4 Buy-Ranked Stocks with Great Track Records and Strong Outlook
Okay, so the markets are swooning this September, with the Dow Jones down 4.5% month to date, the S&P 500 down 6.3% and the Nasdaq, which is the worst of the three, down 8.5%. It’s clear that the lofty valuations in the tech sector had a whole lot to do with this weakness. So despite the strong growth prospects, nobody could resist taking in some gains. And this is a good thing.
For one, it means that many of us are holding cash that we can invest fruitfully.
And second, it has created additional opportunities to invest. Because it’s true that just as optimism creates a certain momentum, so does fear. This is what triggers a broader sell-off, especially when there’s other news feeding that fear. The delay in the vaccine is an example and the expected volatility related to the upcoming elections is another.
Without making light of the real danger of repeated COVID outbreaks and its impact on life and livelihood, we probably shouldn’t lose sight of the fact that a weak market is one in which we want to invest.
That’s why I’ve picked some stocks with good history and an even better future. No wonder that they all carry a Zacks Rank of #1 (Strong Buy) or #2 (Buy) and score high in terms of both value and growth, according to the Zacks Style Score system.
Let’s take a closer look-
Central Garden Pet Company CENT
The company doubles as a provider of branded and private-label pet supplies and lawn and garden supplies (58/42 split of revenues) to mass merchants, home improvement centers, lawn and garden nurseries, grocery stores, specialty pet stores, veterinarians’ municipalities, and other individual animal buyers. Its customers include PetSmart, PETCO, Walmart, Home Depot and Lowe’s. It operates in the U.S.
This Zacks Rank #1 company has a Growth Score of A and a Value Score of B.
Its 5-year track record shows a sales growth rate of 9.2% and an earnings growth rate of 15.1%.
The expected EPS growth rate for the current year is 21.9%.
Valuation: The current price-to-forward sales for the current year (P/S) multiple of 0.78X is closer to the median value of 0.72X over the past year than the high of 0.96X. There is room for appreciation in shares.
Mercury General Corp. MCY
This insurance company primarily caters to the auto market, but also offers homeowner, commercial property, mechanical protection, fire and umbrella insurance. It operates in California as well as Arizona, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas and Virginia.
This Zacks Rank #2 company has a Growth Score of B and a Value Score of A.
Its 5-year track record shows a sales growth rate of 5.1% and an earnings growth rate of 11.2%.
The expected EPS growth rate for the current year is 88.5%.
Valuation: The current P/S multiple of 0.65X is below the median value of 0.67X over the past year. The shares appear to have entered oversold territory.
MYR Group, Inc. MYRG
MYR Group is a holding company of leading specialty contractors serving the electrical infrastructure market throughout the U.S. and Canada. Its transmission and distribution customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors.
The Zacks Rank #2 company scores A for both Growth and Value.
Its 5-year track record shows a sales growth rate of 18.01% and an earnings growth rate of 19.11%.
The expected EPS growth rate for the current year is 24.5%.
Valuation: The current P/S multiple of 0.27X is between the median value of 0.24X and high of 0.31X over the past year. There is room for upside.
Sprouts Farmers Market, Inc. SFM
Sprouts Farmers operates everyday grocery stores with a focus on healthy foods and fresh produce. The stores are generally located in mid-sized and larger shopping centers, lifestyle centers and at times, in independent, single-unit, stand-alone developments.
The Zacks Rank #2 company scores B for Growth and A for Value.
Its 5-year track record shows a sales growth rate of 12.4% and an earnings growth rate of 15.0%.
The expected EPS growth rate for the current year is 69.6%.
Valuation: The current P/S multiple of 0.37X is below the median value of 0.41X over the past year. The shares look oversold.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Central Garden Pet Company (CENT): Free Stock Analysis Report
MYR Group, Inc. (MYRG): Free Stock Analysis Report
Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report
Mercury General Corporation (MCY): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.