Julian Emanuel suggests investors look for high-cash flow stocks that the market is underestimating.meme stocksJanuary tends to be"opposite day" on the stock market, as investors often spend the month buying whatever assets did the worst the year before in the hopes that poor performers will rebound. That was definitely the case last month and in early February, when investors snapped up tech and growth stocks after dumping them throughout 2022.
But the latest rally in growth, tech, and meme stocks isn't just about buying beaten-up equities for cheap.
"A potential"Pause" does not guarantee immediate and sustained upside, but invariably more volatility - especially as signs of an economic slowdown accrue," he wrote. "Stocks which exhibit solid growth momentum and high Free Cash Flow yield are seen as insulation against a potential downturn, and those with high short interest could Outperform," he wrote."While Staples, Discretionary and Health Care historically outperform in such an environment and Energy is an in-line performer, true alpha generation remains tethered to the idea of the Stockpicker's market.