We recently published a list of Top 8 Stocks To Buy In 8 Different Sectors for the Next 3 Months. In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against other top stocks to buy in 8 different sectors for the next 3 months.
On November 25, the stock market saw a significant surge, with the Dow Jones Industrial Average jumping 440 points to a new record close of 44,736.57. The S&P 500 also reached a new high, gaining 0.3% to 5,987.37, while the Russell 2000 index, which focuses on small-cap stocks, hit an all-time high, increasing 1.47% to 2,442.03. The Nasdaq also rose, closing 0.27% higher at 19,054.84. CNBC reported that the market’s strong performance was attributed to President-elect Donald Trump’s nomination of Scott Bessent, the founder of Key Square Group, as Treasury secretary. Investors are optimistic that Bessent, a hedge fund manager, will be supportive of the equity market and help mitigate some of Trump’s protectionist policies, such as his stance on tariffs.
US Stocks Poised for Continued Growth
In an interview with CNBC on November 25, Brian Belski, Chief Investment Officer at BMO Capital Markets, expressed his bullish stance on the US stock market, stating that it remains the best asset in the world. He emphasized that despite the negativity and doubts surrounding the market, his team has consistently maintained a bullish stance since 2009.
Belski pointed out that many investors are too focused on valuation, which he believes is the world’s worst metric for predicting forward performance. Instead, he emphasizes the importance of earnings growth consistency, where the US is expected to outperform other regions.
He also highlighted the potential for catch-up growth in the financial sector, particularly in the areas of scale, asset managers, and discretionary spending. His team’s research suggests that earnings in the US financial sector are massively understated, and he expects a big catch-up trade on the earnings front.
Regarding valuation, Belski dismissed the idea of assigning a specific valuation metric, such as a P/E ratio, as simplistic. Instead, his team uses a macro P/E longer-term trend and a dividend discount model to evaluate the market. He believes the S&P 500 can reach 6,700, driven by US growth and earnings consistency.
Brian Belski has been bullish on small-cap stocks for well over a year and believes small-cap stocks are a good value play. He also implies that small-cap stocks are undervalued, citing various valuation metrics such as price-to-sales, and price-to-book, as well as operating metrics such as return on assets and return on equity. He suggests that these metrics indicate that small-cap stocks are a good value investment opportunity.
The US stock market continues to show resilience and strength, with the Dow Jones Industrial Average and S&P 500 reaching new highs. The nomination of Scott Bessent as Treasury secretary has injected a sense of optimism into the market. With the market’s strong performance and positive outlook, investors are well-positioned to take advantage of the current trend. With that in context, let’s take a look at the top 8 stocks to buy in 8 different sectors for the next 3 months.
Our Methodology
To compile our list of the top 8 stocks to buy in 8 different sectors for the next 3 months, we used Insider Monkey’s database to research stocks in 8 different sectors. We picked stocks from different sectors that were the most popular among elite money managers. The final list is ranked in ascending order of the number of hedge fund holders, as of Q3 2024.
Why do we care about what hedge funds do? 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).
Photo by Timothy Hales Bennett on Unsplash
Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Sector: Communication Services
Meta Platforms, Inc. (NASDAQ:META) is a leading social media and technology company, known for Facebook, Instagram, and WhatsApp. The company’s revenue is primarily driven by digital advertising. However, the company is investing heavily in the metaverse and is focusing on virtual and augmented reality.
On October 30, Meta Platforms, Inc. (NASDAQ:META) announced its financial results for the third quarter ending September 30. The company reported $40.59 billion in revenue, reflecting a 19% year-over-year increase. The company’s operating margin rose to 43%, compared to 40% in the same quarter last year. The focus on user engagement continues to yield significant results, with Family Daily Active People (DAP) across its Family of Apps (FoA) reaching 3.29 billion, marking a 5% year-over-year growth. This success is attributed to AI-driven personalization, which enhances the user experience and fosters greater interaction. Additionally, the average price per ad increased by 11% year-over-year.
The company’s Reality Labs division, dedicated to virtual and augmented reality, reported $270 million in revenue, accounting for a small portion of overall earnings. Although this segment continues to operate at a loss, CEO Mark Zuckerberg underscores its long-term potential to transform how people socialize, work, and transact within virtual environments. Meta Platforms, Inc. (NASDAQ:META) remains committed to significant investments in hardware, software, and content development to advance its vision for the metaverse.
Overall, META ranks 3rd on our list of top stocks to buy in 8 different sectors for the next 3 months. While we acknowledge the potential of META to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than META 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.
