Top Rated Stocks of the Week - September 9, 2024
As the U.S. stock market experienced a bounce back on Monday after a steep decline the prior week, a few key stocks have emerged as top performers. The Dow ($DIA(DIA)), the S&P 500 ($SPY(SPY)), the Nasdaq ($QQQ(QQQ)) and Russell 2000 ($IWM(IWM)) are in the green. This rally was led by industrials, discretionary, and energy stocks, reflecting investor optimism in the face of upcoming inflation data. Below are some of the top-rated stocks this week, all of which have shown resilience in a volatile market. There are three new additions: UNH, ABBV. UnitedHealth Group ($UNH(UNH)), a major player in the healthcare sector, stands out as a top performer. After a solid Q2 report and a 6.5% post-earnings rally, UNH has attracted attention for its defensive positioning in a market facing rotation away from high-growth tech stocks. UNH's strong earnings execution and its ability to manage volatility in healthcare costs make it a strong contender for continued outperformance. Fundamentally, UNH's diversified portfolio, which includes UnitedHealthcare and Optum segments, contributes to its robust growth. With projected earnings of around $28 per share for 2024 and a dividend yield expected to rise by more than 10% annually, it remains a solid long-term play. Currently trading slightly above its fair value, analysts forecast the stock could reach $600 or more if it sustains its current momentum. With support around $550 and potential upside targets near $665, UNH looks well-positioned to weather upcoming market challenges. Berkshire Hathaway ($BRK.B(BRK.B)), led by Warren Buffett, remains a stronghold in the portfolio of value-oriented investors. Though Buffett has recently reduced positions in Apple and Bank of America, Berkshire itself continues to offer significant growth potential, particularly in its insurance operations. Buffett's focus on preserving long-term value through strategic acquisitions, such as the potential interest in Chubb, positions Berkshire for sustained performance in both growth and defensive sectors. Berkshire Hathaway is also a favorite for those looking to hedge against market downturns, given its large cash reserves and diversified business model. With a strong track record of earnings growth and a focus on capital preservation, BRK.B offers a solid balance of risk and reward for investors. The potential for future acquisitions and the company's vast portfolio make it a compelling choice for long-term investors. AbbVie ($ABBV(ABBV)) has been a standout in the pharmaceutical sector, rising approximately 20% since early July. With its leading treatment, Humira, phasing out due to patent expiration, AbbVie has successfully pivoted to newer therapies like Skyrizi and Rinvoq, which are showing strong growth in treating inflammatory bowel disease (IBD). Both drugs have posted impressive year-on-year growth, helping AbbVie mitigate the revenue loss from Humira. Despite a slight dip in its price-to-earnings ratio due to recent acquisitions, AbbVie's forward outlook remains positive. Analysts forecast a rebound in earnings by 2025, driven by its strong portfolio of IBD treatments and strategic acquisitions in the biotech space. AbbVie's stock currently trades at a premium but offers attractive long-term growth, supported by a solid dividend yield of over 3%. There are several deletions this week: UBER and AMD. This week's rally comes amid high anticipation of upcoming inflation data, which could influence Federal Reserve decisions on interest rates. Stocks like UNH, BRK.B, and ABBV have demonstrated resilience in the face of market volatility and are positioned for further gains in the near term. For investors seeking both stability and growth, these stocks offer compelling opportunities. As always, market conditions can shift rapidly, but these top-rated stocks are showing strength and are worth considering for a diversified portfolio.1. UnitedHealth Group (UNH)
2. Berkshire Hathaway (BRK.B)
3. AbbVie (ABBV)
Outlook for Investors