Forget roses. A dozen shares of Wall Street’s best loved stocks might be the perfect gift this Valentines Day.
The annual day designed to express our warmest feelings has Barron’s thinking about love. So we looked for stocks in the
S&P 500
that Wall Street just can’t get enough of. Popularity wasn’t our only filter. We also wanted stocks with attractive upside based on target prices.
This isn’t the first time we have offered a gift to readers. Barron’s has run Valentines Day screens in the past. The results have been mixed.
The 2020 screen was a winner. That one looked at stocks with strong support from Wall Street, based on analyst ratings, and with at least 10% upside implied from analyst price targets. That list included:
Diamondback Energy
(FANG),
Norwegian Cruise Line
(NCLH), health-insurance provider
Centene
(CNC), engineering firm
Quanta Services
(PWR), medical-device maker
Boston Scientific
(BSX), defense contractor
L3Harris Technologies
(LHX), health giant
Cigna
(CI), and
Amazon.com
(AMZN).
Those eight are up an average of 44% over the past three years. The S&P 500 is up about 22% over the same span. Only three of the eight outperformed the market, but the winners won big. Diamond Back and Quanta are up about 100% and 275%, respectively.
The 2022 screen didn’t work out as well. That one only looked at stocks with the highest analyst ratings and included:
Signature Bank
(ticker: SBNY), Amazon (again), Google parent
Alphabet
(GOOGL),
Alexandria Real Estate Equities
(ARE,) and the clinical research firm
IQVIA Holdings
(IQV).
All five are down since Valentines Day 2022 and the average loss is 28%. The S&P 500 is down about 6% over the same span.
This year we are repeating the 2020 effort, looking for both analyst support and upside.
The 2023 dozen, in no particular order, are:
Disney
(DIS), pharmaceutical maker
Bio-Rad Laboratories
(BIO), natural gas company
Targa Resources
(TRGP), air carriers
Delta Air Lines
(DAL) and
Alaska Air
(ALK), pet health firm
Zoetis
(ZTS), tech giants Alphabet and Amazon (again), energy services provider
Halliburton
(HAL), health care firms
UnitedHealth
(UNH and
Humana
(HUM) as well as engineering and construction company
Jacobs Solutions
(J).
| Company / Ticker | Market Cap (bil) | Buy-Rating Ratio | Price | Target | Upside | 2023E PE Ratio | 12-Month Change |
|---|---|---|---|---|---|---|---|
| Amazon.com / AMZN | $1,000.20 | 93% | $98.93 | 134.31 | 36% | 63 | -35% |
| Alphabet / GOOGL | 1,213.00 | 93 | 94.5 | 127.27 | 35 | 18.4 | -30 |
| Delta / DAL | 24.5 | 95 | 38.6 | 51 | 32 | 7.5 | -9 |
| Zoetix / ZTS | 73.8 | 93 | 161.74 | 212.4 | 31 | 29.3 | -19 |
| Alaska / ALK | 6.3 | 86 | 50.13 | 65.04 | 30 | 8.9 | -12 |
| Halliburton / HAL | 35.3 | 89 | 39.58 | 50.08 | 27 | 12.8 | 18 |
| Jacobs / J | 15.4 | 94 | 122.38 | 153.75 | 26 | 16.1 | 0 |
| Bio-Rad / BIO | 14.1 | 100 | 470.21 | 573.67 | 22 | 31.1 | -25 |
| Walt Disney / DIS | 197.4 | 83 | 107.98 | 131.1 | 21 | 24.1 | -28 |
| UnitedHealth / UNH | 461.8 | 84 | 493.3 | 593.75 | 20 | 19.8 | 3 |
| Targa / TRGP | 17.4 | 95 | 76.77 | 92.29 | 20 | 13 | 20 |
| Humana / HUM | 63.1 | 83 | 500.41 | 599.23 | 20 | 18 | 18 |
| Average | 260.2 | 91% | 27% | 21.8 | -8% |
Sources: Bloomberg, FactSet
For those stocks, 91% of the ratings are Buy. That’s strong support among analysts. The average Buy-rating ratio for stocks in the S&P 500 is about 58%.
The average upside for the dozen, based on Wall Street’s average price target, is about 27%.
It’s an attractive list. Someone could pass along the 12 ideas to a loved one. Buying a share of each would run almost $2,300.
That’s far more than the average person spends on Valentines Day. The National Retail Federation projects the average person will spend just over $190 on Valentines Day in 2023, up from about $175 in 2022.
In total, roughly $26 billion will be spent on Valentines Day. Candy, cards and flowers are the top gift categories. Those are solid options, but stocks will last much than chocolate.
Any stock screen, of course, is just a start of an investment process, a way to narrow the list of investible stocks to a manageable level. After the screen comes the work of learning about and valuing individual companies.
Write to Al Root at allen.root@dowjones.com
Credit: marketwatch.com