{"id":72179,"date":"2024-07-23T08:00:13","date_gmt":"2024-07-23T08:00:13","guid":{"rendered":"http:\/\/guid_108009464"},"modified":"2024-07-23T08:00:13","modified_gmt":"2024-07-23T08:00:13","slug":"avoid-the-magnificent-7-and-buy-these-lesser-known-stocks-instead-wealth-manager-says","status":"publish","type":"post","link":"https:\/\/wp.timesamerica.net\/avoid-the-magnificent-7-and-buy-these-lesser-known-stocks-instead-wealth-manager-says\/","title":{"rendered":"Avoid the &#8216;Magnificent 7&#8217; and buy these lesser-known stocks instead, wealth manager says"},"content":{"rendered":"\n<div><img decoding=\"async\" src=\"https:\/\/wp.timesamerica.net\/wp-content\/uploads\/2024\/07\/avoid-the-magnificent-7-and-buy-these-lesser-known-stocks-instead-wealth-manager-says.jpg\" class=\"ff-og-image-inserted\"><\/div>\n<p><span hidden aria-hidden=\"true\" class=\"ArticleBody-extraData\"><span hidden aria-hidden=\"true\" class=\"ArticleBody-extraData\"><span hidden aria-hidden=\"true\" class=\"xyz-data\">The so-called &#8220;Magnificent Seven&#8221; were among the hottest stocks last year, but one wealth manager says they are &#8220;wildly overvalued&#8221; and has his sights elsewhere. &#8220;There is a possibility that the Magnificent Seven will continue to grow and generate positive returns for investors in the next decade, but I don&#8217;t think that&#8217;s the case with all the companies,&#8221; Tariq Dennison, co-founder and investment advisor at GFM Asset Management, told CNBC Pro on July 19. The Magnificent Seven comprises Alphabet , Amazon , Apple , Meta Platforms , Microsoft , Nvidia and Tesla , which continue to be in the spotlight thanks to the buzz around artificial intelligence. &#8220;I think the recent relative outperformance of the Magnificent Seven has largely been due to institutional flows into large caps, which drives a cycle of upward momentum,&#8221; Dennison said, adding that several are &#8220;priced at ridiculous valuations.&#8221; He said he&#8217;s now betting on lesser-known companies in &#8220;corners of the market that are harder to reach.&#8221; How to play U.S. small-caps In the U.S., investors have been favoring small-cap names after the Russell 2000 index made significant gains last week before tapering off. The&nbsp;benchmark is now up 8.5% year-to-date. For comparison, the S &amp; P 500 is 15.4% higher, while the Nasdaq 100 has gained 24.4%. Dennison said he is playing small-cap stocks through exchange-traded funds such as the DFA Dimensional US Small Cap Value ETF and Avantis U.S. Small Cap Value ETF. &#8220;These ETFs will be my starting point &#8211; and I would look at companies within these ETFs for single names,&#8221; he said. DFA&#8217;s top holdings include Abercrombie &amp; Fitch , Cadence Bank and Commercial Metals . And Avantis&#8217; top holdings include KB Home , Jackson Financial and Warrior Met Coal . &#8216;Shoppers&#8217; paradise&#8217; Elsewhere, the wealth manager said he is watching markets that have fallen out of favor, such as China. Although China&#8217;s weight in the MSCI All Country World Index stands at just 2.5%, Dennison is overweight on the market as it&#8217;s &#8220;so cheap and has more upside than downside.&#8221; One way he is playing the market is through Hong Kong-listed stocks, which he says, are &#8220;trading at very cheap valuations.&#8221; &#8220;Hong Kong is a shoppers&#8217; paradise and there are several good names there,&#8221; he said, naming jewelry chain Chow Tai Fook , public transport operator and property developer MTR Corp and tech giant Tencent as his &#8220;three top holdings&#8221; there. Tencent has been making headlines recently, with several analysts being bullish , including Goldman Sachs , which included the stock in its conviction list. All three stocks also trade as&nbsp;American Depositary Receipts&nbsp;(ADR). Other global stocks Global stocks Dennison is betting on include Fresenius Medical Care , a German health-care company, and Kazatomprom, a Kazakhstan-headquartered producer of uranium. &#8220;I have been accumulating shares in both companies for a while,&#8221; said the wealth manager, who has just under $100 million in assets under management. &#8220;Kazatomprom was a name we bought a lot of previously when it was cheap. It is no longer so cheap but I still find it a good and special company,&#8221; he said, adding that he will probably not buy it &#8220;as aggressively&#8221; right now. Kazatomprom has a dual listing on the Kazakhstan and London Stock Exchanges and trades as an ADR in the U.S. Swiss food and drink conglomerate Nestle is also on Dennison&#8217;s radar. &#8220;It is a top position in many pension portfolios and has become a value stock because of the strong Swiss Franc,&#8221; he said. Value stocks are often cheaper than so-called growth stocks and typically trade at a lower price than what the company&#8217;s performance indicates. Dennison added that he will continue to accumulate Nestle as long as its average share price remains under 100 Swiss francs ($112.48) a share. Shares in Nestle are traded on the Six Swiss Exchange and as an ADR in the U.S. Year-to-date its shares down some 3.1% to 94.50 Swiss francs a share. According to FactSet data, of 22 analysts covering the stock, 12 give it a buy or overweight rating, eight have a hold rating and two have a sell call. The average price target on the shares is 106.15 Swiss francs, which implies a 12.3% upside.<\/span><\/span><\/span><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"><\/span> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The so-called &#8220;Magnificent Seven&#8221; were among the hottest stocks last year, but one wealth manager says they are &#8220;wildly overvalued&#8221; and has his sights elsewhere. &#8220;There is a possibility that the Magnificent Seven will continue to grow and generate positive returns for investors in the next decade, but I don&#8217;t think that&#8217;s the case with &hellip;<\/p>\n","protected":false},"author":1,"featured_media":72180,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-72179","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bussiness","has-thumb","has-featured"],"_links":{"self":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/posts\/72179"}],"collection":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/comments?post=72179"}],"version-history":[{"count":0,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/posts\/72179\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/media\/72180"}],"wp:attachment":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/media?parent=72179"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/categories?post=72179"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/tags?post=72179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}