cnbc.com
Goldman Sachs: Underperforming Stocks Poised for Q1 2025 Gains
Goldman Sachs predicts substantial gains in several underperforming 2024 stocks—Conagra Brands, TripAdvisor, and Pool Corporation—in the first quarter of 2025, based on a 13-year-proven trend of laggards outperforming, despite a worse-than-average underperformance this year (-39% vs. -27%).
- How does Goldman Sachs's investment strategy targeting 'laggards' differ from the overall market sentiment, and what historical data supports their approach?
- The analysis focuses on 'laggards'—stocks in the bottom third of year-to-date performance against S&P 500 constituents and sector peers, or exhibiting significant drawdowns. Goldman's strategy targets stocks with differentiated buy ratings, where their bullish view contradicts the market consensus of neutral or sell ratings. This approach leverages historical data showing that such laggards often rebound.
- What are the potential risks and limitations associated with Goldman Sachs's prediction of gains in these underperforming stocks, and what factors could impact the accuracy of their forecast?
- Goldman's prediction for a first-quarter 2025 surge in these laggards is based on historical data showing success in similar situations. However, the current year-to-date underperformance (-39%) is worse than the long-term average (-27%), suggesting a higher risk, but potentially higher reward. The specific stocks highlighted (Conagra Brands, TripAdvisor, and Pool Corporation) represent examples of this strategy, with Goldman's buy ratings against prevailing market negativity.
- What specific stocks identified by Goldman Sachs as 2024 laggards are predicted to experience substantial gains in the first quarter of 2025, and what is the rationale behind these predictions?
- Goldman Sachs identifies several underperforming 2024 stocks poised for substantial gains, citing a 13-year-proven trend since 2002. Healthcare, Industrials, Tech, and Consumer sectors are prominently featured, exhibiting slow financial returns and high growth. This contrasts with the S&P 500 and Nasdaq reaching new closing records, with the Dow closing above 45,000 for the first time.
Cognitive Concepts
Framing Bias
The framing is heavily positive, focusing primarily on the potential for significant gains in the mentioned stocks. The headline and introductory paragraphs emphasize the positive outlook provided by Goldman Sachs, potentially overshadowing the risks or alternative perspectives. The inclusion of record highs in major indices could create an impression of an overall positive market and thereby making these recommendations appear safer than they are.
Language Bias
The language used is mostly neutral, but phrases like "poised for substantial gains" and "could outperform" are subtly optimistic and suggestive of a higher probability of success than may be warranted. The repeated emphasis on Goldman Sachs's positive outlook could also be interpreted as subtly influencing the reader.
Bias by Omission
The article focuses heavily on Goldman Sachs's predictions and analysis, potentially omitting other expert opinions or market analyses that might offer a more balanced perspective. It also doesn't discuss potential risks associated with investing in these specific stocks or the broader market. The lack of discussion on negative factors could mislead readers into believing these stocks are guaranteed to perform well.
False Dichotomy
The article presents a somewhat false dichotomy by suggesting that these underperforming stocks are either poised for substantial gains or will continue to underperform. It neglects the possibility of the stocks remaining stagnant or experiencing moderate growth, and does not address the uncertainty inherently involved in stock market predictions.
Sustainable Development Goals
The article discusses stocks poised for substantial gains, potentially leading to economic growth and improved financial situations for investors. Increased investment and market activity can stimulate economic growth and create job opportunities within the financial sector and related industries.