In the current market environment filled with uncertainty and lack of a clear economic trajectory, it may be wise for investors to shift their focus towards quality stocks. According to Piper Sandler, investing in stocks with attractive value, cash flow profitability, realized growth, and expected near-term growth can offer a sense of stability during turbulent times. These characteristics not only provide a solid foundation for potential returns but also help mitigate risks associated with market volatility.
Piper Sandler’s Macro Select model, which emphasizes quality fundamentals at a reasonable price, has demonstrated impressive returns over the past year. Sitting in the top decile of excess return, the strategy has successfully captured macro tailwinds since its inception in 2018. This track record showcases the resilience and strength of quality stocks in navigating market challenges and uncertainties.
Among the names in the S&P 1500 index that have recently moved into the “most attractive” rankings of Piper Sander’s Macro Select model are industry giants like Verizon, United Airlines, and Microsoft. These companies exhibit the characteristics of quality stocks and have the potential to deliver sustainable returns to investors over the long term.
Verizon, a communications services giant, has shown promising signs of attractiveness by moving up in rankings within Piper Sandler’s model. Despite mixed analyst ratings, the company’s exposure to improving subscriber trends and healthy dividend cover has attracted investor attention. With a potential upside of 5.3%, Verizon presents itself as a quality stock to consider in a market environment filled with uncertainties.
United Airlines, although facing challenges related to its fleet of Boeing aircraft, remains a quality stock worth considering. Despite recent setbacks, the company has maintained strong analyst buy ratings and a potential upside of nearly 42%. By addressing operational issues and capitalizing on growth opportunities, United Airlines has the potential to deliver long-term value to shareholders.
Microsoft, a standout performer in the tech industry, continues to showcase its potential as a quality stock. With a ranking of 2 in Piper Sandler’s model, the company has received positive endorsements from analysts and a predicted upside of 9.4%. Microsoft’s strategic initiatives, such as the $100 billion data center project with OpenAI, position it as a key player in the evolving tech landscape.
Quality stocks offer a promising investment opportunity during times of market uncertainty. By focusing on companies with strong fundamentals, growth potential, and attractive valuations, investors can build a resilient portfolio that thrives in the face of volatility. Consider allocating a portion of your investment portfolio to quality stocks to weather the storm and capitalize on long-term growth opportunities.