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CNBC
a day ago
- Business
- CNBC
Best Stocks: This momentum play seeing huge investor accumulation is on the verge of another breakout
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh here - The S & P 500 index has fought all the way to breakeven for 2025, but there's one investment style that's blowing the doors off the rest of the stock market. If you guessed "momentum" you got it right. What's probably very frustrating for all the value investors, the minimum volatility investors, the high dividend investors and other professionals is that momentum was also the best performing factor in 2024, up more than 32% last year. Momentum was the top performing factor in 2015, 2017 and 2020. It was the second best in 2018 and has compounded at 12.7% returns for the last ten years. What does this mean for the portfolio manager who eschews the momentum factor for some other style? One more year of apologies to the end investor who wonders why everyone else is having more fun than he is. Markets are aggravating like that sometimes. On paper, a year with this much volatility and uncertainty might make the casual observer surmise that defense would be the move and momentum would be too risky. If only it were that simple. It turns out that some of the most exciting momentum stocks of 2025 are also among the names that would also be considered traditionally defensive. Take JPMorgan Chase and Walmart , for example — they're not often associated with the momentum trade, and yet they are the number two and three largest holdings in the most popular momentum stock index ETF at the moment. Go figure. For this week's update, Sean took a look at some of the names that appear on both our Best Stocks in the Market list as well as the Momentum factor index to see where we're overlapping. Right now we're overlapping a lot. There are over 40 names on the Best Stocks list that are also momentum winners this year. Take, for example, this absolute juggernaut of a company — Visa (VISA) — currently a constituent of both: Look at that springboard off the 200-day during the trade war panic of early April, you couldn't have asked for a better sign of accumulation. Visa is a Best Stock right now that looks to be on the verge of another breakout above its February all-time high. It's been a big winner ever since it was added to the Dow Jones Industrial Average back in 2013. Both long- and short-term players have been rewarded. I'll let Sean take it from here on the momentum factor and some leaderboards for the Best Stocks list. Why momentum investing works Sean — Factors are characteristics or attributes of securities that help explain their risk and return. You can slice and dice these attributes anyway you want to create a "factor," but the most popular and well-researched ones include value, momentum, size, quality, yield and volatility. These factors are used in both academic research and practical portfolio construction to identify patterns in asset performance. One of the most powerful drivers of stock market returns historically has been momentum. Momentum is a factor based on the idea that assets that have performed well in the recent past tend to continue performing into the future, and vice versa for underperformers. It's rooted in behavioral finance—investors often chase winners and avoid losers, creating a self-reinforcing cycle that pushes trending assets further in the same direction. Momentum strategies typically rank stocks by recent returns (usually over 6 to 12 months). The momentum factor fits well with our analysis as it adheres to the same central theme that technical analysis does - price is the final arbiter of what is right or wrong . Whatever is happening in the world right now has been priced in or is getting priced in as you read this article. Markets are far from efficient every moment of the day, but the current price reflects what buyers and sellers believe is fair. When a stock's price is going up, there's a good reason for it (unless you're a meme stock). Those reasons tend to be bullish for longer than people expect. An overwhelming majority of buyers in a stock is not a bad thing! It means the underlying fundamentals of the stock are set to improve, and the market is recognizing that reality! Our list of stocks is built around this idea - higher prices are telling us a story. Through all of the negative headlines, sentiment, and gloom thus far in 2025, momentum is surprisingly the best-performing factor YTD: Momentum is also notoriously volatile. It can experience sharp reversals, especially during market regime shifts, similar to what we experienced in April. Notice above, momentum was the second worst performer at the market bottom in early April. Below is the iShares MSCI USA Momentum Factor ETF (MTUM) , one of the largest momentum ETFs out there: It's outperforming the unassailable S & P 500 by 11% this year. And that's not a one-off occurrence. It's outperforming the S & P 500 on an annualized basis over the past year, 3 years, 10 years, and since inception (it's underperforming over the past 5 years on an annualized basis). There are currently 43 stocks on our list that also appear in the MTUM ETF. A couple of the big names that appear on our list and the MTUM ETF: AVGO , V , NFLX , COST , and PLTR . This year, we went from a majority of utility stocks on the list, to now a majority of industrials and tech. The dynamic nature of momentum is what makes it a high-performing strategy. It is rules-based, systematic, and adaptive. By relying on price trends rather than forecasts, momentum captures the strength of what's working now, for fundamental reasons. Here's where our list lands in terms of sector and industry exposure, as well as the 5 names with the highest RSI readings: Inside the Best Stocks As of 6/2/2025 morning, there are 112 names on The Best Stocks in the Market list Top Sector Ranking: Top Industries: Top 5 Best Stocks by Relative Strength: DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC" TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.
CNBC
5 days ago
- Business
- CNBC
These big international ETFs are outperforming the S&P 500. How to add this exposure to your portfolio
As markets grapple with President Donald Trump's evolving tariff policy, returns outside of the U.S. are looking especially attractive. Several region-specific exchange-traded funds are seeing a strong 2025, far outperforming the S & P 500 which is only marginally positive this year. Consider that the iShares China Large-Cap ETF (FXI) and the iShares Europe ETF (IEV) are scoring 2025 returns of 15.8% and 20.8%, respectively. The iShares MSCI Mexico ETF (EWW) and its Canadian counterpart (EWC) are also toting double-digit returns this year. This disparity in performance has unfolded as Trump's trade policy sows uncertainty for investors, companies and the economy, and is driving down the value of the dollar. In the latest development, the U.S. Court of International Trade ruled Wednesday that the president overstepped his authority in issuing his "reciprocal" tariffs in April. .SPX FXI YTD mountain The S & P 500 versus the iShares China Large-Cap ETF in 2025 While the S & P 500 rose in relief on Thursday, gains were held in check as traders feared policy negotiations could now drag out even longer. But there's at least one valuable lesson for investors amid all the confusion: It doesn't hurt to add some international exposure to your portfolio. "U.S. companies have been the cream of the crop over the past decade or so, but conditions change," said Callie Cox, chief market strategist at Ritholtz Wealth Management in Charlotte, N.C. "It's a good challenge of the assumptions investors hold: The U.S.'s leadership isn't always guaranteed, even though on paper it looks like we should be leading against other major regions," she added. That said, investors should proceed carefully as they ramp up global exposure. Accidental concentrations U.S. investors already have an inherent home bias, Cox said – and that's only been exacerbated by the runaway appreciation seen in the likes of tech juggernauts like Nvidia in 2023 and 2024. The downside, however, is that just as those Big Tech positions become too large as shares surge, investors' concentration in U.S. exposure can also become outsized. Financial advisors then must handle the uncomfortable task of getting those investors to diversify away from some of those positions. "We've always felt clients need to have a globally diversified portfolio," said Rafia Hasan, CFP and chief investment officer of Perigon Wealth Management in Chicago. "It's been a tough conversation to have over the past 15 years where, even over the long term, the U.S. was outperforming international markets." The tariff-driven shakeup in the U.S. market was enough to get investors asking about adding international exposure, though, she added. "This economic narrative around the U.S. and the economy – the sentiment had gotten pretty negative," Hasan said. "Now some of that has somewhat dissipated, we will continue to hold that international exposure." Diversification perks While Big Tech has driven returns in the U.S., other industries tend to dominate in international markets. "The biggest sector in developed markets is banks," said Cox. "A dominant tech sector isn't a thing in Europe for many reasons. Sometimes those more value-based sectors in the European Union can step in and help." International exposure can also offer currency diversification benefits. "In theory what should happen is if you have higher inflation in the U.S., the dollar weakens a bit, and having international investments could help offset that," said Roger Aliaga-Diaz, Vanguard's global head of portfolio construction and chief economist for the Americas. How much exposure you'll need to make a difference in your portfolio will depend on your individual circumstances. "If you take some of our portfolios, even in target-date funds, we typically have 60/40 U.S. and non-U.S. exposure," Aliaga-Diaz said, noting that this split applies to the equity sleeve. Investors who have more than 50% of their allocation toward international names run the risk of giving up the diversification of the U.S. market, he noted. But go beyond 70% exposure in U.S. names, and you run the risk of chasing performance, he added. Hasan of Perigon Wealth said that global market cap breaks down along the lines of 65% U.S. and 35% international. "That is a good starting point to think of how much to have in international," she said. "For the U.S. investor, it makes sense to have some home bias relative to the global market." Think broad exposure rather than picking regions Avoid trying to read the tea leaves on which specific nations and international companies may emerge as winners as trade policy evolves. Instead, consider adding a large, broad diversified ETF to your roster. Broad international ETFs with gold ratings from Morningstar include the Vanguard FTSE All-World ex-U.S. ETF (VEU) and the iShares Core MSCI Total International Stock ETF (IXUS) . Both are sporting year-to-date returns of nearly 14%. "There are still too many unannounced policies, and this is where the time is more for diversification, rather than trying to guess the winners and losers," Aliaga-Diaz said.
CNBC
5 days ago
- Business
- CNBC
Josh Brown's Best Stock: Darden
Josh Brown, CEO of Ritholtz Wealth Management, joins CNBC's "Halftime Report" to explain why he's adding Darden to his 'Best Stocks' in the market.
CNBC
27-05-2025
- Business
- CNBC
Best Stock: A former high flyer that's coming back into favor because of improving fundamentals
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh: This week we saw a few new names hit the Best Stocks in the Market list, including a former high-flier that's now come back into favor. Remember the Snowflake (SNOW) IPO? It was a big deal. At the time it came public in September 2020, investors were clamoring for cloud computing stocks and the whole tech sector was red hot. SNOW debuted with the largest IPO in history, raising $3.36 billion. And, if you can believe it, the stock turned out to have been underpriced. Shares were sold to the public at $120, but ultimately got as high as $300 on the first day of trading. The company had a valuation of $75 billion right out of the gate, a multiple of approximately 75 times its projected full-year revenues. Fun fact — it's the first time I can remember seeing Berkshire Hathaway on the holders list of a hot new issue (Warren Buffett's firm sold its whole position out a long time ago). If you thought that was the top, you hadn't seen anything yet. By Thanksgiving the following year, Snowflake hit its all-time high of $401.89 per share. That was the top of the post-pandemic tech rally. From there, a collapse of over 70% to an all-time low of $107 in September 2024. Shareholders who had held from the IPO for the next four years were now looking at unrealized losses after all that volatility. But then a funny thing happened. The CEO stepped back and took the chairman's role while promoting internally to bring the company's head of AI into the C-Suite and onto the board of directors. The company put together a few quarters in a row of 25% growth and has begun surprising The Street to the upside. Sean's going to share some more of the details below. This is a stock that's still 50% below its all-time high, but is now a double off of the lows and climbing. In my experience, institutions don't mind paying up for a growth company as the story improves. Snowflake's biggest drawback for most professionals has been its long and winding path to full-year profitability. Best stocks stats As of 5/27/2025 morning, there are 106 names on The Best Stocks in the Market list. Top sector ranking: Top 5 Best Stocks by Relative Strength: New addition: Snowflake Sean: SNOW was added to our Best Stocks in the Market list last week following a great earnings report. SNOW is classified as "IT Services" below, but software and software-related names are the strongest stocks in the market right now: The IGV (iShares Expanded Tech-Software Sector ETF) is up 2% in total return YTD and up 20% the past year, nearly doubling the performance of the Nasdaq 100 over the past year. Snowflake is a cloud-based data platform that enables organizations to store, manage, and analyze large volumes of data seamlessly across multiple cloud environments. You can't do anything useful in AI if your data isn't clean, organized and unified. Snowflake helps companies optimize their data for machine learning, model-training and other stuff. SNOW went public in September of 2020, right before we experienced the largest tech bubble since the dot-com implosion in 2001. It's had a difficult couple of years if you look at the chart since its inception: As a trader, it's not the prettiest chart. But if it can maintain support around the $190 level, which has been an important level of resistance for the stock going back to 2022, there's some room for the bulls to push this higher. Looking at the chart below since inception, on a weekly basis the stock has been in a down trend, but after this latest earnings beat, both moving averages are beginning to flatten, showing possible support for an uptrend: As an investor, the stock has not been rewarding, but the fundamentals are improving. During last week's earnings call, SNOW beat on the top and bottom lines, with revenue growing 4%, EBIT (earnings before interest and taxes, also known as operating earnings) growing 74%, and EPS growing 13%, all YoY. (Data via Quartr.) SNOW now has 606 companies paying them over $1 million dollars in revenue each, a figure which is up 27% year over year. Gross margins have expanded from 59% in 2021 to 67% today, bringing the company closer to its profitability goals. SNOW's net revenue retention rate hit 124% for the quarter, which is a great sign. A net revenue retention rate of 124% means that, on average, a company's existing customers are spending 24% more, even after accounting for customer churn, downgrades, cancellations, etc. In simpler terms, if you started the year with customers paying $100, by the end of that year, the same group is paying you $124 without adding any new customers. It means existing customers are growing in value to the business. SNOW is not profitable on an operating basis, but with the growth and scale they are achieving, profitability on an operating and net income basis is on the horizon, which would mean higher stock prices with it. Risk Management Josh: Below, I'm zooming in on the last 100 days or so because SNOW has run right back up to its February highs. It's just had a parabolic move higher after reporting great results. Ideally if I'm a trader, I'm waiting for an entry on a low volume pullback into the 190s. I'd use $175 - $180 as my line in the sand. That area should hold as support. If it doesn't, the setup didn't work. Longer-term investors can give it a wider berth and let the flat-lining 200-day (now at $160) turn up a bit. I'd be using that as a stop, checking it on a weekly closing basis each Friday. I was going to end this by saying "Stay Frosty" but then I'd have to slam my own fingers in a desk drawer just to distract from the cringe. And nobody wants that. Good luck out there, Sean and I will return later in the week. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC" TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.
Yahoo
27-05-2025
- Business
- Yahoo
Ritholtz Wealth Management Announces Grand Opening of New Chicago Office at Iconic Salt Shed Venue
New location reflects firm's growth, continues mission to build authentic client relationships without barriers NEW YORK, May 27, 2025--(BUSINESS WIRE)--Ritholtz Wealth Management ("RWM"), a national RIA overseeing more than $5 billion in assets for high-net-worth clients and institutions, is proud to announce the opening of its new Chicago office. Located at The Salt Shed, a multi-purpose creative hub alongside the riverfront in the heart of the city's Salt District, the new location captures the intersection of finance, culture and community — hallmarks of both Chicago and the firm itself. The new office marks an important chapter in RWM's continued growth, as well as its ongoing mission to bring thoughtful, high-impact financial advice to clients across the country. The Salt Shed, a former warehouse reimagined by 16 on Center as one of Chicago's premier cultural venues, provides a unique setting for RWM. Surrounded by neighbors like Goose Island Brewery and steeped in the city's music scene, it reinforces the spirit of innovation and community that defines the firm. "This office is a statement about who we are and how we serve our clients," said Josh Brown, CEO at Ritholtz Wealth Management. "This isn't a bank branch. It's a space that feels like Chicago — creative, raw, real. We're building a wealth management firm that defies the conventions of this industry. We're a brand that's of the people and for the people, no matter where we go. Our space in this world-class city had to reflect that and I think we nailed it." The office was designed by artist and designer Laura Novy, wife of one of RWM's most senior Chicago-based employees. The office opening represents a huge milestone for RWM and its senior people in Chicago: Anna Chaiken, Colleen Parker, Jonathan Novy and Brian Rosen, who first opened an office in the city in 2018. The space itself is traditional industrial with brick walls, wood floors and exposed ductwork. RWM was committed to maintaining the space's vintage, industrial feel and even some of the original features. A great deal of the furniture and artwork, including a vintage Herman Miller sofa and a Mies van der Rohe coffee table, were sourced by Salvage Haus, one of Chicago's premier vintage industrial design shops. All of the artwork comes from local artists and galleries. The new Chicago location already hosts 13 full-time employees, with plans to expand in the near future. As RWM's second headquarters, the office will play a key role in client service, team growth and ongoing community engagement across the Midwest. "We wanted our office to represent what is unique and special about RWM, and be authentically Chicago at the same time," said Novy. "It has to be a place where employees are excited to work, prospects and clients want to come visit, and that allows us to continue providing the best possible service and outcomes for our clients." The firm will further cement its connection to Chicago on Tuesday, June 3rd with a live taping of The Compound and Friends, the popular business and investing podcast hosted by Brown and managing partner Michael Batnick. The special live episode, taking place at the Chop Shop in the city's Wicker Park neighborhood, will feature a conversation with Kunal Kapoor, CEO of Chicago-headquartered financial services giant Morningstar. Interested parties can secure tickets on our event landing page. About Ritholtz Wealth Management Ritholtz Wealth Management is a Registered Investment Adviser based in New York City, with offices across the country, that offers a full suite of financial planning and asset management services to high-net-worth households, corporate retirement plans, endowments and charitable foundations. The firm's core principle is bringing value-added investment and financial planning help to its clients as a fee-only fiduciary advisor. For more information, please visit follow us on X @ritholtzwealth and on YouTube at The Compound. Advisory services are only offered to clients or prospective clients where Ritholtz Wealth Management and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Ritholtz Wealth Management unless a client service agreement is in place. View source version on Contacts Media Contacts: StreetCred PR Jimmy Moockjimmy@ 610-304-4570 Will Rubenwilliam@ 847-208-8289
