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These are D.A. Davidson’s favorite stocks for the fourth quarter

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D.A. Davidson listed its favorite long-term plays, giving investors a way to stick it out as markets face a tough month and quarter. Equities have dropped in recent months as investors worry about the possibility — and effect — of persistent interest rate hikes. As of Wednesday’s close, the S & P 500 is slated to finish the month down 5.2% and the quarter is off about 4%. D.A. Davidson analysts provided quality names that are positioned to outperform years into the future, they wrote in a Thursday note, adding that the firm aims to cover durable companies that preferably trade at a significant discount to their “intrinsic value.” Companies had to also fit the firm’s criteria, which included having a robust and predictable revenue stream, sizable market with favorable long-term trends and a track record of high performance. Take a look at some of the names that made the cut. Analyst Rudy Kessinger is bullish on cybersecurity solutions provider CrowdStrike Holdings , which has attracted growing investor confidence given the company’s “Charlotte” generative artificial intelligence technology unveiled earlier this year. The stock has seen some of the highest year-to-date gains on the list, up more than 54% in 2023. The company is also a favorite of Goldman Sachs, which maintained its buy rating and raised its price target on the stock to $195 from $175 on Monday. Financial services companies F.N.B. Corporation and Axos Financial are other long-term favorites listed by the firm’s analysts. F.N.B. has dominant market share in its smaller markets and strong positioning in its larger markets, allowing it to steal market share from larger banks in some regions, analyst Manuel Navas wrote. The stock has plunged nearly 19% so far this year, putting it at an attractive entry point for long-term gains, according to the firm’s investment philosophy. Axos Financial, which is the holding company for nationwide Axos Bank, has an “enduring moat” with its unique one-branch operating structure that is a cost advantage relative to other institutions, according to analyst Gary Tenner. The stock has dropped 3.6% this year. D.A. Davidson is also confident in software firm Workday despite headwinds facing the company. The stock plunged 9% Thursday after management lowered its outlook for subscription revenue growth, dragging down its gains of more than 24% this year. Other firm-wide favorites include wood-alternative materials provider Trex , retailer Tractor Supply and Microsoft .

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