Finding the right stocks in today’s market isn’t easy. With so many options, it’s tough to know which ones are worth your attention. But when you get it right, the payoff can be huge. That’s why we do the heavy lifting for you, sorting through the noise to bring you stocks that are set to move.
Each week, we dig into the data, look at market trends, and identify stocks with real potential. Our focus is on opportunities that aren’t just good for a quick win but have the strength to deliver ongoing growth.
This week, we’ve highlighted three stocks that stand out from the pack. Backed by solid analysis, these picks are positioned for a strong run in both the short and long term.
LPL Financial (NASDAQ: LPLA) – Hedge Funds’ Favorite in Financials
LPL Financial has emerged as a standout in the financial sector, capturing the attention of some of the most prominent hedge funds. As of the third quarter, 16% of the company’s equity cap was owned by hedge funds, making it the most concentrated long position in the sector, according to data from Goldman Sachs. High-profile investors Stephen Mandel and Dan Loeb have taken substantial stakes, with Mandel’s Lone Pine Capital investing over $500 million and Loeb’s Third Point adding $112 million last quarter.
So, why all the excitement around LPL Financial? The company has benefited significantly from the post-election rally in financial stocks, driven by optimism around deregulation under the new administration. Shares surged an impressive 41% in the fourth quarter, outpacing many of its peers in the sector.
LPL Financial’s appeal lies in its strong positioning as a leading provider of financial services to independent advisors. Its platform has consistently shown growth, benefiting from the ongoing shift of advisors and clients away from traditional wirehouses. The company also stands to gain further if proposed regulatory rollbacks materialize, potentially unlocking additional growth opportunities.
For investors seeking exposure to financials with strong momentum and significant institutional backing, LPL Financial is a name to keep on the radar. The combination of hedge fund conviction, sector tailwinds, and a proven growth strategy makes it a compelling buy candidate heading into 2025.
Howmet Aerospace (NYSE: HWM) – A Hidden Gem in Aerospace
While much of the aerospace industry struggled in 2024, Howmet Aerospace quietly delivered a standout performance. The stock climbed over 102% last year, defying the sector’s broader lackluster trends. Now, after a 7% pullback in December, the current price presents a buying opportunity for investors looking to capitalize on this resilient player.
Unlike Boeing, which has faced operational challenges and a 32% drop in its stock price last year, Howmet has demonstrated strength and consistency. The company specializes in engineered metal products, including aerospace components that are critical for modern aircraft. Its niche focus and strong execution have allowed it to outperform the broader market.
Most analysts are bullish on Howmet, with the median price target suggesting a 16% upside from current levels. This optimism is backed by the company’s ability to navigate a challenging sector and still deliver impressive returns. Howmet’s combination of growth potential and a proven track record makes it a compelling choice for investors seeking exposure to aerospace without the volatility of its larger peers.
If you’re looking for a smart aerospace play, Howmet is one to consider. The recent pullback could be your chance to get in before the next leg up.
e.l.f. Beauty (NYSE: ELF) – A Bargain with Big Growth Potential
e.l.f. Beauty, the cosmetics brand known for its affordability and innovation, could be one to watch after its sharp pullback in 2024. The stock dropped 13% last year, its first losing year since 2018, and is currently trading at nearly half of its 2024 highs when it topped $218 in June. This pullback has created an opportunity for investors looking for growth at a more reasonable valuation.
Morgan Stanley’s analyst Dara Mohsenian recently upgraded e.l.f. to overweight from equal weight, citing its “outsized long-term growth potential” and a now-compelling valuation. Mohsenian also raised the price target to $153, indicating almost 23% upside from last week’s close. While these insights originate from Morgan Stanley, the broader market trends also suggest a favorable setup for the stock.
The valuation reset, paired with e.l.f.’s consistent innovation and brand strength, makes it an intriguing play. Concerns about tariffs and difficult sales comparisons that weighed on the stock last year have largely diminished. Additionally, the broader consumer staples sector lacks the same growth potential, further highlighting e.l.f. as a standout in its category.
With the stock briefly climbing 2.5% following the upgrade and the potential for long-term growth intact, e.l.f. Beauty looks like a smart addition to your watchlist. This is a chance to grab a high-quality growth stock at a discount—an opportunity that doesn’t come around often.