This is the conclusion of today's Morning Brief, which you can read Log in Delivered to your inbox every morning, along with:
Let me tell you something you probably already know: I have no idea how the stock market will perform in April.
But I can say two things with confidence.
First, this has been another amazing year for investors large and small (unless you invest in small caps, UPS stocks, or short stocks for a living).
The S&P 500 could rise 10% or more in consecutive quarters for the first time since Q4 2011 and Q1 2012, according to stock numbers expert Ryan Detrick of Carson Group.
From 1950 to 2023, April is, on average, the second-best performing month of a calendar year, up about 1.5%, according to Detrick's data.
Finally, the tempting two – Nvidia (NVDA) and Meta (META) – are up an average of 66% year to date on the AI mania.
Great stuff here.
I can also say with confidence that you don't need to bother picking the next great AI stock to make money in this hot market. In fact, that's exactly what you DON'T want to do – picking up scraps from someone else's portfolio.
Would you like to achieve more sustainable success with stocks? Look for companies with catalysts.
I can give you two new examples to get you on the right track.
One is Keurig Dr. Pepper (KDP), the maker of Keurig pods, brewers and Snapple iced tea. I hadn't checked in with veteran food CEO Bob Gamgort in a while, but I recently caught up with him and his hand-picked successor, Tim Cofer, on Yahoo Finance Live (watch it here).
I discovered a few potential catalysts for stock movement:
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Keurig is poised to launch several innovations next year, including an iced coffee maker that capitalizes on the shift to iced drinks and sustainable coffee pods that could help appease critics of pod waste. It's also likely that the coffee business will bottom out in the middle of the year after a few challenging quarters.
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The company is entering into increasingly lucrative new licensing agreements, for example for the energy drink C4 and the Gatorade competitor Electrolit.
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Gamgort and Cofer recently purchased shares in the company, a sign of confidence in their strategies and prospects.
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Major institutional investor JAB has finally stopped selling Keurig Dr Pepper shares.
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The company would like to increase share buybacks.
The story goes on
Assuming a dividend yield of 2.8%, its catalysts make it worth doing more homework on KDP.
Another company with catalysts is trading platform Robinhood (HOOD), which has become a financial services super app.
I've spent some time with Robinhood co-founder and CEO Vlad Tenev over the past year and have been impressed with the company's growth. It's as if everything Tenev has planned in terms of new products for 2022 is now coming to fruition and lighting a fire under the sales and profit numbers.
A mature Robinhood, if you will.
Within the last 12 months, Robinhood launched 24-hour trading and recently launched its first credit card and a revamped trading experience.
Tenev told me in the video above that initial demand for the credit card has increased tremendously and that it could become a significant business in the long term.
I expect Tenev to remain aggressive on the new product front for the remainder of 2024 and well into 2025 – think more retirement-focused services as the company aims to to wrest market share from old financial institutions.
In other words, Robinhood has catalysts.
And this goes for many other companies too – go out and find them this weekend!
Brian Sozzi is Editor-in-Chief of Yahoo Finance. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].
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