In the ever-shifting landscape of the stock market, separating the wheat from the chaff is no easy feat. It’s a world where the wrong picks can erode your hard-earned gains, but the right ones? They have the power to catapult your portfolio to new heights. With thousands of stocks in the fray, pinpointing those poised for a breakthrough can feel like searching for a needle in a haystack.
This is where we step in. Every week, we comb through the market’s labyrinth, scrutinizing trends, earnings reports, and industry shifts. Our goal? To distill this vast universe of stocks down to a select few – those unique opportunities that are primed for significant movement in the near future.
This week, we’ve zeroed in on three standout stocks. These aren’t your run-of-the-mill picks; they are the culmination of rigorous analysis and strategic foresight. We’re talking about stocks that not only show promise in the immediate term but also hold the potential for sustained growth.
Campbell Soup Co. (NYSE: CPB): Long-Term Growth Powered by Rao’s Brand Expansion
Campbell Soup Co. (CPB) is well-positioned for long-term growth, particularly due to its acquisition of Sovos Brands earlier this year for $2.7 billion. The deal brought Rao’s, a popular premium sauces brand, under Campbell’s umbrella, and this has been a key driver of the company’s performance. Although Rao’s retail sales growth slowed slightly to 18.7% in the fiscal first quarter (down from 23.9% the prior quarter), the brand is still experiencing solid growth and has plenty of room to expand. With plans to enter new markets and broaden its white sauce offerings, Rao’s could continue to boost Campbell’s revenue in the years ahead.
The stock has also seen a dip of more than 10% over the past three months, making it an attractive entry point for investors looking to capitalize on future growth. Analysts view Campbell as one of the better-positioned large-cap food names, with continued strong growth expected for the Rao’s brand.
While there could be some potential headwinds due to steel tariffs under President-elect Donald Trump’s second term—since Campbell uses steel for its soup cans—the company has already secured its 2025 annual steel contract. Additionally, steel prices remain depressed, and about 75% of the steel used in the U.S. is produced domestically, which helps mitigate tariff risk. Given this, the potential tariff impact on Campbell’s costs seems limited.
With its growing portfolio, including the promising Rao’s brand, and favorable risk mitigation strategies in place, Campbell Soup offers a compelling investment opportunity for long-term growth.
Microsoft (MSFT): A Key Player Poised for Strong Upside in Tech ETF Rally
Microsoft (MSFT) may be one of the largest software companies in the world, but it has been lagging behind recently, particularly in comparison to its peers in the iShares Expanded Tech-Software Sector ETF (IGV). Over the past three months, Microsoft has seen a modest 3% gain, while the broader IGV ETF has surged 23%. This divergence presents a potential opportunity for investors, especially given Microsoft’s position within the ETF and its track record of breakout patterns.
Despite some short-term volatility, Microsoft remains within a large symmetrical triangle pattern on its weekly chart, indicating that it has the potential for a breakout. Historically, similar consolidations have resulted in significant upward moves, and with Microsoft’s strong fundamentals and dominance in the software sector, it’s likely poised to benefit from the ETF’s continued growth.
The IGV ETF has recently made new all-time highs, driven by its key holdings, with Microsoft being one of the largest but underperforming constituents. As the ETF continues to climb, it’s reasonable to expect that Microsoft’s relative weakness to its sector could reverse, contributing to a powerful rally for the stock. The fact that the MSFT/IGV relative strength line has recently become oversold signals that the stock may be due for a rebound, especially when you consider that similar conditions in the past have been followed by strong performances.
With Microsoft positioned to reassert its leadership role within the IGV ETF, this stock is one to keep an eye on for the next potential up leg in the tech sector. The recent weakness presents a buying opportunity before the next breakout.
Telephone and Data Systems (NYSE: TDS): Positioned for Gains Amid Deregulatory Shifts
Following President-elect Donald Trump’s recent election victory, the telecommunications sector, particularly companies like Telephone and Data Systems (TDS), is set to benefit from anticipated changes in regulatory policies. Trump’s administration is expected to adopt a more deregulatory approach, which could significantly impact net neutrality and antitrust enforcement within the tech and telecom industries.
This pro-business stance is likely to create a more favorable environment for TDS, especially with the expected reversal of current net neutrality rules. Brendan Carr, a Republican FCC Commissioner and a probable appointee for FCC Chairman, has expressed opposition to net neutrality, advocating for reduced regulatory oversight of broadband providers. This shift could pave the way for TDS to enhance its operations without the burden of stringent regulations.
TDS has demonstrated impressive performance metrics, reporting a 10% year-over-year increase in revenue to a record $4.89 billion in its recent third-quarter earnings. The company has achieved notable growth across its core segments: Digital Media, Document Cloud, and Experience Cloud, which saw increases of 11%, 15%, and 11%, respectively. The stock has advanced more than 76% year-to-date, with an even bigger run of around 109% over the past six months.
Currently, 67% of analysts rate TDS as a buy, with a median 12-month price target of $45.50, indicating a potential 42% upside from current levels. As TDS navigates this new regulatory landscape, it is well-positioned for further gains, making it a compelling addition to your watchlist.
