Strong corporate results and data indicative of economic
strength helped stocks move upward in April. These factors helped
override the selloff in biotech and Internet stocks. With the
exception of the Nasdaq, all indices gained over the month. The
month's performance was more or less similar to stock movements
The S&P 500 gained 0.6% and the Dow moved up 0.8% in
April. However, intense selling pressure in biotech and Internet
stocks dragged the Nasdaq down. The tech-heavy index declined
significantly for the second consecutive month, by 2%.
Incidentally, the Nasdaq has moved up 1% so far this week and the
S&P 500 and Dow have each gained 0.8%
The S&P 500 and the blue-chip index ended in the green as
investors received better-than-expected corporate earnings
results. Also, encouraging economic data on factory activities,
retail sales, domestic industrial production and durable goods
helped the benchmarks finish higher.
A gauge of manufacturing sentiment in the Philadelphia region
and an increase in Conference Board's leading economic index also
added to the bullish sentiment. New deals in the health care
sector were also welcomed by the investors. Federal Reserve
Chairwoman Janet Yellen's assurance to keep the key interest
rates low for some time was also well received by the
GDP Data and the FOMC Policy Statement
At 0.1%, first quarter GDP growth was drastically lower than
expected. Harsh winter weather was cited as the primary reason
for slow growth in the first quarter. Economic activity is
expected to pick up pace on the back of strong retail numbers and
Meanwhile, the Federal Open Market Committee (FOMC) indicated
that economic activity has picked up since its last meeting in
March. The Federal Reserve said that despite harsh winter weather
in January and February, the economy has recovered of late.
The FOMC's policy statement also confirmed that the
bond-buyback program will be brought down to $45 billion a month.
The committee agreed to keep its federal funds rate low even
after the end of the quantitative easing program in order to
support the economy for some more time.
Earlier in April, the central bank had said the economic
stimulus program may end this fall and the key lending rates will
then be raised six months later. The central bank also mentioned
that it will rely on a 'wide range of information' on jobs as
well as inflation and not just the unemployment rate while
deciding on raising interest rates.
3 Star Performers for April
I ran a screen on
for companies with the following parameters:
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Research Wizard today
- Percentage price change over the last 4 weeks greater than
or equal to 20
- Forward price-to-earnings ratios (P/E) for the current
financial year (F1) less than or equal to 25%. This picks out
stocks that are good value choices
- Expected earnings growth for the current financial year
greater than or equal to 20
- Zacks Rank less than or equal to 2: This ascertains stocks
that have shown above-average returns over the last 26
(See the performance of Zacks' portfolios and strategies here:
About Zacks Performance
Here are the top 3 stocks among the 5 that made it through
Vertex Energy, Inc.
Vertex Energy, Inc.
) operates in the environmental services domain. The company
specializes in recycling industrial waste streams and those
commercial chemicals which are off-specification. It also
operates as a consolidator, refiner, and re-refiner of petroleum
streams in the United States.
Percentage price gain over the last 4 weeks = 33.28%
Expected earnings growth for FY2014 = 81.25%
Smart Technologies Inc. holds a Zacks Rank #1 (Strong Buy).
The stock's forward price-to-earnings Ratios (P/E) for the
current financial year (F1) is 15.53.
Abraxas Petroleum Corp.
Abraxas Petroleum Corp.
) is an independent energy company engaged primarily in the
acquisition, exploration, exploitation and production of crude
oil and natural gas. It seeks to complement acquisition and
development activities by selectively participating in
exploration projects with experienced industry partners.
Percentage price change over the last 4 weeks = 32.66%
Expected earnings growth for FY2014 = 211.67%
Currently the company holds a Zacks Rank #2 (Buy) and has a
P/E (F1) of 14.01.
Alliance Fiber Optic Products
Alliance Fiber Optic Products Inc.
) designs, manufactures and markets a broad range of high
performance fiber optic components. AFOP's products are used by
leading and emerging communications equipment manufacturers to
deliver optical networking systems to the long-haul, enterprise,
metropolitan and last mile access segments of the communications
Percentage price change over the last 4 weeks = 29.22%
Expected earnings growth for FY2014 = 42.7%
Besides a Zacks Rank #1 (Strong Buy), Alliance Fiber Optic
Products Inc. has a P/E (F1) of 15.08.
The Momentum for These Stocks Remain
Despite the decline in GDP growth, the economy is expected to
pick up momentum over the month. This has also been reflected in
other economic reports released recently. Only the Nasdaq
continues to play spoilsport, given the selloff in bio-tech and
In this context, the fact that the best performing stocks for
the month belong to other industry groups comes as no surprise.
Going forward the reasonably low price to earnings ratios and top
Zacks rank make these stocks good additions to your
ALLIANCE FIBER (AFOP): Free Stock Analysis
ABRAXAS PETE/NV (AXAS): Free Stock Analysis
VERTEX ENERGY (VTNR): Free Stock Analysis
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