Stocks at Insane Valuations?

Hey, Ross here:

Despite the ongoing pullback…

The S&P 500 is still less than 3% away from all-time highs.

So you’d expect to see plenty of stocks trading at completely insane valuations.

Except we’re not.

In fact, one number underneath the index looks almost backwards.

Chart of the Day

This chart counts how many S&P 500 stocks are trading above 40 times forward earnings.

That is expensive by just about any standard.

Right now, only 27 stocks clear that bar.

Here’s the part that jumped out at me:

We saw similar numbers around the 2020 bear-market low…

And again near the 2022 low.

Today, the S&P is near an all-time high.

That’s a hell of a difference.

You’ve got the index sitting near records…

But the number of stocks trading at truly nosebleed multiples is sitting near levels we’ve seen after major selloffs.

So this market has gone a long way – without dragging hundreds of stocks into insane valuation territory.

And there’s a pretty good reason for that.

This is Citi’s U.S. Earnings Revisions Index.

When it’s above zero, analysts are raising earnings estimates more than they’re cutting them.

And it has now been positive for 21 straight weeks – the longest streak since 2021.

When this index is positive, analysts are raising earnings estimates more often than they’re cutting them.

So for roughly five months now, Wall Street has been steadily marking its numbers higher.

That means while prices may be elevated….

The earnings expectations underneath them have been climbing too.

But there’s something you should know about all these analyst revisions.

Insight of the Day

Wall Street analysts are often “behind the ball”

Analysts have been raising earnings estimates for 21 straight weeks. Great.

But they’re still reacting to new information as it comes in.

And that process doesn’t happen at the same speed for every company.

A business can start improving before the analyst models fully catch up.

Wall Street may still be working off assumptions that made sense three or six months ago while the people inside the company are already seeing something very different.

That’s where I start paying close attention to insider buying.

Because a CEO, CFO or director putting serious personal money into the stock isn’t revising a spreadsheet.

They’re making a trade.

And if they’re buying while the rest of Wall Street is still lukewarm on the company…

I want to know why.

And in just a few hours later today at 11 a.m. Eastern…

I’m going LIVE to show you how I separate routine insider buying from the purchases that can signal real conviction.

I’ll also show you several stocks insiders are buying right now that I believe could have major upside ahead.

This strategy has already pointed us toward opportunities that went on to gain 771% in two months… 157% in two weeks… and 321% in just two days.

Click here to guarantee your free seat for today’s LIVE session if you haven’t yet…

And I’ll see you at 11 a.m. ET.

P.S. If you’re planning to attend on a mobile device, make sure you download the presentation app now so you don’t miss anything when it starts. See you there.

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