As the 'Magnificent Seven' trade becomes increasingly popular, investors may find an opportunity in a contrarian view. Bank of America highlights potential headwinds and declining price targets for three of these stocks, suggesting an accelerated sell-off might be on the horizon. This presents a chance for retail investors to capitalize on market oversaturation.
As the Magnificent Seven trade becomes overcrowded, investors can take on a potentially profitable contrarian view.
Retail investors can make a bet or take on an opposing view with increased odds of success whenever a market gets too crowded on the long or short side. Like the 2008 financial crisis, when everyone bet in favor of housing only to find out they all had to run for the exit all at once, only a few investors could spot this unfair advantage opportunity.
The good news for bulls is that China is back online, and Tesla has been expanding its footprint in Asia’s powerhouse. Peers in the region, like This means that, even if delivery numbers are bullish, Tesla has little room to keep moving higher. This is why Wall Street analysts now only forecast $0.63 earnings per share in the next 12 months, calling for net growth of 21.1% from today’s $.52.
Even though Apple is an international giant able to cushion whatever consumption tailwinds come from the United States, the same reasoning applies when it comes to pricing in this safety and growth potential. Apple stock now trades at 51.6x P/B compared to other peers in the technology space, likeAnalysts at Barclays now see a valuation of $186 for Apple stock, which calls for a net downside of 17.8% from where the stock trades today.
Magnificent Seven Contrarian Investing Stock Market Bank Of America Overcrowded Trades
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