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Daniel Snyder: Welcome, everyone. I’m Daniel Snyder from Seeking Alpha. Thank you so much for tuning in from all over the world. I know some of you have been in here in the chat already tuning in from Dubai, South America, Japan. I see you. We are so thankful that you’ve taken the time today to hang out with us no matter the time zone, because this is our fourth annual top stocks event here at Seeking Alpha. And I know many of you are coming back for the fourth year, so thank you so much for being with us from the very start. This has been a blast to put on every year, and it’s a great way to just start the year with fresh ideas from none other than Seeking Alpha’s VP of Quantitative Strategy, Steven Cress.

Now, before we jump into conversation with Steve today and go through these 10 picks, we do have to get a quick legal disclaimer out of the way, so stick with me for just a second.

We are not advising you personally concerning the nature, potential, value, or suitability of any particular security. You alone are solely responsible for determining whether any investment, security, strategy, or any product or service is appropriate or suitable for you based on your investment objectives and personal and financial situation.

This presentation is for information purposes only. Content is presented as of the date published or indicated and may be superseded by future events. It represents my opinions and Steven Cress’ opinions, which may not reflect the views of Seeking Alpha as a whole.

Past performance is no guarantee of future results, and Seeking Alpha is not a licensed securities dealer, broker, US investment adviser, or investment bank.

And now with that out of the way, some of you may know who he is, but for those of you that do not know who Steven Cress is, he is a good friend of mine that I can say. We’ve been working together for years on years here now. We do webinars all the time here on Seeking Alpha. If you caught any of those, you know exactly what I’m talking about. But Steven Cress has a long history in the financial industry from spending a stint at Morgan Stanley, running a prop trading firm, as well as building fintech, his own fintech empire, really, which Seeking Alpha later acquired and integrated his Quant system here into Seeking Alpha’s platform, which I’m sure all of you are very familiar with. And if you’re not, we’re going to dive a little bit deeper into that today, maybe try to bring some light to some of the information that you need to hear about that. So, if you have any questions, make sure you’re dropping them in the chat. We have our team in the back here monitoring that, and we’ll try to get into a nice Q&A section for you here at the end of today’s event. So, if you have any questions about the product, about Seeking Alpha Premium, about the Quant system, Dividend Grades, anything like that, make sure you drop those there.

Now, with that out of the way, Steve Cress, I want to say, first off, Happy New Year. Thank you for taking the time to do this once again. I know there’s a lot of people here that are giving you your flowers for last year’s returns. I mean, 2025 turned out to be an incredible year for your 10 picks. I mean, from all across the board, I know we’re very, very excited to hear what’s going on with this year. You’re going to walk us through the macro environment and everything else, but before we dive into that, give a little quick disclaimer. Steve is a little bit under the weather, everybody, but we’re going to push through today. So, we really do appreciate you coming and bringing the energy today, Steve. So, Steve, how are doing? How’s the New Year starting off?

Steven Cress: Daniel, I’m doing well. And as always, thank you for organizing this and the many other individuals at Seeking Alpha and the financial content team, the Quant team, the marketing team, the product team. A lot of hands go behind this webinar and truly appreciate everyone’s effort and the organization. I do have a little bit of a winter cold, the back of taking some holiday where I was skiing in New York, had a great time, so well worth the cold.

DS: Sounds a rough life, Steve.

SC: It was a rough two-week period. We work hard and we party hard, but we achieved good results. As you well know from our track record, this is one of my favorite presentations of the year doing the Top 10 Stocks. We’ve had incredible performance for 2022, 2023, 2024, 2025, and hopefully, we’re going to pick some great stocks this year as well.

So, a little bit about what we’re going to do today, Daniel. We’re going to cover the state of the financial markets from 2025 to add a little context and how that impacted our pick from 2025. And in order to segue into this year, we want to have a good understanding of where we were. We’re going to go over why Quant, and obviously, we’re going to get into the Top 10 stocks for 2026. And a little bit of, after this month, how you can continue to pick good stocks in February, March, April, May, and June, because there is more than just the Top 10 for January.

So, we’re going to launch into our 2025 market recap, and it was a very volatile year. We finished strongly. It seemed when we went back to January 2025, it was going to be a pretty good year, but that weekly turn, at the end of the day, though, when we look at it and we close the performance, our risk on sectors did well. Technology stocks were up 25%. Communication services were up 22%. And then on the other end of the spectrum, consumer staples, which is the go to defensive sector and safe haven sector, actually finished in the red. Real estate and energy, fairly flat. Energy being up about almost 5%, but not too bad, but not nearly as good as some of the top performing sectors, but it was a volatile year.

Once we got into February through April, we actually went into a pretty massive correction. And my Top Stocks from 2025, which started off with great performance in the first two weeks, quickly turned. And I think at one point in April, the Top Stocks for 2025 were down more than 20%. And then, of course, came roaring back to finish up close to 45%.

I think something else that was interesting about this year, even with the risk on sectors doing well, we had gold reach historic highs. And, typically, gold will do well. It’s a safe haven area. So when markets are correcting and we did have that phase, but we’ve really been building momentum over a period of years. For gold, there was the financial crisis. There was COVID. There were trade wars, and of course, central banks all over the world have been buying gold, and that’s helped to bring it to its record highs.

So, a little bit about the AI frenzy as well because that was a big part of 2024 and 2025. And we got to a point in 2025, really closer to the beginning of the fourth quarter where people thought basically all the good news was priced in. Our Mag 7 stocks, which are very AI driven now, they trade at a huge P/E Premium. The Forward P/E is about 31x versus the S&P. If you strip out the Mag 7, we refer to it as the S&P 493. The multiple is only 22x, which seems a lot more realistic than the S&P with the Mag 7 stocks.

The Mag 7 stocks continue to be top-heavy for the overall index. It’s about, those seven stocks are about 35% of the total market cap of the S&P 500. But these companies have been spending a tremendous amount of money on AI. Hyperscalers are committing enormous CapEx to AI infrastructure with more investors asking whether the current projects are actually generating enough return to justify those costs. And if you look at the chart on the right side, you could see the huge amount of CapEx. The CapEx share of operating cash flow for hyperscalers hitting 60%. So, if you go back to say 2012, it was below 20%. So, an absolutely huge increase, and that would be Amazon, Google, Microsoft, Meta, Oracle as the hyperscalers that are putting so much capital into AI.

So, the big question, and the big fear, had these stocks hit their high that were within the direct or indirect AI hemisphere? And, a lot of those fears were answered as we got into earnings for the third quarter. Nvidia had very strong earnings. They were one of the initial stocks to really benefit from AI. Oddly, definitely, the stock sold off on the good news, but investors really figured out many other of these companies that are directly or indirectly related to AI also had good earnings. So, the market actually quickly rebounded on that. And you’re going to see a central theme from the stocks that we had from 2025 and even the stocks going to 2026. Even with the diversification in sectors, there still seems to be an AI theme running through most of these stocks.

So, as I mentioned, it was a really volatile year. And I think sometime around the end of January, we had what was referred to as the DeepSeek Shock, and that was a Chinese company claiming that they could do AI at a much more efficient rate. And many investors were thinking, okay, maybe not as much CapEx has to be going into these AI companies and the data centers even the utility companies that provide the power for the data centers. So that kicked off the potential concept that many of the AI and technology stocks were overvalued. And on January 27, we saw Nvidia drop by about 17%. We saw the semiconductor index drop by 9.2%, and even the Nasdaq down by 3%, and the S&P 500 down by 1.5%. And we continue to see the markets take a pretty hard hit.

The S&P at one point between February and April was actually down 15%. And as I mentioned, those Top Stocks of 2025, they were down more than 20% on average. But, of course, if you look after January 28, we saw a rebound in the stocks and the sectors. So, 2025 was really defined by whipsawing where we saw extreme fear and extreme greed. Chip stocks were hit hard, as I mentioned, during the AI rout, and tariffs early in the year really roiled markets as well. There was a tremendous amount of uncertainty. Historically, economists and market strategists know that tariffs are not good for markets, and we saw the – really, some of the highest tariffs ever announced. But, of course, the way that it was done and, really the White House was leading with a bit of jawboning and deal making as opposed to setting concrete tariff levels and keeping it there.

We saw a lot of retraction on tariffs and coming up with levels that were much lower than expected. And by the time we got to, I think, that Liberation Day, especially where there’s agreement with China on a flat tariff rate, things really started to rebound. But all-in-all, there was a lot of uncertainty from the end of January really through to the beginning of May.

I’d say something consistently that did help the market despite the tariffs, despite the extended stocks on AI, and fears surrounding the overall market, corporate earnings were pretty strong throughout the year, and a lot of innovation from AI and their strong corporate earnings helped to provide some fundamental support to the market. So, as we’re coming into 2026, I would not be surprised if we continue to see a seesaw of anxiety, but we also see strong fundamentals, and that could foster some volatility in 2026.

As I said, we had Liberation Day, which was April 2. So, key aspect of the volatility for the markets really were tariff related early in the year. Tariffs and trade tensions led to the biggest two-day global sell-off since March 2020 COVID crash. So, it had a huge impact. There were rapidly shifting trade policies and ongoing U.S. China tariff disputes, which led nations to gauge in tit-for-tat tariffs during that period.

The escalating trade disputes led to targeted hikes on EVs, batteries, chips, and other strategic sectors, and even went through to Q4 2025 where new tariffs injected more volatility into the market around the October and November time frame. The Nasdaq actually briefly entered bear market territory with the S&P declining nearly 20%. And I recall it being at 15%, but in fact, it was about 20%. And as I said, those Top 10 Stocks really took it on the nose. And if you’re a member of Alpha Picks, they really took it on the nose too. That decline during that period far exceeded the market. But of course, when the market returns to fundamentals away from sentiment and fear, stocks with strong fundamentals really rally strongly and our Top 10 proved that, and our Alpha Picks proved that as well too.

So, this is something I want to highlight. Corrections do happen. Not sure if we’re going to have a correction again this year, but certainly we did have a correction last year. And this is really important to highlight. Fear creates losses. If you panic during those corrections and you sell, you will lose money. However, conviction creates opportunity, and the conviction lies in stocks with good fundamentals. So, it’s important to – you’ll hear the talking heads during market corrections. Fear will be abound in the market. Sector rotations will occur to safe haven sectors, to cash, to gold. That is fear driven. But stocks with good fundamentals, those stocks will get clobbered during those periods, but their earnings and their revenues tend to stay stable. And that’s a perfect opportunity to really identify stocks that have tremendous potential when you see that they’re coming through with their earnings and their revenues. You just have to ignore what’s driving markets down.

And I use a couple of quotes here. Panic selling during market downturns can lead to financial setbacks. We have Cullen Roche who said, the stock market is the only market where things go on sale and all the customers run out of the store. And he is a contributor for Seeking Alpha. And then going back in time, we have Peter Lynch who was one of the most famous investors of all time from Fidelity, who ran the Magellan Fund. He said, the key to making money in stocks is not to get scared out of them. And, of course, Warren Buffett said, be fearful when others are greedy and greedy when others are fearful. And a phrase that I pretty much have coined, which if you have been on these webinars before, I say, fear fades, the markets will always return to fundamentals, and it is so, so true.

And on the right hand side here, we have a chart that highlights, we did a backtest, and we went back to 2010, and we looked at five market pullbacks that were in excess of 15%. And we used that 15% as the line in the sand. Now, the markets, of course, went down more than 15% in many of those cases. They went down 20%, 25%, 30%, but we use 15% as that line in the sand. And if you purchase the market during that 15% pullback from those five periods, on average, the S&P 500, if you held onto it, and you bought it when it was down 15%, the S&P 500 was up almost 50% two years later. So, just ignoring that noise and that fear, if you just pull the trigger when the market is down 15%, we found on average you’re up 50%.

If you purchase the Top 10 picks on Seeking Alpha’s Quant system at that time of the 15% pullback, and I will tell you our Quant picks, which have very strong fundamentals, typically sell-off far more than the market during those periods. If you bought the Top 10 picks during that 15% pullback and you held it for two years, you were up on average a 117%. So, this is important because we did go through this period during 2025. There are many years where we do have pullbacks. Not sure if we’re going to have it in 2026, but if you own the Top 10 from 2025, you definitely witnessed a pullback in those stocks, and then you definitely witnessed when the markets returned fundamentals, those stocks skyrocketed. So, I really just wanted to take some time to highlight this chart here.

So, we do have conflicting economic data at this time, and that has led to the rate cuts that we saw in the fourth quarter. We had three cuts. Really, the inflation has always been a concern. We haven’t seen inflation spike up, but it still continues to be sticky, but with the markets we’re really concerned about, it was labor data. And this labor data, which continued to get weaker and weaker, really acted as the inspiration and catalyst for the Fed to start lowering rates. We have a number of other events. In May and ironically, Moody’s downgraded the U.S. credit rating during May, and that was pretty much the end of the correction. So, it doesn’t surprise me at all because it always seems like the rating agencies come in when the worst is over, and that confirmed it.

In a way, I feel like once Moody’s downgraded the market, it actually started to rally from that point. So, it’s a contrarian indicator when these agencies tend to downgrade. But we saw a lot of major brokerage firms cut the recession odds following the tariff truce, and that really helped to elevate the market. The worsening of labor data, in a way, that gave the market conviction that the Fed would be lowering rates. And we saw interest rate cuts in September and October, and that definitely injected that momentum into equities. And of course, we then had the government shutdown, which delayed economic data and fueled further uncertainty, and we saw a third rate cut occur.

So, where does this bring us right now? Well, coming into January, we have on January 28, the next FOMC meeting. And at this point, interest rate traders actually feel there is a fairly good balance where rates are and the economic data. So at this point 85% of interest rate traders actually expect no cut in January 2026. They’re going to want to just see how the data plays out. They’re going to want to see how corporate earnings come out, and eyes will continue to focus on the labor market and inflation. But right now, interest rate traders are betting that there will be no cut in January. So, let’s get to Quant. Yeah.

DS: Steve, real quick before we jump into Quant and go into the Quant system and why we follow this GARP strategy that you have here. We just did a phenomenal recap of 2025 that you had mentioned. And one of the things that stands out to me as an investor is the rip of gold and silver and pretty much all the metals this year. So, actually, what I was going to do is, I was going to go ahead and open a poll to everybody. Hopefully, you can see here on your screen of what material, what metal do you think is going to outperform this next year as well? We’re talking gold, silver, platinum, palladium. And if you go on the market data page here on Seeking Alpha and look at those four different metals for just all of 2025, I mean, it has been going off the charts. The entire metal sector is just going gangbusters. So, I was just, want to ask everybody right now, give you a second to take a drink there as well, which precious metals will outperform its peers in 2026? And I’m going to leave this poll open for a little bit, and we’re going to come back here in a little bit, and we’ll go over the answers. Alright?

SC: Cool. Well, I love that. Really looking forward to seeing the consensus answer there because I’m a big believer in consensus. So, it’d be really interesting to see that data point when the survey is complete.

So, what is Quant? We’re just about to get into our Top Stocks for 2026, but the methodology that we use is a quantitative methodology. It’s a systematic process. So Quant is really a combination of fundamental analysis and advanced computer processing. And we really use analysis that’s very similar. I started my career as a research analyst for the company that’s now Wells Fargo. So, my background started in research, and much of what I do through Quant incorporates fundamental analysis. And Daniel had just mentioned we use, for our Quant system, what’s referred to as a GARP strategy. So, we look at stocks that have growth at a reasonable price plus a little bit extra to our strategy. We look at factors, investment factors, and I’m going to tell you those factors that we look at because we want companies that are collectively strong on value, growth, profitability, EPS revisions, and momentum.

So, there are five core factors that we assess and we rank stocks on. And when we rank them, we look at each of those metrics for a company and we compare it to its sector. And this gives us the ability to separate the strong companies from the weak companies within the sector, and it enables us to have a ranking. So, our Quant system is really a combination of using fundamental analysis, and the computer processing gives you the ability to look at 5,000 stocks and basically screen them on a daily basis. And we do run our model every single day, so you have a fresh directional recommendation coming out by usually 6:00 AM or 7:00 AM. Takes about two hours to run, and we are going through millions and millions of bits of data.

So, when I was an analyst, and with most analysts, whether at Merrill Lynch or Morgan Stanley or Goldman Sachs, you will cover a sector. And within that sector, you can cover about 20 stocks. But in reality, as a human being, you can only write so much research, and it takes time and effort to go through balance sheets, income statements, cash flow statements, and compare your companies to each other. So, an analyst, really, on any given year, they might only have three or four research reports on a stock, and they’ll have alerts as well. And most analysts can only cover about 15 to 20 stocks.

When we take computer processing, I could take those same metrics, and what we do in essence is, we go through every company’s balance sheet, cash flow statement, income statement, and hundreds of financial metrics, and through computer processing, we can go through those every single day.

So, where an analyst can only maybe refresh a research report 3x or 4x a year, we refresh our reports every single day. So, every day, the data for all the factors and all the metrics have been refreshing. You’re getting a brand new recommendation every day. So, sometimes that stock will stay as a Strong Buy for a long-time or a Hold or a Sell, sometimes it’ll flip back and forth. And the reason why it flips back and forth is because we’re looking at all those data points relative to other stocks in the sector.

So, it’s really fundamental analysis and advanced computer processing, and that’s what Quant is. It’s really not that big and scary. We’re just taking the power of computers and conventional fundamental analysis.

So, we have a pretty good track record with our systematic model. If you look at the five-year track record, you could see – and this is not an investable product that I’m pointing out here. This is basically showing you all our Strong Buy recommendations rebalanced on a daily basis, compared to Wall Street analysts Strong Buy recommendations, rebalanced daily, and the S&P 500. And you could see the Quant system and the Strong Buys were up 221% over the last five years, compared to Wall Street, which was up only 25%, and the S&P 500 up 65% for the same period. So, you could see our GARP system clearly outperforms both the S&P and Wall Street.

And taking us to the next chart, year to date, well, basically going over what was from – I’m sorry. Yeah. If you look at the bottom, it says 12/31/2009. It’s actually supposed to be from our previous year. So, we’re looking at a year to date for the final for 2026. The overall Quant Strong Buys were up 30%. Wall Street Strong Buys were up 19%, and the S&P 500 on an equal weighted basis was up 12%. And the reason why on this chart, I’m showing it on an equal weighted basis is our Strong Buys, we have a portfolio and we equal weight that. And we’re also equal weighting the Wall Street analysts. So that just gives you an idea on an apples-to-apples basis how it compares. The S&P 500 on a market cap weighted basis was a bit higher, but on an equal weighted basis, it was up 12% for 2025.

So, Top 10 Stocks recap from 2025. 7 out of the 10 names had generated positive returns in 2025 with five maintaining Quant Strong Buy and Buy recommendations. AI adjacent infrastructure and semiconductor exposure, particularly in Celestica and Credo, were the standout winners. You could see the total change in Celestica. Looking below, it was up a 198%, and Credo, another information technology stock, was up 88% during that period. But we had Urban Outfitters, which is a consumer discretionary, that was up 36%. We had Oppfi, a small cap financial company, up 47%. AGX, up a 127%. EAT, which is a restaurant that owns Chili’s and an Italian restaurant, Maggiano’s, was up 10.3%, and DXPE industrial was up 29%. We had two big losers. INTA was down 30%, and LRN was down 36%. So, not all of them are winners, but overall, the performance was great.

For 2025, our top 10 stocks were up 45% from January 9 to the end of the year. And here you could see that graph versus the S&P 500. So, the S&P 500 on a market cap weighted basis was up 17.6%, and our Top 10 Stocks, as I mentioned, up 45.68% for 2025. So, we had a really good year for 2025 for our Top 10.

If you looked at 2024 and you actually held the stocks, the return is even more amazing. So, the return for the Top 10 Stocks for 2024, should you have held it to December 10, 2025, you were up 356% versus the Mag 7 up a 103% and the S&P 500 up 47%.

So, I think we’re really establishing a fairly good track record and going back to 2023. If you held those stocks from January 05, 2023 to December 10, 2025, you are up a 187% versus the S&P 500 up 85% for the same period. So, if we’re doing our job, hopefully, we’ll have some great returns for 2026 as well. So, without further ado…

DS: Steve, I do want to mention as well while you’ve been talking, people have been going off here in the chat about some of your picks. I mean, even before we started this event, from the picks over the last few years. So people are definitely appreciating the value just so you know. You and the team, the Quant system, not everybody fully understands it, and that’s what we’re trying to do here, help everybody understand it a little bit better today and why the GARP strategy can work. As we mentioned, as we do these webinars in volatile times and market pullbacks and when people feel like, they feel a fear of market pullback even though the market’s still at an all-time high and it’s like a 2% or 3% drop, and when everybody starts to freak out a little bit, the Quant strategy continues to perform.

Wanted to take a quick second, though, before we get into Top 10 Stocks here and just go ahead and publish these results from our poll about which precious metal will outperform its peers in 2026. And I saw a lot of people jumped in the chat, but the poll feature was, I should have explained this probably a little bit better. It was directly off to the side underneath the chat button there. But silver actually takes first place for what people are expecting to outperform its peers in this year. So, take that into consideration. It’s an interesting one.

SC: Very interesting. Love the consensus.

DS: …made the run. Yeah. So, silver it is. But anyways, back over to you. Let’s get into Top 10 Stocks for 2026, and I might keep an eye on, this is my favorite part, because as you start to talk about these things, I like to watch the market as these tickers come pop-up on the screen. We’ve been known to move the markets, so let’s get into it.

SC: Yeah. Absolutely. And, thank you to those individuals for the warm wishes for the performance, and the assistance that I provide. It’s really you. You’re looking at the research that we’re providing, but you’re pulling the trigger on it, and these stocks have strong fundamentals, but I do appreciate your gratitude. So thank you so much for that.

So without further ado, we’re going to get into our Top 10 Stocks for 2026. We’re going to lead off with Micron Technology, ticker symbol, MU. This is a big company. Market cap, $355 billion. It is a Quant Strong Buy. And in the IT sector, it ranks 1 out of 536 stocks. And within the semiconductor industry, it ranks 1 out of 68. Now, I’m going to tell you right away, this stock has definitely performed well over the last 52-weeks. It was up 254%, but as I say during all these webinars, do not pay any attention to that long-term performance. That performance is just a great indicator that the company is doing well, it’s outperforming the sector, the product is right, but that should not be utilized as a point of fear, which many people do. They’re afraid to chase stocks.

So, I’m going to take us to the right hand side, and you’re going to see the factor grades here. So, it’s really important when you assess a stock. And when we assess stocks, we do it relative to the sector. So when you’re looking at our factor grades, those factor grades give you an instant characterization of how the company compares to the rest of its sector. So on a valuation basis, it’s actually cheaper versus the sector as indicated by the B+ grade. But more importantly, as I mentioned, we don’t want you to be fearful of the price appreciation. So, if you look further to the right, you’ll see the valuation grade six months ago, and it was actually a D+. So, the valuation framework is actually better today. Okay. The stock is actually cheaper today than it was six months ago.

So, despite that 254% increase over the last year, you’re actually getting a better valuation framework than you did a year ago. And six months ago, you could see the D+ grade versus B+ right now. The growth for the company has remained very strong. It’s A+ versus the information technology sector, and that has not changed. It was the same six months ago. Profitability, very strong at A+. This is almost a pure A+ report card with the exception of valuation, which is a B+. And what I’m going to tell you is, I’m actually going to bring us into our platform, and we’re going to highlight some of the things that make us pick this stock. So, we’re going to go to Micron Technology, and this is what we refer to as the stock page or the symbol page. Daniel, give me the thumbs up so I know you’re seeing it.

DS: Yeah. We got you.

SC: Terrific. Okay. So, as we mentioned, the stock at this point, up 233%, right now about 6.5%. So, I think it has made a good move this morning, already. You could see the factor grades right over here. And in addition to the factor grades, you can actually see the analysis from our Seeking Alpha contributors. So, if you’re looking for qualitative commentary, we have some great analysis from our contributors. I will say in the Ratings Summary on the upper right hand side, these are three independent grades.

So, you’re looking at the consensus of Wall Street. You’re looking at the consensus of our Seeking Alpha contributors, Wall Street, and then the Quant system. And the Quant system actually has a Strong Buy in the stock, and that has served us well. Over the last month, the stock is up 34%. So, the stock, the Strong Buy has definitely been a good indicator of buying, but it’s definitely not over.

If we click in growth, so you’re one click away, and this will tell you on a number of different metrics, and you could see this is an A+ report card for the most part from a growth perspective. The forward growth rate for Micron is 51%, hence the A+ versus the sector with a forward growth rate of 8.27%. So, you could see it’s at a 525% premium to the sector. So, we love it on revenue growth. If we go to the bottom line and we look at EPS on a diluted basis, going forward, you could see the growth rate is 211% versus the sector at 13%. And then if we look at the long-term growth rate, and this is a very important factor, it’s the EPS forward long-term growth rate, which is a three-to-five year CAGR, analysts estimate that to be at 47% versus the sector at 15.8%.

So, our Quant model, it is backward looking and forward-looking as well. Because what we do, obviously, we’re taking history. We’re bringing that into our algorithm, but we’re also bringing analyst consensus estimates into our algorithm. So, this way we factor in future growth. And again, we’re looking at revenue growth. We’re looking at EBITDA growth. We’re looking at EPS growth. So, we’re taking those analyst consensus estimates and putting it into our model.

If we look at profitability, you could see it’s overall an A+ for Micron Technology. EBIT margin is an A+. EBITDA margin is an A+. Return on common equity is an A. You could see it’s at 22% versus the sector at 6.3%. So we not only can compare it to the sector, but on most of these tables, you could actually look at the five-year average. So right now you could see the return on common equity is 22%. Now, the five year average was 7%. So, the current ROE is significantly higher than it was for the five year average, but also significantly higher than the sector. And I love that when that happens. When I have a company that looks good compared to its five year average, but also much stronger than the sector, that’s a Buy for me. Hence, why Micron Technology is one of our top stocks. Going to take us back to the slideshow.

DS: Steve, I think we should mention real quick too, because people always ask us when we present stocks like this in webinars, and they go, well, it’s not an all-time high. Like, how am I going to buy now? The cool thing to remember is, the Quant system does update every single day, and price is one of those factors. Right?

SC: Every day. I’m glad you mentioned that, so I’ll take you to the valuation page because this is updated every day as well. So, the stock is up a tremendous amount, but look at the Forward P/E. It’s actually only 9.7x compared to the sector at 24x. So, this stock on a Forward P/E basis is at a 60% discount to the sector. And if we look at my favorite metric, PEG. On Forward PEG, which combines both P/E and the growth rate into one metric, it’s an A+ at 0.2 versus the sector at 1.66. The stock is at an 87% discount to the sector. So despite that massive run up in the stock is still immensely cheap, compared to the sector. And obviously, as I pointed out on the growth, you could see the growth is significantly stronger than the sector. So, this is why it’s one of our Top Stocks for 2026.

Back to the slideshow, we’re going to go to stock number 2, Advanced Micro Devices, ticker symbol AMD. This is another information technology company, very large as well. Market cap, $363 billion. This company ranks number 17 out of 536 in the IT sector. And within semiconductors, it ranks 5 out of 68. The one-year return is 70%, but we still like this company as well. It had been a Hold for a good portion of the year, briefly got into a Buy territory back to Hold. And one of the reasons why is because the valuation was at a D level, but you could see now the valuation framework, it’s actually C- versus D+ six months ago.

So, the valuation framework is slightly better, but the growth is still very strong. Profitability is very strong, but the momentum of the stock has picked up significantly. The momentum is a really important factor. Indeed, you could look at empirical data going back over 200 years, and of all these factors that we look at, and even if you break it down to like P/E or ROE or price-to-book or revenue growth or earnings growth, one of the best and most predictable indicators is momentum as a factor. And importantly, the momentum grade now is an A versus six months ago where it was a C+.

So, really strong factor grades from that standpoint, but the company has really good earnings growth rate as well. It has 45% EPS Forward long-term growth rate for that three to five year CAGR, which as I mentioned is really important, compared to 15% to the sector. That’s Forward ROE growth rate, not the ROE itself, but the actually ROE growth rate is 28% versus the ROE growth for the sector at 1.76%. So, ROE for this company is growing much, much faster, and the PEG at 1.24x is at a 25% discount to the sector. So, I really do like it from that valuation standpoint.

Our next stock is Ciena Corporation. Ticker symbol CIEN. Market cap, $34 billion, a Quant Strong Buy. Within IT, it ranks 3 out of 536 stocks. And within the communications equipment industry, it ranks 2 out of 38. The one-year return on the stock is a 166%. You could see the valuation as a D+ now versus C+. So that has dropped, but you could see growth is an A-. So, it’s still very strong. Momentum comes in at an A+ now versus six months ago where it was a B. Importantly, analysts like this company more now than they did six months ago. So, you could see that revisions grade is a B+ versus the D. So, I’m actually going to take us into the platform.

DS: While you jump us over, Steve, I also want to mention just to remind everybody that these 10 picks are in no particular order. These are just the 10 picks for the year. Just because they’re rated 1 through 10 does not make them a rating of importance, if you will.

SC: Yeah. And if you want to see, when you go to, if you are a Premium or Pro member, you’ll see next to the Quant Strong Buy, there’s actually a numerical data point, and those change slightly. So, you could see in terms of the strength of the Strong Buy, you would see it there. You could rank it by that. But these are 10 stocks that we picked out of really probably the Top 40 Quant Strong Buys. And, of course, there is an active management aspect to it because I’m picking these stocks out of our Strong Buys.

We could see Ciena is now up 7.8%, so it’s having a good rally on the day. And what I wanted to highlight here is the EPS revision. So, this is one of the reasons why we’re highlighting the stock. You could see it’s a B+ now versus a D six months ago. So, analysts actually like this company more. And as we look at the EPS revision grade, you could see it’s a B+. So, what this is, it’s actually the quantity of analysts that are taking their estimates up or down. So, in the last 90-days, we’ve had 15 analysts who have revised their earnings estimate up and zero have revised it down, and that is for the full-year. If you look over here, you’ll see for the quarter, this is the upcoming quarter, in the last 90-days, 14 analysts have revised their estimates for the upcoming quarter, and zero have taken it down. So, increasingly, analysts are really liking the stock. Hence, it’s one of our picks along with a very strong fundamentals.

If we look at the growth for the company, you’ll see a lot of green here between As and Bs. If we look at the forward revenue growth, it’s 19%, compared to the sector at 8.27%. If we look at the EPS diluted growth going forward, it’s a 55% growth rate, compared to the sector at 13%. So, I’m loving the growth. And in terms of valuation, it’s a bit expensive. But if you look at my favorite metric, again, where you combine both growth and P/E, it’s actually at a 36% discount. So, for me, I really like it on that PEG basis. And a D+, that still puts it in a Buy territory for me.

Going to take us back to our slideshow.

DS: So that valuation doesn’t worry you? Because I see some people in here going, oh, the valuation looks a little bit rich.

SC: Anything that’s in a C-, D+, even D territory, if I have a strong PEG ratio there, I still like it. The time that I pull back and most stocks will go to a Hold, or default to Hold is if it goes from a D to D-. Once the stock hits a D-, that says, you know what, this is getting rich. So the stock can be a Hold. That doesn’t mean sell it, but it does mean it’s getting expensive. So, it’s something you just want to hold on and pay attention to. And of course if it flipped into F territory, you might likely see the stock go to a Sell or Strong Sell, which just means it’s going in the stratosphere. And the concern would be if, especially if that PEG is super expensive as well, that really means the stock is quite overvalued.

So, taking us to our next slide, stock number 4, Celestica, and this is one of the only stocks that has been repicked. It has been a tremendous winner for a Top 10 Stock, as well as for Alpha Picks as well. Market cap on this company is about $34 billion. It is a Quant Strong Buy. In IT, it ranks 5 out of 536. And the industry that it’s focused in is electronic manufacturing services where it ranks 1 out of 18. Over the last 52-weeks, the stock is up a 191%.

Now, having said that, as Daniel highlighted, a lot of people are sometimes fearful when the stock has made a big run. Let’s go to the right hand side. Let’s go to valuation, and you will see the valuation grade of C- is the same where it was six months ago. So, the valuation framework hasn’t changed at all despite the stock going up. But what has changed is the company’s growth.

The growth factor grade is an A- now versus a B 6 months ago. So, growth is actually getting stronger for this company. Valuations stay the same. So, it really makes it look attractive to us. If you’re not familiar with it, they manufacture complex hardware platforms for hyperscalers. Revenues grew about 28% year-over-year, and EPS year-over-year climbed about 52% in the third quarter. The Forward EPS diluted growth rate is 51% versus the sector at 13%. They have about $550 million in cash from operations, and the PEG is at 1.31x, which puts it at a 21% discount to the sector.

Looking at stock number 5, Coherent, ticker symbol COHR. Market cap is currently $33 billion. Quant Strong Buy. Another IT stock, ranks 8 out of 536. This is also, an electronic components company where it ranks 1 out of 21. It’s had a wonderful return over the last year. But if we look at the valuation, we could see it’s a C- now versus a B-, so it’s still a bit rich. However, C- really puts it in-line with the sector, but the growth far outpaces the sector. So, it has an A- growth grade now.

Profitability deteriorated a little bit, but momentum is very strong, and the EPS revision grade has actually improved over the last six months, and you could see Coherent has done incredibly well. This is a vertically integrated manufacturing leader which serves high growth markets in AI data centers. And the stock has delivered 9 consecutive double beats of top and bottom line, which is very, very impressive.

Earnings grew at 56% for its three to five year CAGR, which is quite strong. It has a 50% Forward ROE growth rate. Again, not the ROE itself, but the ROE growth rate at 50%, which crushes the sector, which has a ROE growth rate of only 1.76%, and the PEG is at a 30% discount. So, we are liking Coherent.

Now, we’re going to take us out of the IT sector. Those Top 5 Stocks that we showed pretty much revolved around information technology. I like to have some diversification. So, we’re going to start with a financial. Many of you are familiar with The Allstate Corporation, ticker symbol ALL, it has a market cap of $53 billion and a Quant Strong Buy. Within the financials sector, it ranks 15 out of 684. But within its industry of P&C insurance, it ranks 1 out of 53. So this stock has not had the same stellar return as many of the technology stocks. It is one of the largest publicly held personal line insurers in the United States, and Allstate is focused on its transformation growth strategy through AI underwriting.

So, let’s take a look at some of the factor grades here. We could see that the valuation is actually more attractive now than it was six months ago. But again, the stock price not doing much over the last 52-weeks. However, what we do see, which is really impressive is the growth for the company. So, I’m actually going to take us into the platform and we’re going to go to Allstate. I’m going to put the symbol in. It’s this easy, and it will take us right to the platform. So, as you could see in the last six months, the stock is actually up about 6%. And then we saw over the year, it’s up about 11.5%. So, not a major run compared to the overall S&P 500.

The valuation grade, I’m going to click on. The overall valuation grade is a B-, but some of the conventional metrics look great. They’re in A territory. So, the Forward P/E for the company is 7x versus the sector at 11x. So, it’s putting at a 37% discount on a P/E basis. If we look at the PEG…

DS: Hey, Steve. Steve, real quick. While you’re highlighting these PEG ratios and P/E ratios, can you try to highlight the numbers for me just so people can keep up with what you’re looking at?

SC: Yeah. Absolutely. So, we’re looking at the PEG right here. It’s an A+. The PEG ratio is 0.37 versus the sector at 1.07. So, it’s at a 65% discount to the sector on a PEG basis. And on conventional P/E, the Forward P/E is 7.02, compared to the sector at 11.28, 37% discount to the sector.

If we look at growth, the overall revenue growth is pretty much in-line with the industry, but what looks really incredibly strong, let’s take a look at the EPS growth on a year-over-year basis and on a Forward basis. The EPS on a diluted basis year-over-year was up 99%, compared to the financials sector at 14%. And the Forward diluted growth rate, and this is one of the few companies where my Forward number is actually way higher than my year-over-year number. The Forward diluted EPS growth rate is a 193%, compared to the sector at 10.46%. So, I’m actually loving this EPS growth rate for the company. Very strong indicator.

Another strong indicator is that long-term three to five year CAGR growth rate at 18% versus the sector at 11%. So, these really help give it an A+ in terms of its growth. And if we go to revisions, you could see analysts like the company a lot more now than they did six months ago. The revision grade is A+ versus six months ago it was a B-. So, analysts increasingly are liking this. So, we’re going to show you what that looks like. So, the last 90 days, 21 analysts have revised their earnings estimate up for Allstate. Zero have revised it down. And for the upcoming quarter, 18 analysts have revised their numbers up and zero have revised it down.

So, these are some of the really important things that I look at when I’m assessing this company. I think Allstate is really undervalued, compared to the financials sector, and it has some incredible growth numbers as well.

If you’re interested, as I mentioned, many of our contributors have written about it, so you’ll see qualitative commentary, and you could look at what they have to say on it as well. Going to take us back to our slideshow.

DS: Stock’s seen a nice pop as we’re talking about it, Steve.

SC: Yeah. No. I think it’s really undervalued. I really like the stock. Number 7, Incyte Corporation, ticker symbol INCY. This is a large cap company, but smaller than the ones we’ve been talking about. Market cap on this is $19 billion. It is a Quant Strong Buy. It is in the healthcare sector, and it ranks 19 out of 975 companies in healthcare. It is in biotechnology specifically where it ranks 11 out of 470. The one-year return on the stock is 42%, and you could see the valuation framework is almost unchanged. It’s an A now versus six months ago, where it was A+. So, remember, this is all sector relative. So, the valuation compared to the sector is extremely attractive now.

The growth grade is A+ versus the sector. Profitability is an A versus the sector. Momentum is a B+ versus the sector, and analyst revisions B+. This has improved to B+, compared to six months ago where it was C-. So, analysts are actually feeling a lot more positive on this company, and I will say this is one of the few biotechnology companies that actually has positive earnings. This company offers a diverse pipeline of therapies for cancer, blood disorders, dermatology. And I said, unlike many other biotech pharmacies, it actually has earnings growth rate, and the year-over-year revenue growth was up 18% in terms of its earnings.

It has a 206 Forward EPS diluted growth rate. So, its earnings growth is very, very strong, compared to the sector at 10%. It also has an enormous amount of cash from its operations at $1.25 billion versus the sector, which is actually negative. In the healthcare sector, it’s negative $10. On a PEG basis, it’s 0.07. It puts it at a 96% discount to the rest of the healthcare sector. So, really like this stock. It’s a biotech, one of the few that actually has positive earnings. So, I would definitely encourage you to take a look at this.

Stock number 8, Barrick Mining Corporation, ticker symbol B, a Quant Strong Buy within the materials sector. It ranks 4 out of 277, and within its industry, it’s gold. But this is actually a bit diverse, and they’re making big headway into copper, but within its industry, it ranks 2 out of 48. As Daniel mentioned before, and as I showed on a chart before, gold stocks have done incredibly well. This stock is up in the last 52-weeks a 186%. But if we look at the valuation on the right side, it’s still attractively valued. It was an A- six months ago. It is a B- now. So, a little bit more expensive, but still far more attractive to the sector as this is sector relative.

Growth comes in at A-, so it’s just as strong in terms of its growth rate. Very profitable at A+, compared to where it was six months ago. The momentum of the stock obviously is stronger than where it was six months ago. And importantly, analysts are liking this company more and more. The revision grade is A- now versus six months ago where it was B+. So, analysts are picking up their revisions for the company.

In terms of the growth, well, I should say, as I mentioned, they are a leading global miner, but their recent focus is actually on copper and the metal of electrification, which has tailwinds in energy transition, AI data center buildout, and EVs. So, they have a bit of diversification to where their mining takes place.

In terms of its earnings, the Forward EPS diluted growth rate is 46% versus the sector at 12.6%. They have a whopping $6.36 billion in cash from operations. That is a huge premium to the sector. And in terms of the PEG ratio, it’s a 69% discount to the sector.

Taking us to stock number 9, Willdan Group, ticker symbol, WLDN. This is one of the smaller companies that we’re recommending today. The market cap is 1.57 billion. It has a Quant Strong Buy. It’s in the industrials sector where it ranks 5 out of 617 stocks, but within its industry of research and consulting services, it’s 1 out of 39. This company has had an incredible one-year return at 190%. But immediately, I want to take us over to the valuation. And you could see, despite that return, the valuation framework is the exact same now as where it was six months ago, but we’re actually seeing an improvement in the growth for the company.

On a sector relative basis, the growth is A-, but six months ago, it was a B. So, that’s a pretty nice bump up in growth for the company. Profitability is bumped up as well to B- from C six months ago. And our momentum looks very strong, and our analyst revisions continue to look strong with an A- there.

In terms of its growth rate, it has a 61% EPS diluted growth rate, which is a 542% premium to the sector. Revenue growth for the company is 13% versus the sector at 4% for year-over-year. And the trailing PEG is 0.54x, which puts it at a 53% discount to the sector. So, again, this being one of the smaller companies, but we really like the numbers that we’re seeing.

And our final stock, but not least, last but not least, is ATI. This company has a market cap of $16 billion with a Quant Strong Buy. It’s in the industrials sector as well ranking 4 out of 617, and its industry is aerospace and defense where it ranks 1 out of 62 competitors. Obviously, another good return up 114%, but the valuation is almost identical to where it was six months ago. So that valuation is really in-line with the sector. Growth is where it was six months ago. So, we like it from that standpoint.

Profitability has actually increased. So, the company’s becoming more profitable. It’s a B now, compared to six months ago where it was C-. Momentum is an A+ and the analyst revision grades is at an A. And interestingly enough, if you actually look three months ago, that has improved at a full grade from just three months ago. So, analysts over the three months have increasingly been liking the stock, taking up their earnings. Growth rate for the company is 25% EPS growth, a 110% premium to the sector, cash from operations is $679 million, 73% premium to the sector, and on a PEG basis, it’s at an 18% discount to the sector.

So, Daniel, that is our Top 10 Stocks. Something I want to add about these Top 10 Stocks, and one of the reasons, a core reason why I picked these stocks is because of the amazing top and bottom line growth that we’re seeing. If you look at the bottom of this table on the left hand side, you will see the average for the Top 10 Stocks for the Forward revenue growth rate is 20%. So, we’re taking all the revenue growth Forward estimates. It’s 20%. The EPS Forward estimates is 73% on average. If we compare that to the S&P 500 you’re looking at the S&P 500 with a revenue growth rate of 6% and an EPS growth rate of 10%.

So, again, our Top 10, 20% and 73% versus 6% and 10% for the S&P 500. And even comparing it to the Mag 7, which is 35% of the S&P 500 the revenue growth rate there is 17%. So, our Top 10 coming in with stronger growth, but notably the Mag 7 stocks on average have an EPS growth rate of only 20%, compared to our Top 10 with a growth rate of 73%. So, this I think is a very telling chart.

And then you could see each of these individual boxes for all 10, which shows you for each company where the Forward revenue growth rate is and the EPS revenue growth rate is. So, I think this is a really telling chart. One of the reasons why we like these stocks is these are growth companies and crushing the S&P 500, as well as the Mag 7 in terms of its growth.

So, this is January. These are our Top 10 Picks. There are more months in the year than just January. And if you want assistance for February, March, April, May, June, July, August, September, October, November, and December, there is a way to get assistance for that. I do have two products that I created where we help provide the research for you. One product is called Alpha Picks, and the other product is called PQP. We actually started Alpha Picks about 3.5 years ago. Alpha Picks is a really easy user friendly product. If you don’t like investing in a lot of stocks but you want some good ideas, we send out our two favorite stock picks each month.

On the trading day closest to the 1st of the month and the 15th of the month, we’ll send you a Quant Strong Buy. And if you look at the right hand side, you could see since, just over the last 52-weeks, really for 2026, the portfolio did quite well. Alpha Picks was up 41% versus the S&P up 16% for the same period. Typically, any month, there’s just going to be 2 to 3 trades. So, it’ll be those two Buys and occasionally there’ll be a Sell. So, maybe that is the third trade. Alpha Picks, a little bit more conservative than PQP. We look at stocks that are predominantly in The U.S., and they have to have a market cap above $500 million. We’re also looking at stock prices above $10.

PQP is for those who are a little bit more adventurous and want more than just two ideas a month. So the PRO Quant Portfolio is actually 30 equally weighted positions, and we rebalance it every Monday. So any given Monday, you’ll have on average two to three new stock recommendations. It’s definitely broader in terms of the universe of stocks because we’re looking at U.S. stocks, plus ADRs from all over the world. Both platforms, you get detailed analysis every time there’s a stock pick.

We also do webinars for each one of them. And the turnover, I would say is, definitely far higher for PQP because it is a fixed portfolio of 30 stocks. We’re taking names out pretty fast and bringing new names in, and it’s very focused on the Top Quant Stocks on a weekly basis, where with Alpha Picks we’re looking at just two a month.

But you can see the PRO Quant Portfolio on the right hand side, we actually just started that in June. So it’s only six months of performance. And you could see the PRO Quant Portfolio is up 26%, compared to the S&P 500. And here, I do it on an equal weighted basis because it’s an equal weighted portfolio. So, the S&P 500 for that period is up 9.67%, compared to the PRO Quant Portfolio up 25%. Bottom line is, these Quant ideas, they perform very well.

Our strategy is a GARP strategy where it’s growth at a reasonable price with a couple of little extra add-ins there, and it’s really a systematic trading model that has worked quite well, compared to the S&P overall and Wall Street.

Thank you so much for your time. I hope that wasn’t too long. We covered a lot during the presentation. My hope is that you found it valuable, and it will help you make informed decisions going forward. And to those who invest in the Top 10 for 2026, we wish you luck.

Daniel, let me open up to some questions.

DS: Yeah. We’re going to jump into the questions here in just a moment. I mean, First I wanted to just say thank you for taking the time, you and your team putting together these Top 10 that we go through every single year. They have consistently done well. I mean, you guys have whatever formula it is behind that box there that you have that you walk us through with the valuation of the metrics and the fundamentals and how they matter. They seem to continue to outperform.

So, everyone watching today, I hope you at least do what I do. If you don’t take any actions on these, put them in a Seeking Alpha portfolio. Just take these 10 names, put them in there. You can track them all throughout the year. These are great ideas and starting points. They kick off the year. And as Steve mentioned, it’s a long year ahead of us. So, not all of them are probably going to be winners. There’s going to be ups. There’s going to be downs, and we’ll see how it does over the course of the year. And, of course, we will always recap it here December later this year for everyone as well. Alright.

SC: Daniel, we’re totally in sync. I absolutely brought that up, not knowing you were going to talk about the portfolio. So, I wanted to show everybody what it looked like in the portfolio. I’ve done that myself. Very easy to look the symbols up just like Daniel said. But importantly, you can look at the Quant score. So, if anything drops to a Sell or a Strong Sell, you’ll know and you’ll get that update when it happens by using the managing alerts.

Something I also wanted to highlight here is, if I go to the earnings page, and this is something that’s really important to me. If we hit a period again where the market corrects, and I’m not saying the market’s going to correct, but if it does, and you’re asking yourself what companies have strong fundamentals, something I love to look at is the EPS numbers as they get reported. You could see here these companies, the most recently reported from December through October, only one of the stocks fell a little bit short. That was Barrick Mining Corporation. All the others surprised to the upside. I cannot tell you how often when markets pull back, and these companies report that they actually surprise to the upside. So, that’s a very good indicator that fundamentals are strong, and you ignore the stock price that could be going down 5%, 10%, 15%, 20%. If you continue to see earnings for both top and bottom line coming strong, you know you have a good stock with good fundamentals.

So, I really wanted to just highlight that. If we go to our growth page here, you could look at the Forward revenue growth, and you could look at the EPS growth rates. You could see it’s just tremendous for these stocks. So, we’re really giving you some companies that have incredible growth rates for both top and bottom line. And you could always check the health score. And if you’re looking at the health score, you could see all 10 of these stocks are Strong Buy, says awesome. You have 10 stocks that are highly rated. And, this will show you how you compare to others. This portfolio of 10 stocks, it says your portfolio is in the top 1% of all portfolios. So and that would be based on the Quant Rating.

So, love to highlight that. And, again, I’m just looking at the holdings every day, and I could see the performance today so far for these stocks has been fantastic. We have Ciena up 7.28%, MU up 7%, Incyte up 4%, but a couple losers today. ATI, which is the aerospace and defense company is down, and we have Advanced Micro Devices down a little bit too. So, probably a great opportunity to pick those up.

Daniel, questions?

DS: Yes. Real quick. I saw some people asking in the chat here, just a second ago about pricing for Alpha Picks and PQP. If you want to get interested in those, Alpha Picks is $499 a year. It is that system provides two stock picks every single month throughout the year. As Steve was mentioning, there are more pick ideas that always come throughout the year for that product there. And PRO Quant Portfolio, which is more of the active trader approach, you’re doing Buys and Sells almost every week, it seems like. The whole system is laid out on PRO for you there. Seeking Alpha PRO currently has a $99 first month option going on, and then it is a renewal of $2,400 a year for that subscription.

If you have any questions about that, you can always reach out to us, subscriptions@seekingalpha.com. We’ll put that in the chat here as well, but subscriptions@seekingalpha.com, and we can help you with that there. So, Steve, let’s dive into some questions about…

SC: Yeah. Daniel, I just want to highlight something really quick there. As I mentioned, Alpha Picks has been out longer, but little known fact, the whole reason why we came up with the PRO Quant Portfolio is we actually did a survey for our Alpha Pick customers and they wanted more than just two picks a month. That’s why we created the PRO Quant Portfolio. So, again, higher frequency with PRO Quant Portfolio, higher price as well, but both have excellent performance. All right. Q&A Daniel. Let’s hear it.

DS: Alright. Let’s get into it. So, people are wondering, first and foremost, we were talking about the different model portfolios you have and then these Top 10 Picks, but year-over-year, how much of an overlap is there between your top takes you present now versus what may pop-up in one of those other model portfolios?

SC: Yeah. It varies a little bit. If we’re looking at PQP versus Alpha Picks, there will be some crossover, but keep in mind, Alpha Picks is focused really on U.S. securities, and PQP is looking at all market cap. So, by example, like, Alpha Picks the market cap has to be over $500 million. PQP has a lot of smaller companies in it, and it has a lot of international companies in it as well. So, if you’re looking at the full list of 30 stocks, compared to the number of stocks in the Alpha Picks, there will be variation, but there’ll be some crossover.

DS: Alright. James had written in a specific question that he wanted me to ask you, so I wanted to make sure we got to this one as well. He said, he’s curious about if your Top Picks for 2026 incorporate the rapid growth of the aging U.S. population. Is it in your opinion that this will drive significant demand in healthcare and different sectors like that, housing, medical technology? Does any of that get factored in when you go to select these picks?

SC: It does not. Our model is a bottom up model. So, we’re looking at data points for each company versus its competitors. So, we’re really not incorporating themes like that. However, I will mention there are periods where themes play out and we’ll tend to see a lot of stocks in the same sector at the top of the model. And typically what will happen and when we started Alpha Picks, it was a great example. Energy stocks had been getting crushed, so the valuations were super cheap, but earnings were actually taking off. So, all of a sudden, we began to see a lot of energy stocks at the top of our screener during that period.

So, there will be a clustering effect at times if an industry has this turning point where value is cheap and growth is strong. We’ll tend to see some clustering. I’m actually seeing a little bit of a clustering effect right now. This is the first time since I’ve been running the Top 10 Picks that I’ve seen so many large cap stocks come to the top of the model. And I think one of the reasons why that happened is, as interest rates were coming down, you had really strong performance out of some small and mid-cap stocks during 2025, especially the latter half when the rates actually start to come down, and you had a sell-off out of the AI fears and overvaluation.

So, many of these AI oriented stocks actually became cheaper. So, what we’re facing here is, companies that look a little bit better on valuation, but as you could see from the revenue growth rates and the EPS growth rates, they are stellar. So, we’re seeing a bit of a clustering of these larger cap stocks, not the Mag 7. Okay? And to be clear, the growth rate for these companies is far stronger than the Mag 7, but these stocks were impacted to a certain extent. Again, many of them are close to the 52-week highs, but they did suffer some weakness during the fourth quarter when we had the AI overvaluation fears.

DS: Steve, there’s a lot of audience members here today that were blown away. I think I was personally as well, that there was no energy names within your Top 10 Stocks this year. And that I think there’s a lot of correlation throughout 2025, how people were always talking about data centers and how they’re going to be so energy hungry. Wondered if you have any thoughts about, why maybe an energy stock didn’t make this list?

SC: Yeah. We’re just not seeing strong enough growth from those energy companies. So, like, when we started Alpha Picks, the stocks were getting hammered, but there was actually fairly good growth from the energy companies. And that’s why there was such a clustering effect when we started Alpha Picks. Not seeing that right now. And I think, as people are aware, energy prices have actually been getting lower and lower. Even with what’s happening with Venezuela, you had a little bit of a pop in many of these energy stocks, but in reality, what it actually means is that there’s going to be more supply added to the market. And if you have a lot of supply, and I think the administration wants to see oil lower, and they’re going to pump as much as possible, that will mean potentially lower earnings for these companies. So, that’s why we’re not seeing a lot of energy stocks at the top.

DS: Alright. Well said. Well said. There was a question here. Why are stocks in the Quant model compared to their sector and not their industry?

SC: Very, very good question. So, in our Quant model, we need a lot of data, and often industries are too small. So, sometimes there’ll only be 5 or 10 companies in an industry where sectors will have many more companies. So, in order to decipher the weak companies from the strong companies, we take a look at the sector because there’s more data points to assess. You can break it down to industry and that we do. So, we show where a company does rank in the industry, but in terms of the actual comparison, we’re using it against the sector because it gives us more data points.

DS: Well said. Alright. Following up here, can you explain why the Seeking Alpha system outperforms Wall Street analysts who have what they think are stronger tools for predicting markets? How do we achieve that outperformance?

SC: Well, I might be biased, but I think we actually have one of the strongest tools on Wall Street. This is a system that I created, and I didn’t just create it a couple years ago when Seeking Alpha acquired the company. I used to run a prop trading desk at Morgan Stanley. I worked there for about 14 years, and we developed these Quant strategies over a very long period of time. And I would put many of these Quant strategies up against Bridgewater and Renaissance, and I believe we have definitely shown stronger performance than many of those hedge funds. But what we have done through our Quant system is taking, in essence– which is almost like rocket science, and making it very user friendly for people to understand.

So, this way, when we go to any of these pages here, there’s a lot that goes behind the algorithm and the modeling, but we basically break it down so you could look at valuation, growth, and profitability, which are the, it’s sort of the mother’s milk to investing. You want a company that has a good valuation framework, good growth, good profitability, and we take all those data points and we boil it down to these grades so you get that instant characterization of where a company is compared to the rest of its sector. And that’s, in essence, what these big Quant Hedge funds do. They just don’t make it user friendly. And part of what I developed and why Seeking Alpha acquired my company is because we took something that was so advanced, we made it very user friendly.

DS: Yeah. We heard a whisper on the street that you’ve been around the block, and we figured you had in-depth knowledge, I guess.

SC: We definitely been on the block for a while.

DS: Just a little bit. Been in the industry just for a little bit. Steve, I was going to ask you real quick. Actually…

SC: Daniel, we lost you for a nano second. Can you repeat that?

DS: Yeah. I was going to follow-up. I was going to say maybe we can jump over to the platform for a second, and you can show people the screeners capability that the Quant system runs on and how you see these specific sectors that you were talking about earlier populating at the top of these screener charts?

SC: Yeah. So, here you could see the Top 10 Stocks for 2026. And what I’m going to do is, I’m going to scroll down to the Stock Screener, and you could actually see, well, there’s basically, you can create your own screens or look at Seeking Alpha’s pre-baked screens, and you could look at All Stocks, Top Rated Stocks, Top Quant Dividend Stocks. There’s a lot of stocks by category. And if I select Stocks by Quant, this is a general screen. So, I’ve added additional levels, but these are all Quant Strong Buys.

So, there are a couple extra parameters that I use for picking my Top 10, but you’ll see Micron is at the top. Ciena Corporation is at the top. We scroll down a little bit. You’ll see Celestica, Barrick Mining. And, again, I’m looking to add a little bit of diversification sectors as well. So, you’ll see many of these stocks Coherent at the top of the stock screener. So, again, we’re looking for Quant stocks that are Strong Buys, and we provide these wonderful screening tool that really helps you.

So, you don’t need me to be here at the beginning of January presenting. You can come on this anytime. It is still a lot of work, and that’s why we created Alpha Picks and the PRO Quant Portfolio where we do the work for you. But if you want to do the work on your own, any single day, you can go to any of these screeners. And even if you want to say, if you’re interested in just say technology stocks, you could scroll down or small cap stocks, top growth stocks, top healthcare stocks, top technology. You could just click here.

So, you could look at different sectors, and we break it down for you by technology or consumer staples or energy, and you’ll see a ranking on the stocks. So, if there’s a particular sector that you like, you have the ability to do it. So, that’s technology stocks. As I scroll down, you will see that there’s the healthcare stocks, consumer staples. Here’s consumer discretionary. I’ll click on that. You can see General Motors tops the list there. Wayfair, number 3. Vince Holdings, number four. GTX, Garrett Motion, number 5. So, lots of different ways for you to pick stocks. If there’s a particular sector that you believe in at the time, we give you the ability to do that.

DS: And just a reminder to everyone that the Quant system is running daily before the market opens, hours before the market opens even. So, all of those data points are updated every single day. So, you may see those screens change every single day. So, something to keep on…

SC: Absolutely.

DS: Because I saw some questions in here about that as well. Alright, Steve. We got to talk about the Top 10 Picks, though, that you presented here today. People are wondering, is there a methodology? How long do I Hold these stocks? Do I Sell these stocks? What do we lay out with the Top 10 Picks that we present here today?

SC: Okay. So, you could see there’s a Quant rating here. Alright. I myself have the stocks from top – from 2025, all the stocks that have a Hold, I still own those stocks. I often say, a Hold does not mean Sell. And in fact, in our Alpha Picks product stock will stay – could be a Hold for a 180 days before we sell it. So, sometimes the valuation will get a little bit expensive and it becomes a Hold, but often the stocks can continue to do well because the growth is so strong. What I will tell you is, if you load up the stocks on this portfolio, and I would definitely encourage you to do that, you create the alerts. If any of these stocks goes to Sell or Strong Sell, that’s when I get rid of it.

DS: Steve, do me a favor and click on that manage alerts button real quick just so we can show people, the pop-up that pops up and how you can set the Quant Rating alerts. Right? That’s…

SC: Right there. That easy.

DS: Go and click that on the portfolio. That’s why I highly encourage everybody, at least go put these 10 names in a portfolio on your Seeking Alpha account. You’ll also get the breaking news and everything else to keep an eye on these companies, but that is a powerful feature right there as well.

SC: Yes. As soon as it changes, you’ll get an email on it.

DS: There you go. Alright. Steve, question is always popping up. We answer it pretty frequently, but we got to let the people know here now as well. Why don’t we just turn these into ETFs?

SC: Well, we’re not an asset manager. We provide investment research. Asset management’s an entirely different business. Brokerage is an entirely different business. So, we’re here to provide people with the best investment research we can, whether that’s through our Seeking Alpha contributors or our Quant grades or our REIT grades or our ETF grades. There’s a lot of research on the platform, and it’s basically a subscription fee. So, you can join Premium at, I believe, $299 for the year. I don’t think you’re going to find another source of investment research that costs as little. I will tell you, if you had a Bloomberg machine, you’d be paying close to $30,000 a year. FactSet, you’d probably be paying close to like $10,000 a year. Reuters could be maybe close to $20,000 a year. This is $299.

And I tell you, there’s a big difference between our system and their systems. Their systems provide you with absolute data points. We actually interpret those data points for you. So, when you look at the ratings, you’re not going to get this out of Bloomberg or FactSet or Reuters. We actually give you that instant characterization of how a stock compares to the rest of its sector. And this is an incredible proprietary tool that you have on the Seeking Alpha platform that you don’t get from other providers and vendors that are far, far more expensive. So, I’m quite proud of the system we developed here.

DS: Yeah. I mean, I’ve seen it. I’ve seen [Audio Gap] to see it as well. Make sure you guys still got me.

SC: You’re still there. We got you.

DS: Okay. Cool. So, let’s dive a little bit into the Quant system here for a second. I think it’s worthy for us to do this in the time we have remaining. So, does the Seeking Alpha Quant system factor anything like technical analysis or the analysis ratings of the Seeking Alpha Analysts? Does it look at any of that when trying to calculate the score?

SC: It does not look at technical analysis, but what we do look at is a momentum grade. And many people will consider this form of analysis where we’re looking at the momentum of a stock relative to its competitor, to its sector. So Ciena Corporation here, we’re looking at a three month, six month, nine month, and one year basis. So these are actually four different factor grades that we’re looking at because each time period is different. And you could see on a momentum basis, the stock is up a 195%, compared to the sector up 0.36% over the last year. And even over the last three months, Ciena is up 61% versus the sector actually down 6.39%.

So, we’re measuring that momentum. Momentum does play to a certain extent into technical analysis, but this is really more of an indirect relation. It’s not a direct technical analysis.

DS: Alright. Good to know. And then, before we talk about this next question, I want to mention as well, there was a great question I need to point out real quick. Alpha Picks is a separate product, everyone, from Premium and PRO. If you get the PRO level subscription at Seeking Alpha, of course, you get everything in Premium, but Alpha Picks is a standalone product. So, keep that in mind if you’re interested in any of those products.

One more question about the Quant system, Steve, is the five factor grades. People always look at these grades. I think they try to do a little bit of reverse engineering on you a little bit. They’re trying to figure out how did we come to this grade with five factor grades. And I think I’d like you to just take a little bit of second, if you will, to tell the people, how it’s not equally weighted.

SC: They are not equally weighted. That is correct. So, there’s a bit of proprietary analysis behind the model, which comes from my experience. And I’ve learned over time that certain factors are more predictive than others. So, we weight it accordingly. Having said that, we want diversification. So, let’s say, we click on the valuation. This is really a cool part of the tool here. If you’re in the portfolio tool, you go to valuation for a particular stock. You actually just click on the grade, and it will bring you to this valuation page. So, you could see the overall value grade is B+, but you’ll see some diversification here in the actual underlying metrics.

Some are C, some are D+, some are D, some are A+. We have back-tested these metrics for many, many years. So, we have an idea of which ones are more predictive in terms of future stock price performance. So, we place a higher weight on the ones that are more predictive and a lower weight on the ones that are not as predictive, but they are all important factors, and we do want that diversification.

And I will say this in a number of different ways. When you look at diversification, whether it’s through market cap or through styles, diversification is very important. It minimizes your risk, and it maximizes your long-term potential. So, I will often say, one of the reasons why our model has that GARP approach where we’re looking at value, growth, profitability, momentum, and analyst revisions is we want that diversification. Because sometimes growth works, sometimes momentum works, sometimes profitability works, and we want to make sure that we’re collectively strong on all of those metrics.

DS: Yeah. And, Steve, if I can mention as well, I think that’s why people like, we like you. We trust you. We know you put these 10 picks together. It’s a diverse portfolio, and we don’t expect every single one to work, but we do expect to have those winners, which we coined the term Winner’s Circle, which started with Alpha Picks, is, you do have those stocks that enter the Winner’s Circles with massive returns that make the entire portfolio work, which I think we all really appreciate. And there was a request in here that we dive a bit more into dividends, and we’ll do that in the webinars to come this year, everyone.

So, please stay in touch with us here on Seeking Alpha. If you’re watching the replay, you’re seeing all the replays here on Seeking Alpha’s Video Hub. You can always find the webinars replays, and Steve even has his own playlist. We call it Quant Research where we’re putting out webinars here about the Quant system and stock ideas throughout the year.

So, Steve, we’re pretty much at the end of time here. I’m going to go ahead and let everybody have their last five minutes back, but I just wanted to give you an opportunity. We’re kicking off a brand new year. Everybody’s hoping for the best. We know it’s a mid-term year. We know there’s geopolitical stuff going on in the world, and we’re all looking for hope and hopefully some nice value return. Is there anything you want to leave everybody here watching today? Maybe like that last one little thought to keep in mind.

SC: Yeah. No. First off, I want to thank you, thank everybody at Seeking Alpha for helping to put this webinar together. Took a lot of members to do it. And just as importantly, I want to thank all the viewers for attending this presentation today. I hope you find it useful. As I indicated during the presentation, markets can be volatile. Don’t pay attention to the volatility. Try to stay consistent. Be in there buying stocks every single month, whether it’s good news or bad news. It’s particularly when the bad news is out there and the stocks are falling apart, that it’s the most important time to be buying securities, and that will provide you with your best returns as we indicated to that one chart, where we looked at the last five market corrections. So, just stay consistent and best of luck to everyone in their investing for 2026. Thank you very much.

DS: Well said, Steve. Well said, and everybody, one last time, I’m going to hit you because it’s a reminder greets importance. Put these 10 picks into a Seeking Alpha Portfolio. You’re not going to regret it. But that’s going to wrap it up for us here today. Everyone, Top 10 Stocks of 2026 from Seeking Alpha. Thank you for the time, watching and hanging out with us today and jumping into the chat. Appreciate all of you being here. Take care.

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