The artificial intelligence frenzy helped send the S&P 500 to record highs about 30 times in 2024, led by the tech and communication sectors. The percentage of S&P 500 companies reporting positive earnings surprises rose about their 10-year averages in the year's first quarter, while analysts project earnings to rise +11% in CY 2024.
With the boost from AI aiding some of the Quant Team’s Top 10 Stocks for 2024, up an average of +55% YTD, we’ve put together a top 10 list for the second half of the year, including stocks with high momentum, top-notch earnings growth potential, and solid investment fundamentals across a wide range of sectors and industries.
Best stocks for the second half of 2024
The Tech sector (XLK) has been the highest performer in the first half of 2024, followed by Communication (XLC) stocks. Another major headline in 2024 has been the surge in precious and industrial metals, with gold and copper reaching all-time records. With the Quant Team’s portfolio of Top 10 Stocks for 2024 up 55% YTD to outperform the S&P 500, here are ten ‘Strong Buy’ quantitative-rated picks for the second half of 2024.
1. SilverCrest Metals Inc. (SILV)
Market Capitalization: $1.19B
Quant Rating: Strong Buy
Quant Sector Ranking (as of 6/18/24): 7 out of 282
Quant Industry Ranking (as of 6/18/24): 1 out of 10
SilverCrest Metals Inc. is a small-cap silver and gold miner headquartered in Canada and operates in Mexico. SILV is #1 among quant-rated stocks in the Precious Metals industry and #7 in the Materials sector. The miner, benefitting from the silver price surge, is up ~+37% YTD.
SILV’s Las Chispas Mine went from discovery to production in seven years and produces approximately 10 million ounces ((Moz)) of AgEq annually, with All-In Sustaining Cost (AISC) in the lowest quartertile vs. silver peers. SILV’s A- Profitability Grade is driven by 70% gross margin vs. the sector’s 28%, EBITDA margin of 62%, and net income margin of almost 50%. SILV exhibits a strong return on investment and effective deployment of capital and assets with a trailing ROE of 33%, ROTC of 21%, and ROA of 26%.
SILV is investing a high percentage of revenue in capital investment, with a CAPEX/sales ratio of 23% vs. the sector’s 7%. SILV possesses a 77% forward revenue growth rate, forward EBITDA growth of 124%, and EPS FWD of 27% vs. the sector’s 3%.
SILV’s trailing PEG ratio of 0.11 is at an 80% discount to the sector median of 0.55. SILV Q124 EPS of $0.23 beat by $0.11, and the company has had 6 upward Wall Street analysts’ revisions in the last 90 days. Although SILV is a small-cap miner and metal stocks tend to be highly cyclical and subject to greater volatility in response to macroeconomic changes, SilverCrest possesses a pristine balance sheet, highlighted by a mere $277K in total debt, net cash of $70.81M, and a whopping 17.25 Altman Z score.
2. Super Micro Computer (SMCI)
Market Capitalization: $51.96B
Quant Rating: Strong Buy
Quant Sector Ranking (as of 6/18/24): 1 out of 557
Quant Industry Ranking (as of 6/18/24): 1 out of 28
Super Micro Computer is a high-performance server and storage solution provider to tech giants like NVIDIA, up ~220% YTD on demand for AI. SMCI has been up 1,000% since its selection as SA Quant’s #1 stock for 2023; it is #1 among quant-rated Technology Hardware and Storage stocks and #1 in the tech sector, driven by excellent Momentum, Growth, and EPS Revision factor grades.
SMCI beat non-GAAP EPS targets for four of the last five quarters. Q324 EPS of $6.65 beat by $1.08 and revenue of $3.85B (+200% YoY) missed by $46.94M. Midpoint of SMCI guidance for Q224 revenue is $5.3B and $14.9B for the fiscal year. According to consensus estimates, SMCI FY24 EPS is projected to grow +101% to $23.78 and +40% in FY25 to $33.73. Revenue is expected to rise nearly 110% in FY24 to $14.93B and another 58% in FY25 to $23.64B. SMCI has had 13 earnings up revisions in the last 90 days, and the stock continues to crush tech rivals in nearly every key underlying growth metric for an ‘A+’ Growth Grade.
SMCI TTM revenue growth is nearly +80% YoY, more than 2,300% above the sector median of ~+3%. EBIT growth YOY is +64% vs. -2% for the sector and EPS almost 70% vs. the sector’s +1.42%. Revenue FWD growth rate is 65%, EBIT FWD +88%, and EPS FWD 81%. EPS FWD long-term growth rate (3-5Y CAGR), a highly weighted quant metric, is an astounding 46%, more than 230% above the sector.
SMCI has a ‘D’ in Profitability, driven by negative cash flow, but soundly outperforms the sector in ROE (30%), ROTC (16%), and ROA (11%), exhibiting strong return on investment and effective deployment of capital. SMCI’s EBIT margin of 9% and Net income margin of 8% are well above the sector medians. Cash per share TTM of $36.13 beats the sector by 1,700% and asset turnover ratio of 1.96x by more than 200%. SMCI has a ‘C-’ Valuation grade. Still, the all-important forward PEG ratio, which demonstrates stock price and EPS, is more than a 60% discount to the sector, indicating the stock is trading at a relative discount, according to the quant ratings.
3. GigaCloud Technology, Inc. (GCT)
Market Capitalization: $1.23B
Quant Rating: Strong Buy
Quant Sector Ranking (as of 6/18/24): 2 out of 512
Quant Industry Ranking (as of 6/18/24): 1 out of 5
GigaCloud is up ~290% in the past year and over 60% since making the SA’s Quant Team’s list of Top 10 Stocks for 2024. Despite some of the risks associated with recent short report allegations that GigaCloud has refuted as meritless claims, the stock’s Quant rating of 4.99 remains highly attractive. Hence, the Quant Team reiterates GigaCloud as a ‘Strong Buy’ rated stock. GigaCloud is a top quant-rated Consumer Discretionary stock, ranking #2 in its sector. The company operates a B2B online marketplace and offers logistics services focusing on big, bulky, non-standard products like furniture, home appliances, and fitness equipment.
The fast-growing B2B e-commerce stock showcases A+ grades in Growth, and Momentum, an 'A' in EPS Revisions and a ‘B-’ in Profitability and Valuation. GCT Q124 EPS of $0.84 beat by $0.33, and revenue of $251M (+96% YoY) beat by $8.08M. Based on consensus estimates, GigaCloud’s FY24 EPS is projected to grow more than 30%. GCT has an ‘A+’ Growth Grade, driven by EBIT rising an astounding 186.98% YoY and forward EBIT growth of +77.28%. Forward EPS growth is +85.66%, and forward revenue is +40%. GCT has delivered strong return on investment with ROE of nearly 40% and ROTC of 14%. GTC EBIT margin TTM of 15% is more than 100% above the sector. GCT is trading at 9.86x earnings, about a 40% discount to the sector’s 17.01x. GCT has a trailing PEG ratio of 0.07 vs. the sector’s 0.52.
4. Abercrombie & Fitch Co. (ANF)
Market Capitalization: $9.50B
Quant Rating: Strong Buy
Quant Sector Ranking (as of 6/18/24): 1 out of 512
Quant Industry Ranking (as of 6/18/24): 1 out of 40
Abercrombie & Fitch is the #1 quant-rated stock in the Apparel Retail industry, up 110% YTD, over 400% in the past 12 months, and another member of SA Quant’s top 2024 list. Trailing Revenue is up 20% YoY, EBIT +288%, and EPS ~+1,000%, while ANF forward EPS growth rate is +235%, for an A+ in Growth.
ANF's trailing gross profit margin is astounding at 64% vs. the sector’s 36%, and its net income margin is 9% vs. the sector's 4%. It is crushing the sector in LFCF, ROE, ROTC, and ROA. Cash per share of $16.91 is more than 580% above the sector’s $2.47. ANF has 7 upward analysts’ revisions in the last three months, and FY25 EPS is expected to increase by over 50%. The stock has rallied incredibly over the last year, as showcased in ANF’s A+ Momentum Grade, delivering quarterly price-performance that handily outperforms its sector median peers. Although ANF has a Valuation Grade of D+, its trailing PEG ratio of 0.02 is an A+, indicating a discount of more than 95% vs. the sector.
5. PDD Holdings, Inc. (PDD)
Market Capitalization: $205.95B
Quant Rating: Strong Buy
Quant Sector Ranking (as of 6/18/24): 6 out of 512
Quant Industry Ranking (as of 6/18/24): 1 out of 29
PDD owns the Temu online marketplace and operates the Chinese e-commerce platform Pinduoduo, which is focused on agricultural produce and various product categories, including food and beverage, apparel, electronic appliances, and household goods. PDD is #1 among quant-rated stocks in Broadline Retail, up nearly 100% in the past year.
PDD’s Quant Rating is driven by ‘As’ in growth, profitability, momentum, and revisions. PDD possesses a 62% trailing gross profit margin, trailing Net Income and EBIT margin of 26%, for an overall ‘A+’ Profitability Grade. PDD’s LFCF margin is a mind- boggling 32%, 479% above the sector. PDD also crushes sector rivals in ROE (46%), ROTC (26%), and ROA (21%).
PDD revenue TTM rose by an astounding 105% YoY, EBIT +121%, and EPS +113%. EPS long-term growth FWD is at 36%. EPS is expected to increase by 82% in FY24 and revenue by 65%. PDD’s Q124 EPS of $2.86 beat by $1.43, and revenue of $11.99B (+124.98% YoY) beat by $1.41B. PDD exceeded consensus non-GAAP EPS expectations for the seventh time in eight quarters. PDD has 29 up revisions in the last 90 days and total cash of $33.53B on the balance sheet vs. total debt of $1.31B. PDD has a ‘C+’ quant valuation factor grade, although forward PEG ratio is an ‘A+’ and more than a 75% discount to the sector.
6. Trip.com Group Limited (TCOM)
Market Capitalization: $32.71B
Quant Rating: Strong Buy
Quant Sector Ranking (as of 6/18/24): 8 out of 514
Quant Industry Ranking (as of 6/18/24): 1 out of 37
Trip.com, a provider of travel services in China and internationally, is the #1 quant-rated Hotel, Resorts, and Cruise Line industry stocks. Trip.com is up 40% YTD and +44% in the past 12 months. TCOM showcases ‘A’ grades in Momentum, Growth, Profitability, and EPS Revisions. TCOM Q124 EPS of $0.83 beat by $0.26 and revenue of $1.65B (+27.54% YoY) beat by $28.46M. TCOM beat non-GAAP earnings seven out of the last 8 quarters, and has 19 up revisions in the last 3 months. TCOM has an excellent growth record and strong potential, with EBIT Growth FWD at 458%, EPS FWD 128%, and EPS long-term growth FWD at 60%. TCOM showcases gross profit margin TTM at a whopping 81% and crushes the sector in EBIT margin (26%), net income (22%), and LFCF (29%). TCOM has an attractive forward PEG ratio of 0.27, which is an 81% discount to the sector.
7. SPX Technologies, Inc. (SPXC)
Market Capitalization: $6.39B
Quant Rating: Strong Buy
Quant Sector Ranking (as of 6/18/24): 18 out of 627
Quant Industry Ranking (as of 6/18/24): 3 out of 72
SPX Technologies Inc. supplies infrastructure equipment to worldwide HVAC and detection and measurement markets, up 65% in the past year. SPXC has an ‘A+’ Growth Grade with EBITDA up over 40% YoY, EPS +233%, and levered FCF an amazing +295%. EPS long-term growth FWD is at 16%. SPXC showcases a trailing levered FCF margin of 9.3%, ROE of 13%, and EBIT margin of 13%. Q124 EPS of $1.25 beat by $0.22 and revenue of $465M (+16.36% YoY) beat by $20.67M. FY24 EPS is projected to grow 23% and revenue 14%.
Although the company’s valuation is a bit stretched based upon its D Valuation Grade, SPXC showcases a trailing PEG ratio of 0.18 vs. 0.97 for the sector, an 80% discount.
8. Hercules Capital, Inc. (HTGC)
Market Capitalization: $3.13B
Quant Rating: Strong Buy
Quant Sector Ranking (as of 6/18/24): 39 out of 681
Quant Industry Ranking (as of 6/18/24): 5 out of 92
Hercules Capital, Inc. (HTGC) is a business development company (BDC), up 36% in the past year, specializing in providing financing to high-growth venture capital-backed companies in various technology, life sciences, and sustainable and renewable industries. The company rules out exposure to direct oil and gas, metals, minerals, crypto, and cannabis industries, given the potential volatility, and Hercules’ debt instruments tend to have short-term amortizing maturities spanning 36-48 months. Offering a portfolio that includes 104 warrant holdings and 76 equity holdings, HTGC is up 34% in the past year and +18% YTD.
Hercules has A’s in Valuation, Growth, Profitability, Momentum and a B+ in Revisions. HTGC’s net income margin of nearly 70% crushes the Financials sector median of 23%. EBIT margin of 83% and LFCF margin of 44% also underpin an ‘A+’ Profitability Grade. Hercules has an A- Quant Valuation Grade, with trailing PEG ratio of 0.19, 52% below the sector median. After paying its shareholders a dividend for 17 consecutive years and a forward yield of 8.17%, Hercules showcases why it made the Quant list of strong buy stocks.
9. Kirby Corporation (KEX)
Market Capitalization: $6.92B
Quant Rating: Strong Buy
Quant Sector Ranking (as of 6/18/24): 23 out of 627
Quant Industry Ranking (as of 6/18/24): 2 out of 23
Kirby Corporation (KEX) is one of the U.S.'s largest inland and offshore tank barge operators, transporting bulk liquid products along the Mississippi River and Gulf of Mexico Intracoastal and a key link between U.S. and global trade.
KEX is well positioned for growth and is capitalizing on the liquid cargo transportation business services 27% inland (barge count) and 16% of coastal share (capacity) as of March 31, 2024; it also has no competition from foreign companies due to the Jones Act. High customer demand, limited barge and large capacity vessel availability has allowed KEX to capture the #2 quant-rank for Marine Transportation stocks. It has rallied over 50% YTD on strong earnings and growth, including a Q1 2024 EPS of $1.19 beat by $0.21 and revenue of $808.02M (7.67% YoY) that beat by $19.46M.
In addition to strong return on capital investment decisions, Kirby grew EBITDA TTM +37% YoY, EBIT +64%, and EPS +74%. EPS long-term growth FWD is 30%, EBIT FWD 40%, and FCF per share GR FWD is 40% for an ‘A’ Growth Grade. Kirby’s PEG FWD of 0.73 is more than 55% below the sector median. Kirby EPS is projected to grow over 40% in FY24 and 25% in FY25.
10. General Motors Corporation (GM)
Market Capitalization: $54.05B
Quant Rating: Strong Buy
Quant Sector Ranking (as of 6/18/24): 7 out of 512
Quant Industry Ranking (as of 6/18/24): 1 out of 30
GM is the top quant-rated automaker stock, +30% YTD and +27% in the past 12 months, sporting ‘As’ in all five factor grades. GM is trading at a mere 4.95x earnings, a 68% discount to the sector. PEG FWD ratio is 0.44 vs. the sector’s 1.51. EV/EBITDA FWD ratio of 6.53 is 32% below the sector median. EPS growth YoY is 25%, EPS FWD +8%, and 1Y dividend growth rate is 44%. GM has ROE of 15%, 35% above the sector median of 11.5%. General Motors’ Q1 2024 EPS of $2.62 beat by $0.50. FY24 EPS is projected to grow 24%, according to consensus estimates.
GM has 22 up revisions to 1 down revision in the last 90 days, and given its focus on gaining market share through software and supply chain improvements, streamlining operations, and capitalizing on electrification trends, GM’s robust financials and solid price-performance have highlighted it along with nine other picks as the Top 10 Stocks for the second half of 2024.
Concluding Summary
We have many stocks with strong buy recommendations, and you can filter them using Stock Screens to suit your specific investment objectives. The Top 10 Stocks For H2 2024 possess quant Strong Buy ratings, excellent momentum, major earnings growth potential, and rock-solid investment fundamentals. The list is up by an average of more than 130% in the past year and 58% YTD and includes stocks positioned to benefit from tech trends and commodity price surges. If you're seeking a limited number of monthly ideas from the hundreds of top quant Strong Buy-rated stocks, consider exploring Alpha Picks.
I am Steven Cress, Head of Quantitative Strategies at Seeking Alpha. I manage the quant ratings and factor grades on stocks and ETFs in Seeking Alpha Premium. I also lead Alpha Picks, which selects the two most attractive stocks to buy each month, and also determines when to sell them.
