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Every week, I will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how they impact your life.

This week, I am going solo to start the year. It’s time to talk about how to be a better stock investor in 2024. The new year is an opportunity to start fresh.
 

Lessons from Munger and Buffett

Who better to turn to for some lessons than two of the top investors of all time, Charlie Munger and Warren Buffett?

Munger wasn’t just Buffett’s right-hand man at Berkshire Hathaway, he was also an advisor to the Daily Journal on their stock portfolio. According to Business Insider, he grew their portfolio from $20.4 million in Feb 2009 to $303 million as of Sep 30, 2023.

And he did it by owning fewer than 8 companies in the portfolio.

Similarly, while Berkshire Hathaway has 52 companies in the equity portfolio, just 5 make up nearly 80% of it. It’s a highly concentrated portfolio. But that will work when your largest position, Apple, is up 392% over the last 5 years.

Is concentration the key to outsized success in stock investing?
 

New Year, New Stocks

When the calendar turns, it’s always a good time to check in with your stock portfolio. Are the companies performing as you’d like them to? Has management changed? What do the earnings estimates look like for 2024?

Additionally, it’s also a good time to make a watch list with some new stocks.

On Jan 2, 2024, there were 227 Zacks Rank #1 (Strong Buy) stocks. These are the top-ranked stocks out of the over 4,000 stocks that Zacks ranks daily. It’s an elite group.

Tracey pulled out 5 of those Strong Buy stocks to start the year.
 

5 Strong Buy Stocks for Your Watch List

1. CBOE Global Markets (CBOE - Free Report)

CBOE is a derivatives and securities exchange. This Zacks Rank #1 (Strong Buy) is expected to grow earnings another 6% in 2024 after seeing 9.5% growth in 2023. Analysts are bullish with 6 estimates higher for 2024 in the last 60 days, with 3 being revised higher in the last month.

Shares of CBOE are near 5-year highs, up 81.2% during that period. It is trading with a forward P/E of 22. CBOE also pays a dividend, currently yielding 1.2%.

Should CBOE be on your watch list?

2. Adidas AG (ADDYY - Free Report)

Adidas is a global athletic and leisure brand with products including shoes, apparel, and accessories. 2 earnings estimates are higher in the last 60 days for 2024. Earnings for Adidas are expected to jump 1,462% in 2024 to $2.18 from a loss of $0.16 in 2023.

Shares of Adidas are up 47% over the last year but remain depressed over the last five years, with a decline of 6.6% during that time period. Adidas isn’t cheap. It trades with a forward P/E of 46.7. Investors will get a dividend, currently yielding 0.4%.

Should Adidas be on your watch list?

3. e.l.f. Beauty (ELF - Free Report)

e.l.f. Beauty is a popular low-cost beauty brand selling makeup and skincare products. It has been beating on the Zacks Consensus Estimate every quarter and also raising earnings estimates. Earnings are expected to rise 62% in Fiscal 2024 and another 17.4% in Fiscal 2025.

Shares of e.l.f. Beauty has been on a tear, up 161% in the last year, and are trading at new highs. It’s not cheap, with a forward P/E of 53.6.

Should e.l.f. Beauty be on your watch list?

4. Palantir Technologies Inc. (PLTR - Free Report)

Palantir is a large cap software company. Analysts are bullish about this Zacks Rank #1 (Strong Buy.) 5 estimates are higher for 2023 and 2024 in the last 60 days. Palantir’s earnings are expected to jump 316.7% in 2023 and another 18.5% in 2024.

Shares of Palantir rose 167.5% in the last year. It’s not cheap, with a forward P/E of 58.5.

Should Palantir be on your watch list?

5. Shopify Inc. (SHOP - Free Report)

Shopify helps people start, run, and grow a business. It was a big winner in the early years of the pandemic, but shares sold off in 2022. However, the analysts are getting bullish. 2 estimates have been revised higher for 2023 and 3 for 2024 in the last 60 days, with 1 estimate also being revised in the last month for both years as well.

Earnings for Shopify are expected to rise 1650% in 2023 and another 48% in 2024. Shares of Shopify are up 124.4% over the last year. It’s not cheap. Shopify trades with a forward P/E of 75.1.

Should Shopify be on your watch list?

What Else Do You Need to Know About Stock Investing in 2024?    

Tune into this week’s podcast to find out.

Video Length: 00:35:08

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