We recently published a list of Top 8 Stocks To Buy In 8 Different Sectors for the Next 3 Months. In this article, we are going to take a look at where GE Aerospace (NYSE:GE) stands against other top stocks to buy in 8 different sectors for the next 3 months.
On November 25, the stock market saw a significant surge, with the Dow Jones Industrial Average jumping 440 points to a new record close of 44,736.57. The S&P 500 also reached a new high, gaining 0.3% to 5,987.37, while the Russell 2000 index, which focuses on small-cap stocks, hit an all-time high, increasing 1.47% to 2,442.03. The Nasdaq also rose, closing 0.27% higher at 19,054.84. CNBC reported that the market’s strong performance was attributed to President-elect Donald Trump’s nomination of Scott Bessent, the founder of Key Square Group, as Treasury secretary. Investors are optimistic that Bessent, a hedge fund manager, will be supportive of the equity market and help mitigate some of Trump’s protectionist policies, such as his stance on tariffs.
US Stocks Poised for Continued Growth
In an interview with CNBC on November 25, Brian Belski, Chief Investment Officer at BMO Capital Markets, expressed his bullish stance on the US stock market, stating that it remains the best asset in the world. He emphasized that despite the negativity and doubts surrounding the market, his team has consistently maintained a bullish stance since 2009.
Belski pointed out that many investors are too focused on valuation, which he believes is the world’s worst metric for predicting forward performance. Instead, he emphasizes the importance of earnings growth consistency, where the US is expected to outperform other regions.
He also highlighted the potential for catch-up growth in the financial sector, particularly in the areas of scale, asset managers, and discretionary spending. His team’s research suggests that earnings in the US financial sector are massively understated, and he expects a big catch-up trade on the earnings front.
Regarding valuation, Belski dismissed the idea of assigning a specific valuation metric, such as a P/E ratio, as simplistic. Instead, his team uses a macro P/E longer-term trend and a dividend discount model to evaluate the market. He believes the S&P 500 can reach 6,700, driven by US growth and earnings consistency.
Brian Belski has been bullish on small-cap stocks for well over a year and believes small-cap stocks are a good value play. He also implies that small-cap stocks are undervalued, citing various valuation metrics such as price-to-sales, and price-to-book, as well as operating metrics such as return on assets and return on equity. He suggests that these metrics indicate that small-cap stocks are a good value investment opportunity.
The US stock market continues to show resilience and strength, with the Dow Jones Industrial Average and S&P 500 reaching new highs. The nomination of Scott Bessent as Treasury secretary has injected a sense of optimism into the market. With the market’s strong performance and positive outlook, investors are well-positioned to take advantage of the current trend. With that in context, let’s take a look at the top 8 stocks to buy in 8 different sectors for the next 3 months.
Our Methodology
To compile our list of the top 8 stocks to buy in 8 different sectors for the next 3 months, we used Insider Monkey’s database to research stocks in 8 different sectors. We picked stocks from different sectors that were the most popular among elite money managers. The final list is ranked in ascending order of the number of hedge fund holders, as of Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A technician in a power station monitoring the flow of energy generated by a gas turbine.
GE Aerospace (NYSE:GE)
Number of Hedge Fund Holders: 95
Sector: Industrial
GE Aerospace (NYSE:GE), formerly General Electric, focuses on the design, manufacture, and service of jet engines and other aerospace technologies. The company’s customers include commercial airlines, defense contractors, and governments. GE Aerospace (NYSE:GE) benefits from a resurgence in air travel and increased defense spending globally.
On October 22, GE Aerospace (NYSE:GE) announced results for the third quarter ending September 30. The company’s revenue increased 6% year-over-year to $9.8 billion, with operating margins rising by 1,560 bps to 20.3%. GE Aerospace’s (NYSE:GE) total orders increased 28% to $12.6 billion, as a result, the company revised its forecast for earnings and cash guidance for the year.
On the sales front, GE Aerospace (NYSE:GE) is experiencing significant momentum. The company has secured widebody commitments from EVA Air and Qatar Airways, which will drive growth and increase its market share. The company has also announced a ten-year service agreement with Emirates, focusing on the electrical load management system for its Boeing 777 fleet.
GE Aerospace’s (NYSE:GE) defense business is also thriving, with a major commitment from the Polish Ministry of National Defense for over 200 T700 engines to power Boeing Apache Guardian helicopters. Furthermore, the company has been selected to overhaul and upgrade GEnx-2B engines for the United States Air Force, underscoring its expertise and reputation in the defense sector.
Overall, GE ranks 6th on our list of top stocks to buy in 8 different sectors for the next 3 months. While we acknowledge the potential of GE to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock
Disclosure: None. This article is originally published at Insider Monkey.