Wells Fargo U.S. equity strategist Christopher Harvey believes mid-cap stocks are the sweet spot for investors in 2023 and offers a list of potential buy options,
“We think Mid-cap Growth is in the ‘sweet spot,’ with attractive valuation, steady growth characteristics, a favorable macro environment, and constructive technicals. We present below a Russell Midcap Growth universe screen for reasonably valued candidates rated Overweight by our WFS analysts.” The stocks in the screen are Match Group Inc., Take Two Interactive, Zoom Infotech, Autozone Inc., Burlington Stores, Dollar Tree Inc., Five Below, O’Reilly Automotive, Ross Stores, Tractor Supply, Church & Dwight, Hess Corp., Arthur J Gallagher, Ares Management, Avantor Inc. , Charles River, Mettler-Toledo, Booz Allen Hamilton, Howmet Aerospace, Idex Corp., J.B. Hunt Transport, Nordson Corp., Old Dominion Freight Line Inc., Parker Hannifin, Arista Networks, Cadence Design, Gartner Inc.
“While such sell-offs typically generate opportunities, as has this one, the Global Investment Committee and Morgan Stanley & Co.’s macro strategists are not ready to declare the all-clear for US equities.
“Many years ago, stockbrokers used to take fund managers for an end-year lunch. These often included an informal stock-picking competition. Few could resist making contrarian calls.On average, contrarian stock-picking strategies underperform, and this year was no different. Bearish calls on IT worked, but their contribution was wiped out by bullish calls on China and Energy stocks. 2023: Next Year’s Asset CallsContrarians will likely be short both oil and gold, and long EM and DM equities.
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