Last year, I was asked by a local investing club to provide a list of ValuEngine’s top 10 stock picks for 2024. I screened our list for top-rated stocks with at least $10 Billion in Market Capitalization and excluded ADRs and stocks not ranked by any analysts according to our data feed. This top 10 list, that was published in the January 2024 ValuEngine blog “stocks to Watch in 2024”, is posted with returns for each stock below, and you can re-read that post in its entirety here: http://blog.valuengine.com/index.php/stocks-to-watch-in-2024/
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The list included three Internet companies: Spotify (SPOT); Affirm Holdings (AFRM); and Okta (OKTA). Also Included were three software companies: Twilio (TWLO); Block (SQ); and Unity Software (U). Rounding out the field were two companies in the Leisure and Gambling Sector, Carnival (CCL) and DraftKings (DKNG); along with Auto/Tech company Tesla (TSLA) and Media company Roku (ROKU).
Here were the results for calendar year 2024:
| Ticker | Company Name | Sector Name | Price 12/31/2024 | Price 12/29/2023 | 1-Yr. Price Return |
| CCL | CARNIVAL CORP | Consumer Discretionary | 24.54 | 18.31 | 34.03% |
| AFRM | AFFIRM HOLDINGS | Business Services | 62.63 | 46.60 | 34.40% |
| TWLO | TWILIO INC-A | Computer and Technology | 108.62 | 75.87 | 43.17% |
| TSLA | TESLA INC | Auto-Tires-Trucks | 417.41 | 250.08 | 66.91% |
| ROKU | ROKU INC | Consumer Discretionary | 74.89 | 91.65 | -18.29% |
| SPOT | SPOTIFY TECH SA | Business Services | 451.79 | 188.80 | 139.30% |
| DKNG | DRAFTKINGS INC | Consumer Discretionary | 37.10 | 35.25 | 5.25% |
| U | UNITY SOFTWARE | Computer and Technology | 22.51 | 40.89 | -44.95% |
| OKTA | OKTA INC | Computer and Technology | 79.64 | 90.53 | -12.03% |
| SQ | BLOCK INC | Business Services | 87.48 | 77.35 | 13.10% |
| Total VE Top 10 Portfolio | Equal-Weight | 26.09% | |||
| Comparisons/
Benchmarks: |
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| SPY | S&P 500 SPDR Trust ETF | 588.22 | 469.23 | 24.89% | |
| RSP | Invesco S&P 500 Equal Weight ETF | 175.23 | 155.36 | 12.78% | |
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The results indicate that this methodology applied at the end of 2023 resulted in a strong top ten list in 2024. In a year that Standard & Poor’s SPIVA (S&P vs. Active) Blog reported that more than 75% of actively managed mutual funds underperformed the 24.9% gain of the S&P 500 SPDR Trust ETF (SPY), an equally weighted portfolio of these 10 stocks would have gained 26.1%. This is not statistically significant outperformance, but it is worth noting in a year that any edge in rates of return was quite rare.
Moreover, it is well known that the ”Magnificent” top-seven mega-caps drove the performance of the cap-weighted index while the average S&P 500 stock did not perform nearly as well. Since we equally weight our top ten portfolio, a better benchmark ETF would have been the Invesco S&P 500 Equal Weight ETF (RSP). Here, the ValuEngine Top 10 portfolio more than doubled the 12.8% recorded by RSP. Another way of looking at it is that the price change of the average stock in the VE Top 10 was double that of the average stock in the S&P 500 Index. Moreover, this performance was achieved with just one mega-cap stock, Tesla (TSLA). Not one of the other nine stocks are in the largest 100 within the S&P 500 and more than half of the stocks are considered midcap.
Since the methodology produced such a resilient portfolio, we repeated the process using ValuEngine’s data from the 12/31/2024 close to choose 10 stocks meeting this same criteria for the next year.
Introducing the Top 10 List for 2025
| Rank | Ticker | Company Name | Market Cap ($Bil) | Price | VE Rating | Forecast Ranking | Valuation Ranking |
| 1 | CVNA | CARVANA CO | 36.8 | 203.40 | 5 | 100 | 86 |
| 2 | TWLO | TWILIO INC-A | 17.3 | 108.10 | 5 | 100 | 86 |
| 3 | PYPL | PAYPAL HOLDINGS | 87.8 | 85.35 | 5 | 100 | 81 |
| 4 | CRDO | CREDO TECH GRP | 12.1 | 67.21 | 5 | 99 | 62 |
| 5 | THC | TENET HEALTH | 11.7 | 126.20 | 5 | 99 | 78 |
| 6 | CHWY | CHEWY INC | 14.7 | 33.49 | 5 | 99 | 72 |
| 7 | SQ | BLOCK INC | 56.8 | 84.99 | 5 | 99 | 85 |
| 8 | ISRG | INTUITIVE SURG | 190.7 | 522.00 | 5 | 99 | 92 |
| 9 | DOCU | DOCUSIGN INC | 18.2 | 89.94 | 5 | 99 | 83 |
| 10 | GM | GENERAL MOTORS | 56.9 | 53.27 | 5 | 98 | 55 |
Current ValuEngine reports on all covered stocks and ETFS can be viewed HERE
All ten stocks receive ValuEngine’s highest rating of 5 (Strong Buy). All are in the top 50% of our universe according to our valuation model. The two company names in bold are holdovers from last year’s list.
Here are some brief business summaries for the companies behind these stocks.
Carvana Corp. (CVNA) together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. Its platform allows customers to research and identify a vehicle; inspect it using the company’s 360-degree vehicle imaging technology; obtain financing and warranty coverage; purchase the vehicle; and schedule delivery or pick-up from their desktop or mobile devices. The company also operates auction sites. The company was founded in 2012 and is based in Tempe, Arizona.
Twilio Inc. (TWLO) together with its subsidiaries, provides customer engagement platform solutions in the United States and internationally. The company provides various application programming interfaces and software solutions for communications between customers and end users, including messaging, voice, email, flex, marketing campaigns, and user identity and authentication. Twilio Inc. was incorporated in 2008 and is headquartered in San Francisco, California.
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PayPal (PYPL) – operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It operates a two-sided network at scale that connects merchants and consumers that enables its customers to connect, transact, and send and receive payments through online and in person, as well as transfer and withdraw funds using various funding sources, such as bank accounts. The company provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company was founded in 1998 and is headquartered in San Jose, California.
Credo Technology Ltd (CRDO) provides various high-speed connectivity solutions for optical and electrical Ethernet applications globally. Its products include HiWire active electrical cables, optical digital signal processors, low-power line card PHY, and SerDes IP, as well as integrated circuits, active electrical cables. The company also offers intellectual property solutions. It sells its products to hyperscalers, OEMs, ODMs and optical module manufacturers. The company was founded in 2008 and is based in Grand Cayman, Cayman Islands.
Tenet Healthcare Corporation (THC) operates as a healthcare services company in the United States. The company operates through two segments: Hospital Operations and Services, and Ambulatory Care. Its general hospitals offer acute care services, operating and recovery rooms, radiology and respiratory therapy services, clinical laboratories, and pharmacies. The company also provides intensive and critical care, and/or coronary care units; cardiovascular, digestive disease, neurosciences, musculoskeletal, and obstetrics services; outpatient services, including physical therapy; tertiary care services, such as cardiothoracic surgery, complex spinal surgery, neonatal intensive care, and neurosurgery services; quaternary care services in heart and kidney transplants; and limb salvaging vascular procedure, acute level 1 trauma, intravascular stroke care, minimally invasive cardiac valve replacement, imaging, surgical robotic, and telemedicine access services. In addition, it offers a range of procedures and services, such as orthopedics, total joint replacement, and musculoskeletal procedures; gastroenterology; pain management; otolaryngology; ophthalmology; and urology. It operates hospitals, ambulatory surgery centers, imaging centers, surgical hospitals, and micro-hospitals. Tenet Healthcare Corporation was founded in 1967 and is headquartered in Dallas, Texas.
Chewy, Inc. (CHWY), together with its subsidiaries, engages in pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications. The company was founded in 2010 and is based in Plantation, Florida.
Block, inc. (SQ) – operates as a technology company with a focus on financial services. It builds tools to help people to access the economy. Its products include Square that makes commerce and financial services easy and accessible for sellers with its integrated ecosystem of technology solutions; Cash App to send, spend, or invest money in stocks or bitcoin; Afterpay for connecting consumers and businesses; TIDAL; and TBD that is building an open source platform and developer infrastructure which enables everyone to participate in the global economy. The company, formerly known as Square, Inc. was incorporated in 2009 and is based in Oakland, California.
Intuitive Surgical Inc. (ISRG) develops, manufactures, and markets products that enable physicians and healthcare providers to enhance the quality of and access to minimally invasive care in the United States and internationally. The company offers the da Vinci Surgical System that enables complex surgery using a minimally invasive approach; and Ion endoluminal system, which extends its commercial offerings beyond surgery into diagnostic procedures enabling minimally invasive biopsies in the lung. The company sells its products through direct sales organizations, such as capital and clinical sales teams. It has a collaboration agreement with FluoGuide A/S for head & neck cancer. The company was incorporated in 1995 and is headquartered in Sunnyvale, California.
DocuSign, Inc. (DOCU) provides electronic signature solutions globally. The company provides e-signature solution that enables sending and signing of agreements on various devices; Contract Lifecycle Management (CLM), which automates workflows across the entire agreement process; Document Generation streamlines the process of generating new, custom agreements; and Gen for Salesforce, which allows sales representatives to automatically generate agreements with a few clicks from within Salesforce. It also provides Identify, a signer-identification option for checking government-issued IDs; Standards-Based Signatures, which support signatures that involve digital certificates; Monitor that uses advanced analytics to track DocuSign eSignature web, mobile, and API account; Notary which enables notaries public to conduct remote online notarization transactions; and Web Forms, a web forms that quickly draft agreements using pre-populated data from completed forms or external systems via APIs. In addition, the company offers Rooms for Real Estate that provides a way for brokers and agents to manage the entire real estate transaction digitally. Signature and CLM are FedRAMP, an authorized version of DocuSign eSignature for U.S. federal government agencies; and life sciences modules that support compliance with the electronic signature practices. The company sells its products through direct and partner-assisted sales, and digital self-service purchasing. DocuSign, Inc. was incorporated in 2003 and is headquartered in San Francisco, California.
General Motors Company (GM) designs, builds, and sells trucks, crossovers, cars, and automobile parts; and provides software-enabled services and subscriptions worldwide. It markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Baojun, and Wuling brand names. In addition, the company sells trucks, crossovers, cars, and automobile parts through retail dealers, and distributors and dealers, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. Further, it offers a range of after-sale services through the dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories, and extended service warranties. Additionally, the company provides automotive financing; and software-enabled services and subscriptions. General Motors Company was founded in 1908 and is headquartered in Detroit, Michigan.
This list focuses mainly on growth companies. Beyond that, six of them focus on either direct-to-consumer sales or revenues from small businesses using their services. Many are easily recognizable names. Yet the largest company in market cap, Intuitive Surgical (ISRG), is probably one of the less familiar names to most people. The majority of the companies were founded in the 21st Century and are headquartered in the state best known for new-economy technology companies, California. One newcomer on the list, General Motors (GM), is a glaring exception to almost all the characteristics I listed. It is a value company founded more than 100 years ago and headquartered in Michigan.
This list is provided primarily as a monitoring tool. As always, potential investors and the advisors are advised to read the entire ValuEngine report and the summary prospectus among other “homework” before investing. While we are thrilled with the performance of the top ten list and the ValuEngine signals generally, 2024 is just one year and the first in which we had published a top ten list. Even 20 years of superior performance do not guarantee future success, let alone one. ValuEngine “Buy” signals in general have provided superior return records over most long-term periods and were especially strong in 2023 and 2024. However, we’ve had our signals-in-reverse years also so there are no prudent shortcuts to due diligence. Let our signals lead you to focus your investigations, then do your own homework.
________________________________________________________________
By Herbert Blank
Senior Quantitative Analyst, ValuEngine Inc
www.ValuEngine.com
support@ValuEngine.com
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