the past month.
The 20 stocks below are ranked from lowest to highest based on how much their 200-day moving average has changed over the past month, as stocks with larger changes have more momentum in their tracks. the back.