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These stocks already burst but still have a long way to go

Logo of Disney

Key Points

  • Picking the right stocks today is more critical than ever, as the VIX falls with no momentum.
  • This short list of winners brings you bullish momentum and sustainable upside. 
  • Analysts are all over the bright future these businesses promise. 
  • 5 stocks we like better than T-Mobile US

When the VIX falls below 15%, it's time to cut the games and get serious. Opportunities become scarce without volatility, so you must employ extra scrutiny to pick the right stocks to invest in. Luckily, this also means that Wall Street is on vacation, leaving many good deals on the table.

Today, it is important to find stocks with good momentum (upside, hopefully) and ones with a lot left on the tank backed by analysts' bullish views and representative of a sector outlier. 

Surprisingly, names like The Walt Disney Company NYSE: DIST-Mobile US Inc. NASDAQ: TMUS and Li Auto Inc. NASDAQ: LI have fallen out of favor. However, today's trends have proven to carry their respective industries forward.

Decoding markets

When trying to understand where the market's sentiment toward a stock or industry is, you can go right by starting with price action. An excellent first step is to compare a stock's price today and compare it with its 52-week high to gauge bullish versus bearish momentum.


Disney is a beast of its own, with an unbeatable moat that cannot be compared to other businesses so that you can knock this one out quicker than the other two. Regarding price action, Disney stock has crossed above 80% of its 52-week high, an official bull market.

Not only is price action on Disney's side, but analysts still see a price target of $112.20 a share, implying a net 17.5% upside from today's prices.

However, the company still has a long way to go to return to its historical profit margins, so if your gut tells you this target should be higher, then you're right.

Earnings projections reflect a net bump of 24.7%, and the way the market has been bidding the stock, an EPS beat is a sure thing. Considering the stock trades at prices not seen since 2015, the ceiling keeps increasing, especially with the long-awaited return of dividend payouts.

Clear as day 

Markets did not try to hide their excitement around T-Mobile and Li Auto, as their price action and valuations are all over like a "tell" at the poker table. In the automotive sector, namely foreign manufacturers, Li Auto carries the price action crown.

While the industry trades at an average of 77.7% of its 52-week high, Li is 85%, way above peers and representing a bull market. The industry's valuation metrics, particularly its P/E ratio, sit at an average of 5.6x. 

Li's P/E? Try 43.9x.

Why are markets willingly paying a 682% premium to the industry's average P/E? The answer is in the earnings growth. Analysts expect EPS to shoot up by 90.1% in the next twelve months, while the industry should grow at an average of 7.3%.

Like any other product or service, you will be asked to pay a premium price for superior quality. Stocks work the same way, within reason, so markets will gladly pay a premium price for an analyst price target of $70.4, 75% above today's price!

What's impressive is to notice how similar of a situation T-Mobile sits in. Trading at 97% of its 52-week high, this stock is playing around with making new all-time highs, for good reason.

The national wireless industry is expected to grow EPS by an average of 2.2%; T-Mobile analysts are shooting for a massive 38.7%, leaving all other competitors in the dust.

For this reason, the market is willing to pay a P/E of 21.0x for T-Mobile stock, which is 264% higher than the industry's average 7.9x P/E. It should be no wonder that analysts are expecting a net upside of 21.4%.

While Disney is the easy choice in its standalone industry, Li and T-Mobile are other easy wins in case your portfolio needs a bit of exposure to the automotive or wireless industry. Either way, a mix or a match are all worthy additions to your holiday watchlist.

Should you invest $1,000 in T-Mobile US right now?

Before you consider T-Mobile US, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and T-Mobile US wasn't on the list.

While T-Mobile US currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Walt Disney (DIS)
4.7085 of 5 stars
$103.28+0.0%0.29%112.26Moderate Buy$126.58
Li Auto (LI)
4.1126 of 5 stars
$22.42-9.9%N/A14.46Moderate Buy$45.36
T-Mobile US (TMUS)
4.9597 of 5 stars
$163.89-0.1%1.59%22.30Buy$186.33
Compare These Stocks  Add These Stocks to My Watchlist 

Gabriel Osorio-Mazilli

About Gabriel Osorio-Mazilli

  • gosoriomazzilli@gmail.com

Contributing Author

Value Stocks, Asian Markets, Macro Economics

Experience

Gabriel Osorio-Mazilli has been a contributing writer for MarketBeat since 2023.

Areas of Expertise

Value investing, long/short trading, options, emerging markets

Education

CFA Level I candidate; Goldman Sachs corporate training; independent courses

Past Experience

Analyst at Goldman Sachs, associate at Citigroup, senior financial analyst in real estate


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