Zinger Key Points
- Adam Johnson used a stock screen based on analyst ratings and price target data to identify buying opportunities in the broader market.
- All of the companies that made the list have strong cash flows and faced significant selling pressure this year.
Adam Johnson, portfolio manager at Adviser Investments and founder and author of Bullseye Brief, scoured the S&P 1500 for standout stocks with strong analyst backing. The names on the list could be screaming buys if the market finds its footing in the new year.
What To Know: Johnson used a stock screener to search for names with positive analyst coverage. The screen aimed to identify stocks being covered by at least five analysts with a score of 4.5 out of 5 on Bloomberg's analyst ratings, which typically indicates there are no sell ratings on a stock.
He also looked for stocks that had an average analyst price target that was at least 50% above the current stock price.
"In other words, I'm looking for quality names that are trading at a big discount to the target," Johnson said Wednesday on Benzinga's "Stock Market Movers."
Here's a look at some of the top names on the list:
- Amazon.com Inc AMZN
- Delta Air Lines Inc DAL
- Salesforce Inc CRM
- Signature Bank SBNY
- EQT Corp EQT
- Coherent Corp COHR
All of these names fit the aforementioned criteria, but they also have other similarities.
"These are very high-quality companies ... all with very strong cash flow that have been flushed," Johnson said.
The S&P 500 is down more than 20% since the start of the year and it's on track to log its worst year since 2008.
See Also: Gene Munster Tells Benzinga Where He Thinks Tech Will Go In 2023
"When people are in sell mode — and we have been in sell mode for quite a while now — they just sell everything," Johnson said.
He told Benzinga he doesn't believe long-term investors should be selling into the weakness. While it may feel uncomfortable, this is when investors should be looking for buying opportunities, he said.
If investors don't like the names on the list, they might consider looking for buying opportunities in big tech. That's where institutional investors will be looking to put some money to work when the market turns, he noted.
And Johnson expects the market to turn around sooner than most are anticipating. Everyone is searching for reasons to sell, but a recession might have already come and gone, he said.
"I think the economy is fundamentally too strong," Johnson said.
Check out the full interview with Johnson below:
Photo: courtesy of Amazon.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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