How About a Dozen Wall Street-Loving Stocks for Valentine's Day?

This Valentine's Day, you might want to consider a dozen shares of Wall Street's best-loved stocks as the perfect gift for your loved one.

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Trade Algo is thinking about love on this annual day dedicated to expressing our deepest feelings to each other. As a result, we looked for stocks in the S&P 500SPX –0.58% that Wall Street simply can't get enough of. There was more to our filter than just popularity. In addition to this, we wanted to find stocks that had an attractive upside potential based on their target prices.

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We have offered a gift to our readers on numerous occasions, but this isn't the first time. A Valentine's Day screen has been run by Trade Algo in the past. It has been a mixed bag of results so far.

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The 2020 screen was a winner. There is another one that looks at stocks that have strong support from Wall Street, based on analyst ratings, and with at least a 10% upside implied by analysts' price target estimates. Among them were: Diamondback Energy (FANG), Norwegian Cruise Line (NCLH), health-insurance provider Centene (CNC), engineering firm Quanta Services (PWR), medical-device maker Boston Scientific (BSX), defense contractor L3Harris Technologies (LHX), health giant Cigna (CI), and Amazon.com AMZN –1.37%  (AMZN).

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It is estimated that those eight companies have grown by an average of 44% over the past three years. During the same period of time, the S&P 500 increased by about 22%. The winners of these contests were only able to outperform the market in three out of eight contests. In terms of performance, Diamond Back is up approximately 100%, while Quanta is up approximately 275%.

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There was a problem with the screen for 2022. One of the studies looked at only stocks with the highest analyst ratings and included: Signature Bank (ticker: SBNY), Amazon (again), Alphabet GOOGL –1.77% (GOOGL), Alexandria Real Estate Equities (ARE), and IQVIA Holdings (IQV), the company that conducts clinical research.

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It appears that all five of these stocks have fallen since Valentine's Day 2022, with an average loss of 28%. Over the same period of time, the S&P 500 has fallen about 6%.

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This year we are repeating the 2020 effort, looking for both analyst support and upside.

The 2023 dozen, in no particular order, are Disney DIS –0.25%  (DIS), pharmaceutical maker Bio-Rad Laboratories (BIO), natural gas company Targa Resources (TRGP), air carriers Delta Air Lines DAL +0.44%  (DAL) and Alaska Air (ALK), pet health firm Zoetis (ZTS), tech giants Alphabet and Amazon (again), energy services provider Halliburton (HAL), health care firms UnitedHealth (UNH and Humana (HUM) as well as engineering and construction company Jacobs Solutions (J).

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Ninety-one percent of the ratings for those stocks are Buy ratings. According to analysts, that's a very strong endorsement. It is estimated that about 58% of the stocks in the S&P 500 are rated as Buy by Wall Street analysts.

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In terms of Wall Street's average price target, the average upside for the dozen of companies is about 27%.

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There is a lot to like about this list. It would be great if someone could pass along the 12 ideas to someone they care about. It would cost almost $2,300 to buy a share of each of these companies.

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The average person spends far more than that on Valentine's Day, which is a tremendous amount of money. The National Retail Federation predicts that on Valentine's Day in 2023, the average American will spend just over $190 on the holiday, up from just over $175 in 2022, according to the organization.

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There will be approximately $26 billion spent on Valentine's Day in total this year. The most popular gift categories are candy, cards, and flowers. The options are solid, but stocks will last a lot longer than chocolate, so stocks are a better option.

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As with any investment process, a stock screen is just the beginning of the process, a starting point for narrowing down the list of investible stocks to a manageable number. As soon as the screen is complete, the task of learning about and valuing individual companies begins.

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