2024 | Seekingalpha.com | Top 30 stocks | Citibank.com

 

Citi’s 30 stocks for its 2024 top themes

Jan. 08, 2024 11:16 AM ETiShares Russell 1000 Growth ETF (IWF)EIX, AMZN, IWP, MA, GPN, FI, EQIX, NOV, CCL, GTLS, MLM, ACM, LRN, SSNC, UAL, META, WIX, QTWO, GOOGL, GDDY, W, HUBS, PYPL, UBER, DOCU, DKNG, DASH, U, RBLX, APP, SQSPBy: Monica L. Correa, SA News Editor23 Comments

Citi, in its Thematic Equity Strategy report, published its 30 top buy-rated stocks for each of its top themes for 2024.

According to the report, analysts see these 30 stocks’ 2024 sales growth being greater than the Russell 1000 (NYSEARCA:IWF) consensus, their upwards 2024 consensus sales revisions also above the Russell 1000 consensus, their price-to-earnings growth or enterprise value to EBITDA growth below the Russell 1000, and their 2024 consensus EBITDA or EPS growth above their expected sales growth.

From the list, eight stocks fall into the Russell Top 200 (RT200), 17 in the Russell mid-cap (IWP), four in the Russell 2000 (IWF), and one outside of the Russell 3000.

Also, the stocks are equally weighted, and their growth/value style exposure is relatively balanced, with a slight growth bias.

Theme: Artificial Intelligence

• Amazon.com (AMZN) - expected total return: 45%
• Alphabet (GOOGL) - expected total return: 12%
• Meta Platforms (META) - expected total return: 22%

Theme: Infrastructure and Fossil Fuels

• AECOM (ACM) - expected total return: 20%
• Edison International (EIX) - expected total return: 23%
• Chart Industries (GTLS) - expected total return: 54%
• Martin Marietta Materials (MLM) - expected total return: 6%
• NOV (NOV) - expected total return: 41%
• United Airlines Holdings (UAL) - expected total return: 75%

Theme: Experiential Commerce

• Carnival (CCL) - expected total return:36%
• DoorDash (DASH) - expected total return: 33%
• Uber Technologies (UBER) - expected total return: 30%

Theme: Digital Leisure

• GoDaddy (GDDY) - expected total return: 29%
• AppLovin (APP) - expected total return: 47%
• DraftKings (DKNG) - expected total return: 31%
• Roblox (RBLX) - expected total return: 20%
• Unity Software (U) - expected total return: 35%
• Wix.com (WIX) - expected total return: 20%

Theme: Internet-driven Business Models

• DocuSign (DOCU) - expected total return: 64%
• Equinix (EQIX) - expected total return: 14%
• HubSpot (HUBS) - expected total return: 30%
• Stride (LRN) - expected total return: 18%
• Q2 Holdings (QTWO) - expected total return: 4%
• Squarespace (SQSP) - expected total return: 30%
• Wayfair (W) - expected total return: 42%

Theme: Fin-tech

• Fiserv (FI) - expected total return: 14%
• Global Payments (GPN) - expected total return: 17%
• Mastercard (MA) - expected total return: 14%
• PayPal Holdings (PYPL) - expected total return: 44%
• SS&C Technologies (SSNC) - expected total return: 9%

More on iShares Russell 1000 Growth ETF:

• IWF: Price Isn't Everything; Favor Growth Over Value
• IWF ETF: Be Cautious Of High Valuations
• Top overweight stocks with high growth and low volume - MS
• Top overweight stocks with high free cash flow and EPS growth - MS
• Seeking Alpha’s Quant Rating on iShares Russell 1000 Growth ETF

Citi | Wealth outlook 2024 | North America: an emerging set of new opportunities

Here is the link. 

North America: an emerging set of new opportunities

Page 127

Considerations 

• Investors should consider tilting equity exposures toward small- and mid-sized companies (especially growth) and early cyclicals. These are places to potentially find growth amid an economic slowdown and capture market leadership shifts as the Fed eases. 

• We believe this is a moment to lock in current high yields with investmentgrade intermediate maturity bonds.

• Focus on beneficiaries of US-China polarization, including areas of tech and tech-enabled industrial stocks.

Seekingalpha.com | Citi’s 30 stocks for its 2024 top themes

Citi | Wealth outlook 2024 |

Here is the report. 

Page 20 

— After-inflation US Treasury yields of 2.5% are currently higher than 80% of all periods in the past 25 years.

 

The inversion of the US yield curve, even if less pronounced than before, remains an indicator of tight monetary policy. This can leave the economy more vulnerable to a shock, as was the case when the pandemic hit. Another supply shock that tips the economy into a broader recession can never be ruled out given geopolitical uncertainties. If a new, global shock were to materialize, monetary easing could be more profound than we expected, but it would be no immediate substitute for economic growth and profits. 

Assuming no imminent recession or major global supply shock, it seems likely that the Fed will ease monetary policy gradually in the coming few years. This should be consistent with 10-year US Treasury yields falling back somewhat, perhaps to 3.75% by year-end 2024. Investors should also understand that the long period of zero interest rates – and even negative yielding bonds – will go down in history as an outlier. We see this much like the mirror opposite period of “great monetary neglect,” which boosted inflation and yields throughout the 1970s.

 

 Investment strategy: both income and growth opportunities have been restored

The two pillars of investment returns – income and growth – have been reinvigorated. Yields in the US have risen toward two-decade highs ( FIGURE 10 ).

 With investment grade US corporate bond yields averaging 6% and inflation decelerating, it is quite possible to earn real returns of 4% across a diversified range of fixed income (please see Core portfolios could be ready to shine on page 34). At the same time, tight monetary policy has driven both bond and equity investors to focus predominantly on the largest and safest perceived corporate balance sheets. This has left numerous growth opportunities behind. The seven largest US technology-related shares have driven most of the return in global equities in 2023. We believe this is unlikely to be the case in 2024 and 2025.

Book | Scalability Rules | Book notes | Github:

Here is the link. 

This post is a note/headline for reading book Scalability Rules, so in the future I can look back to this rather than finding the book. If you find this interesting, go search Scalability Rules. Great book.

Before all of these below, please devote to the bible of scalable system CAP.

I. Reduce the equation

• 1. Don't overengineer the solution. Complex systems result in costly effort and maintenance, decompose complex requirements into smaller systems, and make them sharable and reusable.
• 2. Design scale into solution. Design to 20x capacity, implement for 3x capacity and deploy for ~1.5x capacity.
• 3. Simply the solution 3 times over(Pareto Principle). This falls into Rule(1), but remember simplification is not necessarily considered as always good.
• 4. Reduce DNS lookups.
• 5. Reduce objects where possible. Frontend stuff.
• 6. Use homogenous networks. Hardware.
• 7. Design to clone things(x-axis). Or horizontal scalability, essentially the duplication of services. This is the most important ideology in scalability I'd say.

    

II. Distribute the work

   

• For services, ensure it is logically simple(use standardized interface e.g. RESTful/RPC) and easy to clone, use a load balancer.
• For databases, normally used when Read >> Write. Master-Slave / Consistent Hashing etc. note ACID
• 8. Design to split different things(y-axis). Which I don't care much.
• 9. Design to split similar things(z-axis). ..Either.

III. Design to scale out horizontally

• 10. Design your solution to scale out, not just up.
• Scaling out means the replication of services.
• Scaling up means upgrading computing resources. This is really just a duplicate from Rule(7). meh.
• 11. Use commodity systems. Be cost-effective.
• 12. Scale out your data centers. This is more of a concern on availability and failover, so always prepare for multiple data centers. Models may vary.
• 13. Design to leverage the cloud. e.g store unimportant files in S3 (I will never save important data in S3).

IV. Use the right tools

• 14. Use databases appropriately.
• Use RDBMS for cross-table lookup. e.g. MySQL.
• Use NoSQL for simple R/W key-value queries. e.g. for great scalability, Cassandra; for great CRDT support, Riak; for lightweight, LevelDB. There are tons of options, the world of databases is heaven.
• 15. Don't abusively use firewalls, it makes the network slow. Put firewall only in the critical path.
• 16. It is never too less for logging. Use reliable and fast tools such as Maxwell for aggregation, and make it well rotated.

V. Don't duplicate your work

• 17. Don't check your work. I'd say avoid duplicated data validation, act upon failures.
• 18. Reduce redirecting traffic. This only applies for HTML level, per se. Traffic redirection is key in server configuration and load balancing, especially for inter-service traffic.
• 19. Alleviate temporal constraints.

VI. Use caching aggressively. Damn, I love it.

• 20. Leverage CDN.
• 21. Use Expires headers. HTML headers offer more than you could ever imagine.
• 22. Cache Ajax calls. Use Last-Modified, Cache-Control and Expires.
• 23. Leverage page caches. Reverse proxy
• 24. Utilize application caches. Cache whatever users mostly request, and find the best balance between performance and cost.
• 25. Make use of object caches(aka in-memory cache).
• 26. Put object caches on their own tier. Though I regrettably did this multiple times, caching should never be embedded with a critical path. i.e. whenever caching fails, requests should always be properly forwarded to the database. Generally, a caching service should sit between the API layer and the service layer(which operates database commands).

Linkedin.com | Mingtian Ni | Book reading: "Scalability Rules - 50 Principles For Scaling Web Sites"

 Power of expression -

I recently skimmed through a book titled "Scalability Rules - 50 Principles For Scaling Web Sites". The book doesn't propose many novel ideas that didn't exist before. However, I find the mental models for framing those principles are very powerful. For example, when talking about 'reducing the equation' in the first chapter, the book boils it down to three layers:
1) let our customers do less work - by simplying UX,
2) let our systems do less work - by optimize system performance,
3) let our engineers do less work - by simplify system design and improve maintainability.

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