We recently published a list of the 7 Best Performing Long Term Stocks in 2024. In this article, we are going to take a look at where Grupo Financiero Galicia S.A. (NASDAQ:GGAL) stands against the other best performing long term stocks in 2024.
After the latest 50 basis point rate cut by the Federal Reserve, the market has been performing well. All of the major market indices have been in the green since then and experts are taking it as a good sign.
We discussed the Fed’s rate cut in our article about the best day trading stocks. Here is an excerpt from the article:
“…the Federal Open Market Committee (FOMC) chose to lower its policy interest rate by 50 basis points, a move intended to ease monetary policy. Powell explained that this action reflects growing confidence that labor market strength can be maintained, while inflation continues to decrease toward the Fed’s target. Powell emphasized the Fed’s flexibility in its approach and noted that future rate changes will depend on incoming data and the evolving economic landscape.
When questioned about the likelihood of future rate cuts, Powell said that each decision would be data-driven and made on a meeting-by-meeting basis. The Summary of Economic Projections (SEP) suggests a federal funds rate of 4.4% by the end of the year, with further reductions expected in the years ahead, which points to expectations of lower inflation and slightly higher unemployment.”
Understanding the Current Stock Market Optimism
Lead writer for Markets Live at The Wall Street Journal, Gunjan Banerji also shares the market’s optimistic sentiment as she explained in an interview with CNBC on September 25. Banerji discussed the growing optimism in the stock market despite ongoing bullish sentiment for the past few years. She highlighted how the recent rate cut by the Federal Reserve boosted market confidence, with the VIX (volatility index) dropping to its lowest levels and other indicators like high-yield bonds and options showing continued belief in the rally.
Dominic Chu of CNBC expressed concerns about potential market overconfidence, given the calmness amid geopolitical risks, the upcoming U.S. presidential election, and consumer spending challenges. Banerji acknowledged these risks but emphasized that much of the market’s optimism is tied to the Fed’s actions, with people reassured by the larger-than-expected rate cut.
Finally, Banerji pointed out a broadening of the market rally beyond the tech sector and mentioned the strong performances in sectors like energy and materials, and record highs from companies like Caterpillar and McDonald’s, which indicates a healthier, more diverse market rally.
Our Methodology
For this article, we used stock screeners to identify nearly 60 mid to mega-cap stocks with year-to-date share price returns of over 100%. Next, we narrowed our list to 7 stocks with the highest average analyst price target upside, as of September 24. We also added the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds. The stocks are sorted in ascending order of their upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is Grupo Financiero Galicia S.A. (NASDAQ:GGAL) the Best Performing Long Term Stock in 2024?
Grupo Financiero Galicia S.A. (NASDAQ:GGAL)
Average Analyst Price Target Upside: 61.79%
Stock Price Performance YTD: 161.56%
Number of Hedge Fund Holders: 15
Grupo Financiero Galicia S.A. (NASDAQ:GGAL) is a prominent financial services holding company in Argentina with over a century of experience in the industry. It has a diversified portfolio of subsidiaries, including Banco Galicia, Naranja X, Galicia Seguros, and Galicia Asset Management.
The company offers a wide range of financial products and services. The services range from savings accounts and credit facilities to investment options and insurance products. It is among our best performing long term stocks in 2024.
The stock has a consensus Buy rating among 5 analysts, and its average price target of $71.77 represents an upside of 61.79% from current levels, as of September 24. Additionally, the stock is up by 161.56% year-to-date.
The company has been actively pursuing growth through strategic acquisitions. Recently, Grupo Financiero Galicia announced a significant acquisition that has gained attention. The Argentine Central Bank approved the company’s plan to acquire HSBC Argentina Holdings S.A. and its affiliates.
The acquisition is set to reshape the banking landscape in Argentina and is expected to improve the company’s market position. The acquisition will be finalized once all regulatory approvals and purchase agreement terms are met.
In 2023, Grupo Financiero’s (NASDAQ:GGAL) insurance subsidiary, Galicia Seguros, acquired Grupo Sura’s insurance business in Argentina for approximately $19 million. The acquisition added around 800,000 customers and expanded the company’s operational capacity with 13 branches and 500 employees.
Such moves align with Galicia Seguros’ goal of becoming a leading insurance provider in the region. Previous strategic acquisitions, such as the purchase of 34 Grados Sur Securities SA for around $441,230, further show the company’s proactive approach to growth.
On September 3, Citi analyst Brian Flores upgraded the stock to Buy from Neutral with a $54 price target. The change is driven by positive economic indicators and an expectation for sustained credit demand as the economy stabilizes. Flores highlighted the company’s potential for higher return on equity in 2024 and 2025, which suggests a promising financial trajectory.
Similarly, JPMorgan has taken a more bullish stance on the stock. On August 30, JPMorgan double upgraded Grupo Financiero (NASDAQ:GGAL) to Overweight from Underweight with a $54 price target. After years of cautious assessments of Argentine banks, the firm now recognizes macro and micro improvements that could positively impact the company.
While some uncertainties remain, JPMorgan believes that the bank is well-positioned to capitalize on a resurgence in loan demand, marking it as a preferred choice for investors looking to engage with the Argentine financial sector.
Overall, GGAL ranks 2nd on our list of the best performing long-term stocks in 2024. While we acknowledge the potential of GGAL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GGAL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
