Markets tend to move in trends. Since bottoming out late last year, the trend has been higher, even with a few hiccups along the way like the drop in early August.
With stocks trending higher, last year’s big losers have gained more ground than average. That trend will likely continue as well. That’s good news for investors looking to catch up this year who may have missed out on the first part of the market rally.
The best-performing stock this year in the Dow has been Salesforce (CRM). The sales software management company has been performing strongly, and looks likely to continue, even though its overall growth may have slowed.
With shares up 40 percent over the past year, but earnings growth up over 600 percent, Salesforce looks undervalued relative to its recent operational performance. That could mean that shares will continue to lead the Dow higher in the months ahead.
Action to take: Investors may like shares at current prices. While near one-year highs, they’re still down about 30 percent from their 2021 peak, and will likely reach new all-time highs in the years ahead. At the moment, shares don’t pay a dividend.
For traders, play the current uptrend. The January 2024 $250 calls, last going for about $7.50, could see mid-to-high double-digit returns on a year-end rally for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.