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"Leftover" Strategy Recaps S&P 500 Opportunities

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  Published in Stocks and Investing on Thursday, January 29th 2026 at 8:08 GMT by Seeking Alpha
      Locales: New York, Connecticut, California, UNITED STATES

The 'Leftover' Strategy: A Recap

The 'Thanksgiving leftover' strategy centers around pinpointing S&P 500 companies that either declined in value or significantly lagged the overall index performance during the Thanksgiving trading week. The premise is that temporary setbacks, often driven by holiday-related factors or short-term investor sentiment, can create an entry point for savvy investors anticipating a rebound. The logic assumes these declines aren't necessarily indicative of fundamental problems, but rather temporary dips that can be capitalized on.

Performance Review: November 2025 and January 2026

Looking back at November 2025, several companies initially flagged as potential 'leftovers' provided interesting case studies. Advanced Micro Devices (AMD), which experienced a minor decline due to intensifying competition from Intel, has seen a moderate recovery in January 2026. While Intel did release a competitive CPU line, AMD's strong foothold in the GPU market and continued expansion into the lucrative data center sector proved to be sufficient to mitigate the impact. The 'Buy' rating issued in the initial analysis appears justified, with shares up approximately 8% since the start of the year. The demand for AI processing power continues to bolster AMD's prospects.

Caterpillar (CAT), initially assessed as a 'Hold' due to concerns regarding slowing global economic growth, has performed as predicted. The stock has remained relatively stable, mirroring the mixed signals coming from the global manufacturing sector. While not exhibiting substantial growth, Caterpillar's robust free cash flow and diversified operations have prevented significant losses, making the 'Hold' rating a pragmatic call. However, analysts are increasingly watchful of trade policies that could impact construction and infrastructure projects.

The predictions for Best Buy (BBY) proved accurate. The company continued to face significant headwinds from online retail giants and evolving consumer spending patterns. The 'Sell' rating issued previously has been validated, with the stock experiencing a further decline of nearly 15% in January. Best Buy's attempts to bolster its online presence and expand service offerings haven't been enough to offset the competitive pressures. Consumer data indicates a continued preference for online shopping, impacting brick-and-mortar retailers like Best Buy.

General Electric (GE), also flagged with a 'Sell' rating, has unfortunately continued to struggle. While the company has made strides in streamlining its operations, legacy business challenges continue to weigh heavily. The stock remains down by 12% year-to-date, reinforcing the initial negative assessment.

Risk Factors and Evolving Market Dynamics

It's crucial to remember that the 'Thanksgiving leftover' strategy isn't foolproof. Investing in underperforming stocks always carries inherent risks. Unforeseen earnings disappointments, escalating industry-specific issues, or a broader economic recession can exacerbate existing problems. Furthermore, the market is increasingly influenced by factors beyond traditional fundamental analysis - algorithmic trading, social media sentiment, and geopolitical events all play a significant role.

One emerging risk factor is the increasing volatility surrounding interest rates. The Federal Reserve's monetary policy decisions continue to impact market sentiment, and any unexpected shifts could disproportionately affect companies with high debt loads.

Conclusion and Looking Ahead

The 'Thanksgiving leftovers' approach offers a potentially valuable lens through which to evaluate investment opportunities. However, it demands diligent research, a thorough understanding of the companies involved, and a keen awareness of prevailing market conditions. While the January 2026 performance validates the approach in some cases (AMD, Caterpillar), it also highlights the importance of a cautious approach (Best Buy, GE). For the remainder of 2026, investors should prioritize companies demonstrating adaptability, strong fundamentals, and the capacity to navigate an increasingly complex economic landscape. The strategy isn't about blindly buying underperforming stocks; it's about identifying companies with the potential to overcome temporary setbacks and deliver long-term value.