Despite Rocky Markets, These Stocks Will Likely Rally

Investors are taking a risk-off stance following Silicon Valley Bank's collapse and inflation fears returning.

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It was a bad day for stocks, with the Dow Jones Industrial Average declining for the fifth consecutive day, as the 2-year Treasury yield fell.

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In a similar vein, the Cboe Volatility Index (VIX), Wall Street's preferred fear gauge, reached a level that hasn't been seen since late 2022 on Monday and is fast approaching territory that is considered extremely risky.

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Some strategists have declared it to be the beginning of the next leg of the bear market. Morgan Stanley's Mike Wilson is one of those analysts who has predicted this.

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• Ferrari

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• HSBC Holdings

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• Seven & I Holdings

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• UnitedHealth Group

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• W. R. Berkley Corporation

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• Fairfax Financial Holdings

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• Hershey Company

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• Nissin Foods Holdings

• Novo Nordisk

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• Tokyo Gas

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• Lamb Weston Holdings

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• Monster Beverage Corporation

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• Keppel Corporation

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It was Fairfax Financial Holdings, one of the world's largest financial services firms, along with Tokyo Gas, a Japanese natural gas company, which received some of the highest expected earnings growth of this year - about 150% in each case.

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In addition to HSBC, another British bank made the list, with nearly 50% expected earnings growth, and with an average upside of 23%. In an effort to become more competitive in the U.K., HSBC acquired the Silicon Valley Bank subsidiary this week, resulting in a decline in its share price. According to Trade Algo, approximately 46% of the analysts covering the stock give it a buy rating.

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Among the screen, manufacturers are Ferrari, the Italian luxury sports car maker with a 20 percent earnings growth forecast and an outlook of around 20 percent growth. There have been recent indications that Morgan Stanley has decided to replace Tesla as the company's top pick with Ferrari. The analysts at Adam Jonas have increased Ferrari’s price target by $30 to $310, which implies that over the next year, the stock is likely to rally 28%, according to their estimates. 

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Several other stocks showing up on the Trade Algo list included pharmaceutical and healthcare stocks, consumer stocks, as well as technology stocks. There are some well-known pharmaceutical companies on this list, including Danish firm Novo Nordisk, UnitedHealth from the U.S., and U.S. chocolate maker Hershey.

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A high potential upside of more than 50% was among the biggest reasons why Singapore's infrastructure conglomerate Keppel stood out from the crowd.