Over the past month here at the Sunday Digest, I’ve been lining up my top bets for 2026:
- Rocket Cos. Inc. (RKT)
- Crispr Therapeutics AG (CRSP)
- Evolv Technologies Holdings Inc. (EVLV)
- Celanese Corp. (CE)
- Akamai Technologies Inc. (AKAM)
- PayPal Holdings Inc. (PYPL)
- FactSet Research Systems Inc. (FDS)
- Tronox Holdings PLC (TROX)
This list spans from the ultraconservative FactSet to the high-growth startup Evolv, and features virtually everything in between.
Healthcare… basic materials… tech…
In fact, the only common thread is that they’re all meant to be bought and held for at least a year for maximum returns. (I’ll be keeping you posted in the coming months on how these firms do.)
But I also realize not everyone is so patient. In fact, there’s plenty of evidence that faster-moving investors routinely outperform their buy-and-hold counterparts… provided they have a proven system that powers their trades. It’s why high-frequency traders can earn billions even as buy-and-hold investors make millions.
Nowhere is this clearer than at our partners at TradeSmith. Our quant-focused friends have created a system that has been running 50,000 tests a day across 33 years of stock market history. And it’s powered by a secret pioneered by a hedge fund that’s turned every $100 investment since its inception into $2.1 million.
Essentially, that means TradeSmith now has an algorithm that pinpoints the optimal times to buy and sell virtually any U.S. stock. And it does so with incredible accuracy that can help any short-term trader.
Here’s proof…
Exactly this time last year, I used an earlier version of their system to identify three stocks to buy for a short holding period. And here’s how they did over the following 30 days:
- Cheniere Energy Inc. (LNG): -3%
- DraftKings Inc. (DKNG): +10%
- Cloudflare Inc. (NET): +44%
- Average: 17%
If you held onto these stocks for the exact period recommended by TradeSmith’s algorithm (42 days on average), then you would have walked away with a 27% average return.
I’ve used this quantitative tool to find other winners as well, including O’Reilly Automotive Inc. (ORLY) (+10% in just over two months) and Hanesbrands Inc. (HBI) (+43% in a month). These are not isolated wins.
Now, our friends at TradeSmith believe we’re entering some of the best conditions yet for using their Trade Cycles algorithm, and they want you to be a part of that story. You can try out their software on the stocks you own by registering for a free, limited-time trial version here. They’re making it available ahead of their Prediction 2026 event, all about the seasonal patterns they say we need to be aware of as the year kicks off (more on that in a minute).
In the meantime, I’ll leave you with three more seasonal stocks to buy immediately, as a preview of their system.
Seasonal Stock No. 1: The AI Gem
The fourth quarter is a historically wonderful time for software firms. Managers at Fortune 500 companies all know that savings from one year can turn into permanent cuts the next, and so many use the opportunity to spend their “use it or lose it” budgets.
That’s particularly good news for AI firm ServiceNow Inc. (NOW), my first “seasonal” pick from TradeSmith’s tool in this update.
In short, ServiceNow is a rival of AI darling Palantir Technologies Inc. (PLTR). Both companies offer top-tier AI products that help customers make decisions, and Q4 is an excellent quarter for the pair.
However, the two companies differ in their market strategy:
- Palantir’s “secret sauce” is its ability to manage unstructured data. If you’re the U.S. Army with hundreds of suppliers using hundreds of different standards, then you need Palantir to pull this information together.
- ServiceNow’s edge is its broad portfolio of AI tools. The company has specific products aimed at IT, customer service, human resources, app development, supply chains, and more.
That means ServiceNow generates three times the sales of Palantir and is growing around 50% faster on a per-dollar basis. Its addressable market is far larger, and its product breadth makes cross-selling a breeze.
Best of all, TradeSmith’s system is flagging now as the perfect time to buy ServiceNow. Shares of the AI firm trade at their best valuations since 2023, and history says investors can expect double-digit gains if they buy and hold through February 17.
Seasonal Stock No. 2: The Media Spinoff
My second pick from TradeSmith’s seasonality tool this week is Versant Media Group Inc. (VSNT), a recent spinoff from Comcast Corp. (CMCSA) that took many of NBCUniversal’s cable channels (including USA Network, CNBC, E!, Golf Channel) and digital assets (Fandango, Rotten Tomatoes) along with it.
That’s because the fourth-quarter earnings season is also a phenomenal time for cable news companies. This is when advertisers mount their holiday-period advertising surge, creating a boost at Fox Corp. (FOXA), the Walt Disney Co. (DIS), and more. Here’s the graph for the former, which typically logs a 40% to 50% increase in revenues that quarter.
Versant Media is an even better bet because shares have gone through a post-spinoff selloff. The firm only became independent on January 5, and ETFs have spent the past two weeks dumping VSNT shares because it’s no longer part of the S&P 500 or Nasdaq Composite indexes. We saw similar selloffs in GE Vernova Inc. (GEV), Chemours Co. (CC), and Kenvue Inc. (KVUE) after they split from their larger parent organizations.
After that, spinoffs then typically recover sharply – 31.6% over 22 months, according to one study. Chemours shares rose 1,100% from their post-spinoff trough.
In addition, Versant has:
- An intact management team. Most of the NBCUniversal top brass migrated to the spinoff, including NBCUniversal Chairman Mark Lazarus
- Significant sports and news assets. The company is an attractive acquisition target thanks to its ownership of top-rated CNBC and exclusive rights to the Premier League, WWE Wrestling, NASCAR, the U.S. Open, and more.
- Low debt. Comcast avoided loading its spinoff with too much debt. Versant carries just $2.3 billion of net debt, which represents less than three years of net profits.
- Irresistible valuation. The post-spin selloff now prices VSNT at under 5X forward earnings and 4.5X cash flows, by my estimates.
Together, that suggests Versant could see a double-digit pop in the near term. Though the spinoff is too recent to have its own graph in TradeSmith’s system, its data for Fox Corp, Disney, Warner Brothers (WBD) and other media firms show investors should hold Versant through February 20.
Seasonal Stock No. 3: The Accounting Wizard
My final pick from TradeSmith’s tool this week is Intuit Inc. (INTU), a firm best known for its TurboTax offering. In fact, this tax accounting software is so central to Intuit’s business that the firm ends its fiscal year on July 31 to match the tax filing season.
Below, you can see how TradeSmith’s system has flagged that midyear period as a way to earn consistent 6.43% returns (green section in the middle of the graph).
Intuit also owns QuickBooks, an accounting platform designed for small businesses. Over the past several years, AI has turned this software into an “outsourced CFO,” allowing many small companies to run without a dedicated finance team. Business owners can simply ask QuickBooks’ AI to help automate its accounting, and the system does much of the rest.
The result is that Intuit is beginning to look like more typical software firms as well. Shares now rise going into calendar fourth-quarter earnings, creating a 6.11% bump in share prices (shown by the green section on the left side of the graph).
I’m particularly bullish on Intuit this year because many provisions of the One Big Beautiful Bill impact the 2025 accounting and tax year. These changes include:
- No tax on tips or overtime
- Additional senior deductions
- Trump savings accounts
- Restoration of 100% bonus depreciation and certain R&D expensing
- And so on.
In other words, Intuit’s performance this year could look much like its 2017-2018 surge, when the Tax Cuts and Jobs Act (TCJA) boosted demand to all-time highs. Shares jumped more than 80% during that period. That makes Intuit’s 13% selloff this week an excellent opportunity to buy in cheaply. The system recommends holding shares through February 25.
The Importance of a System
In the 1980s, hedge fund Bridgewater Associates almost went bankrupt after founder Ray Dalio made a mistake in his global macro forecasts. He expected a depression to happen after Mexico defaulted on its debt… and he turned out to be flat wrong.
Dalio was forced to lay off all his employees and rebuild his firm from scratch.
For his second try, Dalio used a more formal investment approach – something that would turn into the Pure Alpha strategy in 1991. This data-driven method involved strict investment rules, model-based signals, and a lot of computing power to churn out decisions.
It was wildly successful.
Today, Bridgewater Associates is one of the world’s largest hedge funds with almost $100 billion under management. Its flagship fund has returned 12% annually since 1991, turning every $10,000 invested into almost a half-million dollars.
The TradeSmith system puts a similar strategy in your back pocket. Rather than guess which assets will go up or down (as Dalio did before 1982), TradeSmith’s algorithms give you the tools to make decisions based on historic data.
You don’t even have to take my word for it.
TradeSmith has made a version of their Seasonality software available for you to explore now.
They’ve unlocked access so you can see the seasonal “green days” for thousands of stocks ahead of their Prediction 2026 event. (reserve your spot by going here).
It kicks off Tuesday, Jan. 20, at 10 a.m. ET. During that event, the folks from TradeSmith will be getting into more detail about the fast-approaching seasonality patterns you need to be aware of.
They’ll also walk you through how they uncovered these patterns, why they persist even in chaotic markets, and how you can use them to guide real-world trading decisions. Click here to save your seat for that free event.
Please note that the InvestorPlace offices and the U.S. stock market will be closed on Monday in observance of Martin Luther King Jr. Day.
I’ll see you here next Sunday.
Thomas Yeung, CFA
Market Analyst, InvestorPlace
