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Investors gravitate toward the same stocks to their detriment, a new report indicates.
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Companies that Wall Street analysts disagree about tend to outperform over time.
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Here are 30 stocks that analysts are split about right now, according to UBS.
There’s an old saying that remains relevant to investors: If we all think alike, no one is thinking.
Groupthink is prevalent everywhere, including on Wall Street. With the exception of a few outspoken contrarians, investors tend to ride the stock market’s momentum instead of going against the grain since missing a massive rally can be costly — especially for fund managers.
However, picking the same stocks as everyone else can hinder outperformance.
Stocks that equity analysts agree either have a bright or dismal future have historically lagged behind those that the Street is split on, according to a mid-March report from UBS.
The firm found that companies with a higher so-called ratings dispersion from analysts have beaten those with low dispersions by 1.6% a year since the end of 2010. High-dispersion stocks have outperformed their low-dispersion peers 74% of the time in that span, UBS noted.
For reference, high-ratings-dispersion stocks’ returns are better than high growth over low growth and high momentum over low momentum. Even still, this strategy is usually overlooked.
Within this high-dispersion strategy, companies tied to technology or adjacent sectors tend to perform best, according to UBS. Another reason to consider this method is that it has a low correlation to other stocks, which is a risk-management plus.
30 stocks that Wall Street is split on
Since analyst alignment can be a bad omen for companies, it follows that investors should look for firms that can spark debates among those who follow them.
Below are 30 stocks with the highest dispersion in ratings from analysts, sorted alphabetically by sector and within their sector, if applicable. Along with each name is its ticker, market capitalization, and sector. Note that UBS doesn’t necessarily recommend these companies.
1. Electronic Arts
Ticker: EA
Market cap: $36.6B
Sector: Communication Services
2. Paramount Global
![Paramount Global](https://investorempires.com/wp-content/uploads/2024/03/1710391920_242_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: PARA
Market cap: $8.1B
Sector: Communication Services
3. Verizon Communications
![Verizon Communications](https://investorempires.com/wp-content/uploads/2024/03/1710391920_579_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: VZ
Market cap: $169.4B
Sector: Communication Services
4. Warner Bros. Discovery
![Warner Bros. Discovery](https://investorempires.com/wp-content/uploads/2024/03/1710391920_47_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: WBD
Market cap: $21.7B
Sector: Communication Services
5. CarMax
![CarMax](https://investorempires.com/wp-content/uploads/2024/03/1710391920_697_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: KMX
Market cap: $13.1B
Sector: Consumer Discretionary
6. Carnival
![Carnival](https://investorempires.com/wp-content/uploads/2024/03/1710391920_771_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: CCL
Market cap: $21B
Sector: Consumer Discretionary
7. Ford Motor
![Ford Motor](https://investorempires.com/wp-content/uploads/2024/03/1710391920_459_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: F
Market cap: $49.4B
Sector: Consumer Discretionary
8. Lululemon Athletica
![Lululemon Athletica](https://investorempires.com/wp-content/uploads/2024/03/1710391920_449_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: LULU
Market cap: $56.8B
Sector: Consumer Discretionary
9. Pool
![Pool](https://investorempires.com/wp-content/uploads/2024/03/1710391920_403_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: POOL
Market cap: $15.5B
Sector: Consumer Discretionary
10. Tesla
![Tesla](https://investorempires.com/wp-content/uploads/2024/03/1710391920_869_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: TSLA
Market cap: $538.8B
Sector: Consumer Discretionary
11. APA Corp.
![APA Corp.](https://investorempires.com/wp-content/uploads/2024/03/1710391920_71_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: APA
Market cap: $9.8B
Sector: Energy
12. EQT Corp.
![EQT Corp.](https://investorempires.com/wp-content/uploads/2024/03/1710391920_501_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: EQT
Market cap: $15.1B
Sector: Energy
13. American Express
![American Express](https://investorempires.com/wp-content/uploads/2024/03/1710391921_280_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: AXP
Market cap: $161.4B
Sector: Financials
14. Ameriprise Financial
![Ameriprise Financial](https://investorempires.com/wp-content/uploads/2024/03/1710391921_428_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: AMP
Market cap: $41.6B
Sector: Financials
15. CME Group
![CME Group](https://investorempires.com/wp-content/uploads/2024/03/1710391921_985_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: CME
Market cap: $78.6B
Sector: Financials
16. Comerica
![Comerica](https://investorempires.com/wp-content/uploads/2024/03/1710391921_223_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: CMA
Market cap: $6.9B
Sector: Financials
17. Northern Trust
![Northern Trust](https://investorempires.com/wp-content/uploads/2024/03/1710391921_467_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: NTRS
Market cap: $16.8B
Sector: Financials
18. PNC Financial Services
![PNC Financial Services](https://investorempires.com/wp-content/uploads/2024/03/1710391921_541_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: PNC
Market cap: $60.9B
Sector: Financials
19. Align Technology
![Align Technology](https://investorempires.com/wp-content/uploads/2024/03/1710391921_120_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: ALGN
Market cap: $24B
Sector: Healthcare
20. Amgen
![Amgen](https://investorempires.com/wp-content/uploads/2024/03/1710391921_159_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: AMGN
Market cap: $148.3B
Sector: Healthcare
21. Edwards Lifesciences
![Edwards Lifesciences](https://investorempires.com/wp-content/uploads/2024/03/1710391921_655_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: EW
Market cap: $55.5B
Sector: Healthcare
22. Illumina
![Illumina](https://investorempires.com/wp-content/uploads/2024/03/1710391921_345_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: ILMN
Market cap: $21.1B
Sector: Healthcare
23. Steris
![Steris](https://investorempires.com/wp-content/uploads/2024/03/1710391921_699_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: STE
Market cap: $23B
Sector: Healthcare
24. Vertex Pharmaceuticals
![Vertex Pharmaceuticals](https://investorempires.com/wp-content/uploads/2024/03/1710391921_618_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: VRTX
Market cap: $107B
Sector: Healthcare
25. Carrier Global
![Carrier Global](https://investorempires.com/wp-content/uploads/2024/03/1710391921_744_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: CARR
Market cap: $52.6B
Sector: Industrials
26. Caterpillar
![Caterpillar](https://investorempires.com/wp-content/uploads/2024/03/1710391921_924_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: CAT
Market cap: $170.9B
Sector: Industrials
27. Generac
![Generac](https://investorempires.com/wp-content/uploads/2024/03/1710391921_817_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: GNRC
Market cap: $7B
Sector: Industrials
28. Old Dominion Freight Line
![Old Dominion Freight Line](https://investorempires.com/wp-content/uploads/2024/03/1710391921_245_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: ODFL
Market cap: $47.8B
Sector: Industrials
29. Rockwell Automation
![Rockwell Automation](https://investorempires.com/wp-content/uploads/2024/03/1710391921_408_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: ROK
Market cap: $32.9B
Sector: Industrials
30. United Rentals
![United Rentals](https://investorempires.com/wp-content/uploads/2024/03/1710391922_156_History-says-these-30-controversial-stocks-are-likely-to-outperform.jpeg)
Ticker: URI
Market cap: $45.5B
Sector: Industrials
Read the original article on Business Insider