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Chipmaker Nvidia has been in the spotlight over the past year, especially after its stock price soared an astronomical 240% in 2023 on the back of buzz around artificial intelligence. Its popularity shows no signs of slowing down. The stock is up about 19% so far this month and 90% year-to-date. Still, some investors remain cautious, saying the stock is too expensive. “Some might say it’s not that expensive because its earnings have gone up so dramatically…but when you see the stock price start to triple in a year and a half and become one of the top S&P 500 stocks, you should be careful. ” said David Dietze, managing principal and senior portfolio strategist at Peapack Private Wealth Management, which manages and manages more than $10 billion in assets. “In my experience, when everyone is focused on how great they are, it’s better to stay away from these stocks and look for stocks with more reasonable valuations.” Instead, this veteran asset Managers are currently looking for stocks in growth sectors that they believe offer “reasonable value.” He said he was focusing on the pharmaceutical, real estate, energy and financial sectors, and listed four stocks that stood out. Pfizer, the pharmaceutical company best known for its coronavirus vaccine, is betting on cancer drugs following its $43 billion acquisition of Seagen Inc. last year. “We’re very passionate about this. Sagen is an expert in oncology and has a huge market, so there’s a lot of potential for Pfizer to grow as the business unit expands,” Dietze said. he told CNBC Pro on March 12. It is a “perfect example” of a company with “strong research and development capabilities, excellent marketing capabilities, and strong sales capabilities not only in the United States but worldwide.” His optimism comes despite an eventful 2023. The company predicted lower-than-expected profits and sales in 2024 as demand for its coronavirus vaccine declined and its twice-daily weight-loss drug failed in clinical trials. The company subsequently announced a $4 billion cost-cutting program. Pfizer stock is down about 32% over the past 12 months and 5% year-to-date. But Dietze also emphasized that the company’s dividend is relatively high and its forward price-earnings ratio (a company’s stock price divided by its expected earnings per share) is relatively low at about 12 times. This is because Wall Street values stock prices higher. “And you end up buying at a low price when it could still have a great future,” he said. Analysts’ average price target is $31.37, giving the stock a roughly 14% chance of upside, according to FactSet data. Real Estate Income In the real estate field, Mr. Dietze likes real estate income. The REIT said its portfolio includes more than 13,000 commercial properties with an occupancy rate of 98.8%. “It’s a defensive stock, so it may not be as volatile as a non-dividend-paying stock,” he said. “Stocks and REIT groups are unpopular as interest rates are rising. Still, interest rates are falling and many of the concerns for commercial real estate due to more people working from home may have been priced in. Therefore, this could be a good choice.” He also noted that Realty Income has a triple-net lease structure, where the tenant pays all expenses and pays dividends monthly, unlike many REITs that pay quarterly. I pointed out that it means REIT stock prices have fallen about 14.5% over the past 12 months. Eight analysts have rated the REIT with a buy rating and 10 have given it a hold rating, according to FactSet data. Analysts’ average price target is $61.18, giving the stock upside potential of about 17%. SLB Oil services giant SLB, formerly known as Schlumberger, was also one of Dietze’s candidates. The company provides a wide range of services to the oil industry, including well testing, drilling, and data processing. “They are at the forefront of leveraging new technologies to support companies that own the energy sector,” he said. “They don’t own the property, but they provide the technical know-how to extract it. And they have a long track record of being the largest oilfield service provider.” [provider] Dietze emphasized that 20% of the company’s revenue comes from new technology capabilities. He also said that with a forward price/earnings ratio of around 15 times, SLB looks much cheaper than it used to be. It is a very profitable business as it is a low capital intensive business. “Return on invested capital is expected to remain strong over the next two years,” he added. Over the past 12 months, SLB stock has increased about 21%. Of the 33 analysts covering the stock, 31 give it a rating, according to FactSet data. Two companies are rated “buy” or “overweight” and two are rated “hold.” The average price target is $68.12, with about 26% upside potential. “Due to their size and commercial relationships, they have significant cost advantages and high switching costs if the borrower goes elsewhere. They have one of the highest percentages of interest-free deposits in Canada,” he said. “It is,” he said. Things haven’t always been rosy for Comerica, a bank that also has retail banking and wealth management divisions. The S&P 500 Index suffered a decline last October when its market capitalization fell below the required $14.5 billion. Although it remains included in the index, its market capitalization now stands at approximately $6.84 billion. Comerica stock is up about 28% over the past 12 months, but is down 7.5% since the beginning of the year. Analysts’ average price target is $59.45, giving the stock about 15% upside potential, according to FactSet data.
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