5 Momentum Stocks to Buy for January After a Tepid December

Market Performance - U.S. stock markets experienced a significant rally in 2024, following a remarkable bull run in 2023, with the S&P 500 rising 23.3% last year after a 24.2% increase in 2023, marking a total increase of 53% over the two years, the best performance since 1997-98 [1] - The S&P 500 achieved 57 all-time highs in 2024, while the Dow and Nasdaq Composite rose 12.9% and 28.6% respectively last year [1] Recent Market Trends - In December, Wall Street struggled to maintain momentum, with the Dow dropping 5.3%, the S&P 500 falling 2.5%, and the Nasdaq Composite only increasing by 0.5% [2] Stock Recommendations - Five stocks are expected to maintain their momentum in January: Doximity Inc. (DOCS), Southwest Airlines Co. (LUV), Alaska Air Group Inc. (ALK), Dropbox Inc. (DBX), and Paramount Global (PARAA), all holding a Zacks Rank 1 (Strong Buy) and a Zacks Momentum Score of A [3][4] Company Insights Doximity Inc. (DOCS) - Doximity provides a digital platform for medical professionals, enabling collaboration and access to medical news and research [5] - Expected revenue and earnings growth rates for the current year are 13.4% and 14.5% respectively, with a 10% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [6] Southwest Airlines Co. (LUV) - Southwest Airlines is benefiting from increased air travel demand, anticipating a 5.5-7% year-over-year increase in fourth-quarter 2024 unit revenues [7] - The company is focused on cost-cutting and fleet modernization, with a strong liquidity position allowing for shareholder rewards through buybacks and dividends [8] - Expected revenue and earnings growth rates for the current year are 5.8% and 107.7% respectively, with a 4.5% improvement in the Zacks Consensus Estimate for current-year earnings in the last 30 days [9] Alaska Air Group Inc. (ALK) - Alaska Air Group is also benefiting from improved air travel demand, with total revenues increasing by 4% in the first nine months of 2024 [10] - The company is modernizing its fleet and has resumed share buybacks, with low fuel costs positively impacting its bottom line [11] - Expected revenue and earnings growth rates for the current year are 24.3% and 34.3% respectively, with an 8.7% improvement in the Zacks Consensus Estimate for current-year earnings in the last 30 days [12] Dropbox Inc. (DBX) - Dropbox is experiencing growth in its user base and average revenue per paying user (ARPU), with 18.24 million paying users and an ARPU of $139.05 [13] - The company has a strong balance sheet and generates significant free cash flow, with expected revenue and earnings growth rates of 0.2% and 9.6% respectively, and a 19.7% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [14] Paramount Global (PARAA) - Paramount Global operates in media, streaming, and entertainment, with a diverse portfolio including CBS, Showtime, and Nickelodeon [15] - The expected earnings growth rate for the current year is 54.7%, despite a negative revenue growth rate, which is projected to be 0.2% for next year, with a more than 100% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [16]