Institutions and billionaire investors worldwide are already well ahead of the game when it comes to AI-powered investing, extensively using, customizing, and developing it to bulk up their returns and minimize losses.
Now, InvestingPro users can do just the same from the comfort of their own homes with our new flagship AI-powered stock-picking tool: ProPicks.
By combining over 50 financial signals, ProPicks leverages the power of AI to bring you six actively managed strategies that will help you beat the market by a comfortable margin both in good and difficult times.
Today, we will have a look at the first strategy in our list: Beat the S&P 500.
As the name implies, this strategy leverages advanced AI models to analyze financial data from all 500 stocks in the S&P 500 index, with a focus on identifying the top 20 performers each month that exhibit the highest potential for outperformance.
Historical data shows that our strategy would have beaten the market by a wide margin over the last decade, as seen in the chart below:
Source: InvestingPro ProPicks
The strategy is rebalanced on a monthly basis, guaranteeing that our users stay ahead of curve amid shifting market dynamics and an ever-changing macroeconomic environment.
Let's take a deeper look at three of the stocks currently highlighted within the Beat the S&P 500 strategy, namely Pfizer , ON Semiconductor , and Centene to understand why they are likely to outperform the market going forward.
InvestingPro users can see the full strategy - along with the other five ProPicks strategies - on our ProPicks home page.
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*Readers of this article can enjoy an additional exclusive 10% discount on the annual plan by applying the coupon code BSP5001, and a 10% discount on the bi-yearly plan by using the coupon code BSP5002 during at checkout!
1. ON Semiconductor (ON)
- InvestingPro Health Label: Great
- InvestingPro Fair Value: Undervalued (26.4% Upside)
- Forward P/E Ratio: 13.8x
- Dividend Yield: 0.0%
ON Semiconductor (NASDAQ:ON) provides intelligent sensing and power solutions in the United States and internationally. Its intelligent power technologies enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers fast-charging systems, and propels sustainable energy for the solar strings, industrial power, and storage systems.
Shares are up 13.8% in the past month and 14.3% year to date.
What do Wall Street analysts say?
According to analysts surveyed by InvestingPro, ON Semiconductor is Undervalued with 25.7% Upside.
Most recently, in November, Roth/MKM initiated coverage on ON Semiconductor with a Buy rating. In October, Craig-Hallum and Summit Insights downgraded the stock from Buy to Hold, and Baird downgraded from Outperform to Neutral with a price target of $60.00 (from $120.00), writing:
In addition to a resumption of under-utilization charges across analog companies, lead times are rapidly normalizing, which should bring pricing pressures, in our view. We view 2H22 as a mid-cycle correction, not a true downturn.
Key recent news
In October, ON Semiconductor reported Q3 earnings of $1.39 per share on revenue of $2.18 billion. Analysts were looking for $1.34 earnings on revenue of $2.15B.
Furthermore, the company announced that they will be reducing their workforce by 900 jobs as they foresee a sluggish Q4.
2. Centene (CNC)
- InvestingPro Health Label: Great
- InvestingPro Fair Value: Undervalued (39.8% Upside)
- Forward P/E Ratio: 16.1x
- Dividend Yield: 0.0%
Centene (NYSE:CNC) operates as a healthcare enterprise that provides programs and services to under-insured and uninsured families, commercial organizations, and military families in the United States. It operates in two segments, Managed Care and Specialty Services.
Shares are up 6.8% in the past month and down 10.2% year to date.
What do Wall Street analysts say?
According to analysts surveyed by InvestingPro, Centene is Fairly valued with 17.7% Upside.
Most recently, in September, BofA Securities upgraded Centene from Underperform to Neutral with a price target of $72.00 (from $79.00).
The company is now trading below 10x 2024E EPS, which is historically a floor for MCO valuations, while the new earnings expectations have been rebased to (at least partially) include most of the major risks (RFP losses, Medicaid redeterminations, MA margins).
Key recent news
In October, Centene reported Q3 earnings of $2.00 per share on revenue of $38.04B. Analysts were looking for $1.53 earnings on revenue of $36.2B.
In November, Centene announced the appointment of Susan Smith as its Chief Operating Officer (COO), effective January 1, 2024.
3. Pfizer (PFE)
- InvestingPro Health Label: Great
- InvestingPro Fair Value: Undervalued (41.6% Upside)
- Forward P/E Ratio: 16.4x
- Dividend Yield: 5.4%
Pfizer (NYSE:PFE) is a world-renowned pharmaceutical behemoth with a massive number of well-known brands under its umbrella, including its COVID-19 vaccines and potential future mRNA and antiviral products.
Shares are up 1% in the past month and down 37.8% year to date.
What do Wall Street analysts say?
According to analysts surveyed by InvestingPro, Pfizer is Fairly valued with 24.7% Upside.
Most recently, in October, Jefferies upgraded Pfizer to Buy from Hold, and UBS started coverage on the stock at Neutral, writing:
“Pfizer screens well, in our view, with some investors sensing a potential trough. However, we see it being tough to turn sentiment around given a lack of meaningful catalysts on the horizon, continuing uncertainty over COVID, and less BD optionality post-Seagen.”
Key recent news
In October, Pfizer reported a Q3 loss of $0.17 per share on revenue of $13.2B. Analysts were looking for a $0.08 loss on revenue of $13.33B.
Also in October, Pfizer reported a 6.26% passive stake in Tourmaline bio (TRML) as of October 19.
Readers of this article can enjoy an additional exclusive 10% discount on the annual plan by applying the coupon code BSP5001, and a 10% discount on the bi-yearly plan by using the coupon code BSP5002 during at checkout!