As the new trading month kicks off, HSBC advises investors to diversify their portfolios in the fourth quarter by targeting stocks offering more reasonable valuations. The S&P 500 concluded September with its fifth straight month of gains, adding to a more than 20% rise in 2024 and setting another record close. Similarly, the Dow Jones Industrial Average and the tech-heavy Nasdaq Composite ended the month positively. Nicole Inui, HSBC’s head of equity strategy for the Americas, noted that the significant contributions to these gains come from dominant “big” companies across tech, retail, finance, and pharma sectors. Despite these successes, she pointed out potential opportunities in less pricy stocks, excluding small caps, as the Federal Reserve recently reduced interest rates by half a point with more cuts anticipated.
Inui suggested focusing on companies with less demanding valuations. Among the names to watch, automaker General Motors and pharmaceutical giant Pfizer stand out. GM’s shares have surged over 27% this year, driven by a remarkable 60% increase in electric vehicle sales last quarter. With a 9.5% share of the domestic EV market, HSBC and 16 out of 29 analysts give GM a strong buy or buy rating. The average price target rests at $54.35, indicating a potential 19% upside.
Pfizer’s stock has dipped nearly 1% this year but saw slight improvement recently. Although analyst opinions are mixed, with 14 recommending a hold, the price target suggests a 16% upside. Other noteworthy mentions include Goldman Sachs and Delta Air Lines, which have seen their shares rise by over 28% and 22.5%, respectively, in 2024. Investors are thus encouraged to explore these opportunities against a backdrop of resilient growth predictions and a moderately lower interest rate environment.
Original Story https://www.cnbc.com/2024/10/05/cheap-stocks-to-buy-in-the-fourth-quarter-according-to-hsbc.html
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