Hello, Reader.
In 1960, “The Magnificent Seven” was the title of a newly released Western-themed film. Eventually, this film became known as one of the greatest Westerns ever made.
The movie hosted an array of current and future Hollywood superstars, like Yul Brenner, Steve McQueen, and Charles Bronson.
Today, though, Wall Street knows “The Magnificent Seven” as a completely different cast of characters, made up an all-star list of stocks. This elite group – as I’m sure you now know – includes Nvidia, Meta, Microsoft, Alphabet, Apple, Amazon, and Tesla.
While the other 493 stocks in the S&P 500 may seem “ordinary” by comparison, I think they are anything but. In fact, a few show the promise of star quality themselves.
So, here is my version of the Magnificent Seven stocks for this year…
My Magnificent List
1. Corning Inc. (GLW)
For more than 170 years, the Corning name has been synonymous with best-of-breed glass products. It has continuously innovated and set the industry standard for excellence. Today, the company operates six different business segments – each of which is beginning to benefit from powerful tailwinds.
Looking further down the road, I expect the coming decade to reward Corning with a level of profitability that few investors anticipate today.
2. Intel Corp. (INTC)
Intel has committed to a multiyear, multibillion-dollar plan to build new semiconductor fabrication facilities (known as fabs) in the U.S.
Already, Intel has broken ground on two new factories in Arizona. The $20 billion plants – dubbed Fab 52 and Fab 62 – will bring the total number of Intel factories at its campus in Chandler, Arizona, to six. Meanwhile, the chipmaking giant is spending an additional $20 billion to establish a “Silicon Heartland” by building a massive new fab in Licking County, Ohio.
3. Alcoa Corp. (AA)
Alcoa is the largest U.S.-based aluminum producer. Now, aluminum does not receive the same high-profile attention that other battery metals do, but the solar industry is a prodigious consumer of aluminum, and so is the EV industry.
Despite the strong supply-demand dynamics in the aluminum market, the Alcoa share price is reflecting all doom and no boom. The stock changes hands for less than four times earnings. From this low valuation, Alcoa offers substantial upside potential – both over the next few months and over the next few years.
4. The Mosaic Co. (MOS)
I am bullish on the fertilizer industry in general and Mosaic in particular, which is one of the largest U.S.-based fertilizer companies. I expect the company to capitalize on resurgent demand growth for potash and phosphate fertilizer.
Bottom line: The outlook for fertilizer demand, both near-term and long-term, supports a bullish outlook for fertilizer pricing… and bodes well for companies like Mosaic.
5. GE HealthCare Technologies Inc. (GEHC)
GE HealthCare is interesting – both for what it is already and what it could become.
As one of the oldest “new” healthcare stocks in the market, GE Healthcare is a blue-chip company with a formidable presence in the medical imaging industry. The company is also a leader in the field of AI-enabled medical devices.
From an investment perspective, therefore, GE HealthCare is a two-part story. It is a solid, steadily growing medical imaging company that also includes considerable fast-growth potential from its AI product line and investments.
6. PayPal Holdings Inc. (PYPL)
PayPal is a titan of the digital payments industry.
Branded Checkout is the foundation of PayPal’s business because of its high-margin fee structure. This business segment accounts for about one-third of the Total Payment Volumes (TPVs) the company processes, but it produces more than half of its total revenues.
In addition to fortifying its leadership position in branded checkout, PayPal is expanding in the rapidly growing Unbranded Checkout segment.
CEO Schulman says that growing the unbranded checkout business has become a “strategic imperative” for PayPal – not just because it adds incremental revenue but also because it broadens and deepens customer relationships.
7. International Business Machines Corp. (IBM)
Over the past few years, IBM has been reinventing itself as a hybrid cloud and artificial intelligence company. To accelerate this transformation, the company has been pursuing an out-with-the-old-in-with-the-new growth strategy.
Since 2019, IBM has divested 17 legacy businesses, while also making more than 30 acquisitions. As a result of this frenetic deal-making, CEO Arvind Krishna explains, IBM has created “a hybrid cloud platform-centric business model that has a compelling value proposition around an economic multiplier of software, consulting, and infrastructure.”
The strategy appears to be working, as IBM’s high-margin software and consulting solutions now account for a high percentage of company revenues.
(The list above is a condensed version of my Top 7 Stocks for 2024 report. For a full analysis on each of these stocks, you can go here.)
Even More Magnificence
These seven stocks could fortify your portfolio for one important reason: They each capitalize on a powerful megatrend I’ve followed – and will continue to follow – for months and years to come.
But I’m not beholden to these trends alone. In fact, an entirely new megatrend could be developing at this very moment: reviving lithium demand.
Here is the U.S., the crater of an ancient volcano could play a major role in satisfying that demand. It holds the single largest deposit of lithium anywhere on Earth.
And just one company is poised to exploit the deposit and could be only months away from full scale-production.
Those who understand the importance of this discovery have a tremendous – dare I say, magnificent –opening to capitalize on soaring demand for a resource that’s absolutely critical for the modern economy… and that is in very short supply here in the U.S.
Regards,
Eric Fry
