Steven Cress' Top 10 Stocks For H2 2025

Steven Cress, Seeking Alpha's Head of Quantitative Strategy, detailed the significant outperformance of their proprietary quant system, which employs a GARP-plus methodology, noting its Strong Buy recommendations have returned 294% over five years against the S&P 500's 94%. He introduced the new PRO Quant Portfolio, an actively managed, weekly rebalanced product with a backtested 10-year return of 1,632% versus the equal-weighted S&P 500's 162%, designed for diversified, global high-conviction stock selection across all market caps. For H2 2025, the firm unveiled its top 10 picks, including international financials like Barclays and Prudential, IT firms such as Credo Technology, and materials companies like New Gold, emphasizing their strong fundamentals and potential for outperformance amidst ongoing market volatility, AI-driven trends, and evolving macroeconomic conditions.

Analysis

The market is navigating significant volatility driven by a push-pull dynamic between positive catalysts like the AI-driven technology boom and negative pressures from tariff policies and interest rate uncertainty. According to Steven Cress of Seeking Alpha, a flight to safety during an April market correction disproportionately impacted stocks with strong fundamentals, but these stocks rebounded as fear subsided. The firm's quantitative strategy, described as a GARP-plus model focusing on sector-relative value, growth, profitability, momentum, and EPS revisions, has demonstrated significant historical outperformance, with its 'Strong Buy' recommendations reportedly returning 294% over five years versus the S&P 500's 94%. The top 10 stock picks for H2 2025 are drawn from a new, actively managed PRO Quant Portfolio and are characterized by global diversification and strong fundamental metrics. Selections include international financials like Barclays (BCS), which has a 28% forward EPS growth rate and a 0.41x PEG ratio, and Prudential (PUK), which saw analyst revision grades flip from 'F' to 'A'. The list also features high-growth tech firms like Power Solutions (PSIX), an AI infrastructure beneficiary up 835% in one year, and deep-value plays such as CommScope (COMM) with a 4.6x P/E ratio. The inclusion of two gold miners (NGD, GFI) and the fact that four of the ten stocks offer dividend yields higher than the S&P 500 suggest an implicit hedge against ongoing market uncertainty.

Key Decisions for Investors

• Investors could consider the ten highlighted stocks, which are products of a quantitative system with a strong historical track record of outperforming the S&P 500 and are screened for superior growth, value, and momentum characteristics.
• The list provides an opportunity for portfolio diversification beyond US large-caps by including international ADRs like Barclays (BCS) and Prudential (PUK), materials stocks (NGD, GFI), and US small-caps (PSIX, BKTI).
• Monitor the highlighted GARP characteristics, paying attention to the deep value presented by stocks like CommScope (COMM) and the high-growth profiles of names like Brinker (EAT) and Credo (CRDO), which the model has identified as attractive.
• Given the acknowledged market volatility and the inclusion of high-momentum and small-cap stocks, investors should be prepared for potential drawdowns and consider position sizing carefully, as fundamentally strong stocks can experience sharp, albeit temporary, declines during market-wide risk-off events.