Brianne Gardner’s Strategic Picks: VISA, Chevron, and CNR for August 2024

In an ever-changing market landscape, having expert guidance is crucial for making informed investment decisions. Brianne Gardner, Senior Wealth Manager at Velocity Investment Partners, Raymond James, has shared her top stock picks for August 19, 2024. Her focus on North American large-cap stocks like VISA, Chevron, and Canadian National Railway (CNR) provides a well-rounded approach to navigating the current financial environment. This article will explore why these stocks are top choices and how they fit into the broader market outlook.

Market Outlook

The recent 9% pullback in the S&P 500 Index might have caused concern among some investors. However, Gardner emphasizes that this is not unusual. In fact, it's the second significant drop this year, following a 6% decline in April. Such pullbacks are part of the natural ebb and flow of the market, especially when stocks have seen substantial gains over the previous year.

The "Magnificent Seven" stocks, known for their strong performance, experienced price drops ranging from 10% to 30%. This was expected, particularly for stocks that had seen their prices soar more than 50% higher than the previous year. Profit-taking in such scenarios is common and can lead to a temporary market correction.

Historically, August and September tend to be weaker months for the stock market, and Gardner anticipates that this trend may continue in 2024. However, this also represents an opportunity for investors to reassess their portfolios and make strategic adjustments.

Despite the recent volatility, Gardner remains optimistic about the market's outlook for the remainder of the year. She believes that the current bull market has more room to grow, potentially lasting another year or two. This optimism is supported by a strong earnings season, which has helped maintain high stock valuations.

Top Pick: VISA (V NYSE)

VISA, a global leader in financial technology, stands out as Gardner's top pick. With a market cap of over $500 billion, VISA is one of the largest companies worldwide. Despite a flat year-to-date performance, VISA has shown remarkable growth over the past five years, with a 45% increase.

VISA’s strong financial performance is evident in its third-quarter results, where the company reported a 10% year-over-year revenue growth. A key driver of this success has been the increase in cross-border transactions, which grew by 14% year-over-year. This growth underscores VISA’s ability to capitalize on global financial activity, a critical factor in its continued success.

VISA has also demonstrated a commitment to returning value to its shareholders, with $5.8 billion in stock buybacks and dividend distributions in the recent quarter. Gardner believes that VISA is well-positioned for further growth, with a target price of $300, representing a potential 12.5% upside.

Top Pick: Chevron (CVX NYSE)

Chevron, one of the world’s largest energy companies, is another of Gardner's top picks. The company has a strong presence in both traditional and renewable energy sectors. While Chevron’s stock has remained relatively stable over the past year, Gardner sees this as a buying opportunity.

Chevron has committed $10 billion to clean energy projects by 2028, reflecting its shift towards more sustainable energy sources. This investment positions Chevron as a leader in the transition to cleaner energy, aligning with global trends towards sustainability.

In addition to its clean energy initiatives, Chevron offers a robust dividend yield of over 4%, making it an attractive choice for income-focused investors. The company’s recent acquisition of a majority stake in the world’s largest proposed hydrogen storage facility highlights its commitment to expanding its presence in the hydrogen market. Gardner believes that Chevron’s stock has a potential upside of 20%, with a target price of $178.

Top Pick: Canadian National Railway (CNR TSX)

Canadian National Railway (CNR) is Gardner's third top pick. Known for its recession-resistant business model, CNR has proven to be a strong performer even in uncertain economic times. The company’s stock recently experienced a 10% price drop, which Gardner views as an opportunity for investors to either average down or add to their positions.

CNR’s strong free cash flow and operating margins set it apart from its competitors. Despite facing economic challenges, CNR’s earnings grew by 15% last year, demonstrating the company’s resilience and ability to navigate tough conditions. Gardner expects CNR to continue delivering solid earnings growth, with a target price of $180, representing a 16% potential upside.

Conclusion

Brianne Gardner’s top picks for August 19, 2024—VISA, Chevron, and Canadian National Railway—offer a diversified approach to navigating the current market. Each of these stocks has strong fundamentals, growth potential, and resilience in the face of economic challenges. As the market continues to evolve, Gardner’s picks provide a balanced mix of stability, income, and growth opportunities.