Investors are always on the lookout for stocks that have the potential to weather economic storms and come out stronger on the other side. According to Citi, it is essential to focus on stocks with certain characteristics during market sell-offs. These criteria include being within the top 500 of the Russell 1000 by market capitalization, having an improved growth outlook, minimal changes in earnings estimates, and a buy rating from analysts.
Among the stocks that fit the criteria set by Citi, Apple stands out as a prominent choice. Despite recent declines in the broader tech sector and Berkshire Hathaway’s reduced stake in the company, many analysts still view Apple as a solid buying opportunity. Caterpillar, another stock on the list, has seen positive growth in 2024 following strong second-quarter results. However, analysts remain cautious about the stock’s future performance.
Home Depot, although included in the list, has faced challenges in 2024 due to higher interest rates impacting consumer demand for larger home improvement projects. With expectations of a potential rate cut on the horizon, Home Depot could see a turnaround in its fortunes as consumer mortgage refinancing increases. The list also includes Devon Energy and Zscaler, which are poised to benefit from the current market environment.
Identifying stocks that can withstand economic downturns requires a keen eye for specific criteria and a thorough understanding of market dynamics. While some stocks may face challenges in the short term, others present significant opportunities for growth and profitability. By carefully analyzing the potential of each stock based on the outlined criteria, investors can make informed decisions in a volatile market.