The Zen Ten - My Top Picks for 2024

PUBLISHED Feb 6, 2024, 2:22:14 AM        SHARE

img
imgzen investor blog

I’ve been publishing the Zen Ten list each December since 2008. I pick my favorites and stick with them all year – no trading.

Before I reveal my new stock picks for 2024, a quick review of last year’s picks is in order. Table 1 has the details.

Table 1. 2023 Zen Ten Performance

Zen Ten 2023

As you can see, my 2023 picks outperformed (by a factor of 2X) the benchmark VTI. I don’t cherry-pick the start and end dates, I use the actual start and end dates for all securities, including VTI, based on the date I published the list.

Why you should pay attention to this list

I have been trading and managing money for 30 years. I'm still a stock picker at heart, but now I only do it for my own account, my family, and for consulting clients who ask me to pick stocks for them.

I do not claim to have a special gift for spotting the next Google or Amazon. I don't have a crystal ball. I’m skilled, but it takes more than skill to get the results I get - it also takes a little bit of luck.

I've managed to beat the market by an average of 3.7% per year over the past 10 years. Since I began using this list with clients in 2000, I’ve beaten the market by an average of 9.1% per year.

Table 2. My full track record back to 2000

My winning record isn't all down to luck. I do have a system, and it's been working since 2000. The problem, of course, is that any system can stop working at any time and without warning. I'll explain how my system works in a minute, but first take a look at the results of my picks from 2000 (the first year I used them with client money) through 2023.

Zen Ten full record

In addition to skill and some hard work, my success with picking stocks is also due to a strict methodology that I follow - no matter what. I don't just throw darts at the Wall Street Journal stock tables. There's a method behind what I do. But anyone who beats the market repeatedly, as I have done throughout my career, must have some kind of an edge. My edge is my methodology.

My Methodology

Now let's move on to the issue of how I arrive at my stock picks. For the past ten years, I have published a list of stocks that I thought would be solid performers over the following 12 months. Finding these stocks is a matter of filtering the universe of available stocks using three different criteria. Here's a quick review:

Starting with a universe of 8,000 stocks, I first screen for the ones that are rated 1 or 2 by Zacks Investment Research. This screen is all about earnings - growth, positive surprises, and upward revisions. This narrows the list of candidates to about 900 names.

Next, I cross-reference the Zacks list with Refinitiv top-rated stocks. The Refinitiv screen looks for top scores in Value, Quality, Earnings Growth, and Financial Stability. This complements the earnings focus of the Zacks screen. The list of candidates that pass both of these screens is now down to about 400.

Lastly, I run the surviving names through the StockRover screen and keep only the names that scored at least an 80 on their 100-point scale for profitability, sustainability, and margin of safety. The screen consolidates the opinions of all the analysts who cover the stocks, and it gives more weight to those analysts who have proven to be the most accurate in each of the stocks over time.

The 10 stocks that made it through all three of these screens for 2024 appear below:

Table 3. My top picks for 2024

Zen Ten 2024

The advantage of using this three-step screening process is that each screen focuses on a different aspect of what makes a stock attractive. It's a Bayesian approach to stock selection. You begin with a prior probability (the Zacks rank has a history of identifying winning stocks), and you further refine the list by adding layers of non-correlated screening criteria.

I didn't spend months analyzing financial statements and visiting these companies in person. I'm relying on the analyst community to do that for me. My methodology takes into account a consensus of top analysts and how their earnings estimates have changed over time.

Final Thoughts

I can be reasonably confident that these are solid companies producing solid and growing earnings, and they can be a powerful addition to your own watch list as long as you do your own due diligence. I do not recommend that anyone blindly follows my picks - always do your own research.

Originally Posted on zeninvestor.com


Sound investments
don't happen alone

Find your crew, build teams, compete in VS MODE, and identify investment trends in our evergrowing investment ecosystem. You aren't on an island anymore, and our community is here to help you make informed decisions in a complex world.

More Reads
5 Key Benefits of Long Term Investing in Dividend Stocks
Image

Overall, long-term dividend investing in individual dividend stocks can be a reliable and potentially lucrative way to build wealth and generate passive income over the long term

You Can Be an Excellent DIY Investor
Image

First, save money to invest. That is: don’t spend everything that you make. Next, invest consistently in a reasonable way. That’s it! That’s all it takes to be an excellent DIY investor!

IBM Dividend Safety Analysis
Image

International Business Machines (IBM) is a stock investors love to hate. But after years of underperformance, the share price has recovered to levels last seen in early 2017.

Thermo Fisher Scientific Consistently Creates Shareholder Value
Image

Thermo Fisher’s share price can be volatile. Just before Christmas 2021, for example, TMO’s share traded above $660. At the beginning of March 2022, however, the share price had plummeted to ~$530.

Western Alliance Bank: A Golden Opportunity if we can just Stay Calm
Image

As Western Alliance has dropped from the headlines, the company’s stock has begun to rebound. The stock received a bump after each earnings announcement by reporting the “business as usual”. As we will see, if Western Alliance can continue business as usual, the bank may be a fantastic investment opportunity.

Is Southern Company a Buy?
Image

Southern Company’s price target is neutral at $70. Expect the utility’s price volatility to peak at plus or minus 20% from this price target but not improving too far past this price point for the next few years.

Is Atkore Inc (ATKR) a Buy?
Image

Atkore is an intriguing stock to analyze. It is well liked by institutional investors and value investors due to its high return on equity and consistent earnings growth.

Is American Electric Power (AEP) a Buy?
Image

AEP is overvalued when above $98 and undervalued at $79. At its current price of around $74, the company is likely to be undervalued with an estimated two-year return of 21%.

Is JP Morgan Chase (JPM) a Buy?
Image

JPM is a buy as of Q3 2023. The estimated 2-year return from the recent price is 21.8%. The stock is estimated to be undervalued at $130 and overvalued at $190.

Is Value Investing Risky?
Image

A value investing strategy may be utilized to create high returns for low risk. However, the risk with value investing fluctuates depending on the individual investor and their implementation of the strategy.

Is American Express Stock a Buy?
Image

American Express is not a “set it and forget it” stock. If American Express stops growing its payment network, you need to stop what you’re doing and check out its competitors.

Dividend Income Summary: Lanny’s April 2023 Summary
Image

This is what dividend investing is all about! Investing in dividend stocks allows YOU to earn dividend income, the best passive income stream! Bias, you better believe it.

Leggett & Platt: A Beaten Down Dividend King
Image

This Dividend King has had a rough 52 weeks. Over the last 52 weeks, Leggett & Platt (LEG) is down 15% of the last 52 weeks and down 23% over the last 5 years.

Lowe’s (LOW): A Worthy Dividend King
Image

If you are looking for a high-quality dividend growth company, you will be very interested in our next undervalued stock. Today we will be discussing Lowe’s Companies, a Dividend King.

Recent Stock Purchase April 2023
Image

As you know by now I make a stock purchase every single month no matter what is going on in the world and despite the doom and gloom headlines.

Looking into the JEPI ETF Hype… What is this ETF?!
Image

There is an ETF in this dividend investing, social media driven world at the moment. No, today’s video isn’t about Charles Schwab’s SCHD! Today’s video is about the premium income ETF – JEPI from JPMorgan Chase. This high yielding, almost 10%, ETF has garnered the attention of many investors portfolio.

Is Caterpillar a Buy?
Image

Caterpillar is an industrial company best known for its construction equipment. Some lesser known components of its business are diesel engines, mining equipment, and financing.

3 Dividend Kings for Long-Term Investors
Image

There are no better stocks for long-term dividend growth and creating passive income than the Dividend Kings. They have stood the test of time.

3 Bank Stocks for 2023
Image

Some banks, such as Silicon Valley Bank (SIVBQ), Credit Suisse, and so on, have recently made the news due to the problems they experienced.

The Best Long-Term Stocks To Buy In 2023
Image

Investing in long-term stocks helps one avoid most of the drama that the mainstream media loves to cover on Wall Street.

Resources for Publishers
Resources for New Investors
Boosted with BossCoin
Financial Literacy Leaders
user_profile
Tom Hamilton
user_profile
Wise Intelligent
user_profile
Mark Robertson
user_profile
Kevin Matthews II
user_profile
Akeiva Ellis
user_profile
Brendan Dale
user_profile
Kenneth Chavis IV
user_profile
Sharita Humphrey