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topicnews · October 24, 2024

Hedge funds support biotech market leaders with record sales growth

Hedge funds support biotech market leaders with record sales growth

We recently published a list The 10 Best Falling Stocks to Buy According to Hedge Funds. In this article, we’ll take a look at where BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) stands compared to other top falling stocks according to hedge funds.

Analysts at Goldman Sachs published a note on Oct. 21 predicting that the S&P 500’s average annual return could fall to just 3% in the next decade, down from 13% over the past decade. Goldman Sachs estimates are well below Wall Street estimates, as Wall Street analysts expect the index to perform between 4.4% and 7.4%, with an average of 6%.

Goldman Sachs analysts based their forecast on concerns that market concentration in the S&P 500 has reached a record high in its 100-year history. You mentioned that the ten largest stocks in the index currently make up more than 36% of the overall index. These top 10 index constituents have grown in size due to exceptional earnings growth over the past two years. The Magnificent Seven alone at least doubled their profits in the first quarter of the 2024 financial year year-on-year.

However, the company’s analysts believe that historical evidence shows that it is extremely difficult for companies to maintain high sales growth and profit margins for more than a decade. They also noted that the Magnificent Seven’s sales growth is already starting to decline due to the accelerated pace of growth over the past two years.

On the bright side, analysts point out that growth is expected to pick up among the remaining stocks in the index. For these remaining 493 stocks, they expect double-digit earnings growth over the next five quarters.

Also Read: 10 Best Downed Stocks to Buy by 2025 and 8 Best Small Cap Growth Stocks to Buy According to Analysts.

Sylvia Jablonski, CEO and CIO of Defiance ETFs, joined CNBC for an interview on October 22 to discuss earnings season progress and also shared her perspective on Goldman Sachs’ recent announcement. She pointed out that about 14% of S&P 500 companies reported earnings and that 79% of them beat expectations. She believes this is a solid start to earnings season. Jablonski also mentioned that the bar has also been lowered for some companies. For example, in July, analysts were talking about 6-7% year-on-year growth, and now we’re looking at about 5% growth, and companies have largely achieved it.

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