Investment trends often hinge on robust financial performance, and Berkshire Hathaway stands as a prime example of this phenomenon. According to Ari Wald, head of technical analysis at Oppenheimer, the company is poised for new highs in the near future, particularly following a compelling earnings report. The conglomerate’s fourth-quarter earnings demonstrated a striking surge, with a staggering 71% increase to $14.5 billion in operating profit. Such impressive figures are significant enough to propel both its class A and class B shares upwards by approximately 4% following the announcement.
For many investors, class A shares—priced above $747,000—are out of reach. However, Wald’s focus on class B shares, trading around $500, presents a more accessible investment option. His recommendations for investors center on seizing this upward momentum, especially highlighted by the recent breakout above the stock’s September peak of $485. This technical movement signals a re-establishment of the stock’s long-term uptrend, marking a critical juncture for potential investors to consider.
In stark contrast to Berkshire Hathaway’s bright outlook, Domino’s Pizza is currently facing headwinds. The company recently reported earnings that missed expectations, resulting in a 1.5% decline in stock prices. Wald does not view this dip as a buying opportunity, pointing out the stock’s struggle to outperform the market. He noted that Domino’s average stock valuation has oscillated around its 200-day moving average since July 2022, indicating a lack of sustainable upward momentum.
Wald’s evaluation reveals that, compared to the market, Domino’s has been forming lower highs, particularly since 2020. Investors looking for stronger alternatives might find Darden Restaurants, the parent company of Olive Garden, a more favorable choice. Darden has demonstrated a solid 4.4% gain this year, contrasting with Domino’s more modest performance, which has seen an 8.6% increase, showing signs of fatigue relative to its broader competitors.
Another key player in the market is Constellation Energy, which has drawn considerable attention due to its high momentum. Wald listed it among his preferred large-cap stocks, indicating that it remains in his buy list despite some recent volatility triggered by the tech sector’s downturn. His commentary wisely advocates maintaining a strong portfolio position while allowing profitable investments to grow.
However, the swirling uncertainty has led him to take a more cautious stance regarding new investments in Constellation Energy. He emphasizes the need for patience, particularly in light of heightened market volatility and unfavorable trading conditions. A critical factor in this evaluation is the stock’s ability to maintain its 200-day moving average, currently set at $235. As of now, the stock has recorded a commendable 20% increase year-to-date, building upon an extraordinary 91% surge in 2024. Investors would do well to watch for any indication that this volatile phase might shift.
The current landscape presents a mixed bag for investors. While companies like Berkshire Hathaway signal robust growth patterns backed by strong earnings, others, such as Domino’s Pizza, face a steeper uphill battle in regaining momentum. Constellation Energy remains an interesting case of a high-potential stock navigating the treacherous waters of market volatility, where patience and strategic timing will be essential for investors looking to capitalize on upward trends.
For anyone considering their investment strategy, this analysis underscores the importance of diligent research and ongoing monitoring of market trends. By being informed and making thoughtful, evidence-based decisions, investors can better position themselves to realize gains, whether through aggressive positions in high-performing stocks or more cautious investments in the face of uncertainty. As always, the call for due diligence remains paramount in an ever-changing investment landscape.