Catalyst calendar: Here's a look at major events that could propel these 7 stocks higher

Published Thu, Jun 20 20241:02 PM EDT

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

On Wall Street lately, it has seemingly been all artificial intelligence, all the time. That's pushed tech heavyweights and Club names such as Apple , Nvidia , Microsoft and Broadcom higher and the S & P 500 to record highs along with them. That's also left large swaths of the market in the dust. The market-cap weighted S & P 500, which we report on all time, has gained more than 4% since May 30. But, a version of the index that assigns each company the same influence, known as the S & P 500 Equal-Weight , has advanced only around 1%. The divergence helps explain why our trusted momentum indicator, the S & P Short Range Oscillator , has been closer to oversold territory than overbought during the run higher. No matter how you slice it, the participation in the rally has been limited in scope, though it improved in the first two sessions of this week. .SPX .SPXEW 1M mountain S & P 500 market-cap weighted vs S & P 500 equal-weighted We've taken a hard look at our portfolio throughout this period of concentration, booking profits in AI winner Broadcom on Tuesday to ensure we didn't give back gains in a stock that's doubled since we bought it in August 2023. We deployed some of that cash into our newest holding Dover . This industrial stock stands to benefit as a second-order AI pick on the data center infrastructure investment cycle. With the fork in the market still in place, we wanted to shine a light on Club stocks outside the large-cap tech winners' circle, which have potential upside catalysts playing out now and in the future. The following is not intended to be an exhaustive list but a high-level look at key events to watch across the portfolio. This month Best Buy: The launch of artificial intelligence personal computers Microsof t's new lineup of AI-infused PCs hit Best Buy stores this week – allowing the electronics retailer to start ringing up sales of the products after preorders exceeded expectations. This is a big step forward in our broader Best Buy thesis, which has been echoed by a couple of Wall Street analysts in recent weeks . Morgan Stanley and Wells Fargo: Results from 2024 stress tests The results of the Federal Reserve's annual stress tests are due out later this month, which could clear the way for the Club's two financial holdings to adjust their dividend and buyback programs. Banks typically wait a few days before announcing those updates. After performing well on last year's stress tests, which were disclosed on June 28, 2023, Wells Fargo and Morgan Stanley upped their quarterly dividend payouts by nearly 17% and 10%, respectively. This summer Abbott Laboratories: Baby formula trial and product launch Next month, Abbott Labs is set to head to court in Missouri over allegations that it failed to properly disclose the risks its baby formula presented to developing a serious intestinal disease in premature newborns. Abbott has denied the allegations and said its product has the support of the medical community. Still, the company faces hundreds of lawsuits across the U.S. However, the decision in the upcoming Missouri trial has been identified by Mizuho Securities analysts as a possible clearing event that could shift sentiment on the stock back in Abbott's favor. We've been building our position in Abbott in recent months, believing the billions in lost stock market value exceeds the possible payouts the company may have to make to plaintiffs. Another catalyst on the horizon is the U.S. launch of Abbott's over-the-counter glucose monitor Lingo. U.S. health regulators cleared Lingo on June 10 . The product, which is geared toward a health-conscious consumer who doesn't have diabetes, went on sale in the U.K. earlier this year. Abbott executives have been upbeat on Lingo in the past, viewing it as a key growth driver for the company. Later this year Stanley Black & Decker: Fed rate cuts While a number of portfolio holdings stand to benefit from a potential Federal Reserve interest rate cut this year, there is arguably no company with more to gain than Stanley Black & Decker . Lower interest rates will make it more affordable to build homes, spurring demand from the toolmaker's professional customers. At the same time, lower mortgage rates can spark the existing home market, too, which should drive demand from do-it-yourself customers who are trying to fix up their house before listing it, or buyers who make improvements upon moving in. Craftsman, DeWalt and namesake Black & Decker products may be required in both scenarios. Right now, the market expects the Fed to cut rates by a quarter percentage point in September. The Fed's current target range between 5.25% and 5.5% is the highest in more than two decades. Longer term DuPont: Breakup plan DuPont 's three-way breakup plan announced in May is expected to take between 18 and 24 months to be completed. In other words, the shareholder value we expect to be created isn't going to happen overnight. But it is possible that DuPont — led by now-Executive Chairman Ed Breen and CEO Lori Koch — can find a way to tap into that trapped value sooner than the previously stated breakup timeline. For example, that could include a sale of a business unit instead of spinning it off, such as its water operations. Honeywell: Potential for transformation Honeywell 's spot on this catalyst calendar is a bit higher level than the others, but we still felt it was worth including due to our expectation that CEO Vimal Kapur will shake up the industrial conglomerate's portfolio. Indeed, Jim Cramer has been urging the company's top boss, who took over from Darius Adamczyk last year, to make some major moves. This could include more transformative acquisitions along with divestitures of sluggish units that turn Honeywell into a more streamlined organization with clear growth priorities. In general, we like Honeywell's announcement Thursday that it is buying CAES Systems for $1.9 billion because it bolsters its aerospace and defense business, which is the crown jewel of its sprawling portfolio. However, we still want them to shed more of their non-core, slower-growing units, which would benefit Honeywell shareholders over the long term. Recent years haven't been so kind to them, with the stock underperforming the S & P 500 considerably over the past three years. To be sure, Honeywell shares have found some traction lately, hitting a fresh 52-week high in Tuesday's session. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) 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A trader works during the closing bell at the New York Stock Exchange (NYSE) on March 17, 2020 at Wall Street in New York City.

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