"Know what you own, and know why you own it" - Peter Lynch
When it comes to the world of investing, nothing pays off better than having adequate, up-to-date knowledge about one's existing portfolio and revaluating it from time to time. This is precisely because being a cautious, resourceful decision maker can be far more rewarding than making risky, speculative forecasts.
Moreover, considering the present turbulent global market, it is necessary that one should take in stride the current global trends and act accordingly. After all, as Warren Buffett says: "Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble." Thus, we deem it necessary to guide our readers before they put in their money into a handful of stocks. Let us highlight (in brief) certain factors that have been impacting the global market in the recent past.
The Global Market Scenario
Multi-faceted macroeconomic events like the Chinese currency devaluation that triggered the consequent global sell-off; consistent oil price slump inducing a commodity price decline; geo-political tensions prevalent in the Middle-East; a declining unemployment rate resulting in the tightening of the U.S. labor market and the Fed interest rate hike has jolted the very essence of the global market, sending it off virtually on a roller-coaster ride. Further with the Iran nuclear deal finally in full execution, analysts fear to witness more oil price slump in the global market.
Even the U.S. economy, the strongest across the world, could not brace itself against the blow this time. This is evident from the recently released real U.S. GDP data, which increased 2% in the third quarter against a 3.9% hike in the prior quarter. To add to that, fresh geopolitical tensions in the Middle East are anticipated to have major global repercussions going ahead. The recent job cuts across Europe further depict a gloomy economic slowdown therein.
How's the Stock Market?
Against this backdrop, it is only natural to worry whether the world economy is inching toward another freefall as it did in 2008. No doubt, all these factors have made investors more conservative about overall investing, and not just in the stock market, which has lately felt the jitters of the turbulent global economy. This is evident from the 6.9% and 9.9% slump observed in the S&P 500 Index and Nasdaq Composite Index in the past one month.
However, as per latest statistics, the U.S. stock market is rebounding to a positive growth trajectory. Gains have been observed in consumer and utility shares, outweighing losses suffered by commodity stocks as oil resumed its tumble (according to Bloomberg). Evidently the S&P 500 Index inched up 0.5% yesterday, while the Dow Jones Industrial Average rose 0.2%. This apart, the Shanghai Composite Index rose 3.2%, reflecting a glimpse of possible growth redemption in the world's second largest economy.
Stocks in both Europe and Asia are looking up, and the U.S. dollar has appreciated following China's revelation of positive economic growth in 2015 (as per Reuters). In the wake of such positive events, we urge stock market investors to no longer stay away from spending money in equities.
However, caution must be exercised. Given the uncertainties still prevailing in the global economy at large, we advice our readers to look at growth stocks at the moment, considering that they are usually less sensitive to economic conditions in the broader market compared to their peers.
7 Winning Picks
For the sake of simplicity, we hereby select seven top-performing stocks that bear a Zacks Rank #1 (Strong Buy) or 2 (Buy), a Growth Style Score of 'A' or 'B', and for which current year's estimated EPS growth >=20% and year-to-date price change >0.
These growth stocks stood strong as year 2016 commenced, even as the global market took a plunge. They also exhibit strong fundamentals that make them lucrative investing units over the long term.
Cray Inc.CRAY : Seattle-based supercomputing company Cray, along with its subsidiaries, provides high-performance computing systems as well as data storage, management and analytics solutions. The company currently bears a Zacks Rank #1 and a Growth Style Score "A." Further, the company's estimated EPS growth for the current year is pegged at 67.7%, in line with the industry average. Year to date, Cray's share price is up a notable 4.6%, while over the long run, the company's EPS is expected to grow 20%.
CVSL Inc.CVSL : Texas-based CVSL is involved in direct-selling in the U.S. as well as international markets. The company's line of products range from home utensils, home décor products to nutritional supplements, gourmet food products, stationary and paper products, and others. The company currently bears a Zacks Rank #2 and a Growth Style Score "B". Further, CVSL's estimated EPS growth for the current year is pegged at 57.2%, better than the industry average of 11.8%. Year to date, CVSL's share price has risen 5.1%, while over the long run the company's EPS is expected to grow 20%.
Orthofix International N.V.OFIX : Orthofix is a Texas-based medical device manufacturer that offers reconstructive and regenerative orthopedic and spine solutions to physicians. The company currently bears a Zacks Rank #2 and a Growth Style Score "A." The company's estimated EPS growth for the current year is pegged at 37.2%, better than the industry average of 15.6%. Year to date, Orthofix's share price is up 1.2%, while over the long term, the company's EPS is expected to grow 20.8%.
Primo Water Corp.PRMW : North Carolina-based Primo Water Corporation provides multi-gallon purified bottled water, self-service refill water, and water dispensers in the U.S. and Canada. The company currently bears a Zacks Rank #2 and a Growth Style Score "B." The company's estimated EPS growth for the current year is pegged at a whopping 1,200%, significantly outpacing the industry average of 11.1%. Year to date, Primo Water's share price is up an impressive 9.3%, while over the long run, expected EPS growth is pegged at 20%.
Rentrak CorporationRENT : Portland-based Rentrak offers transactional media measurement and analytical services to the entertainment and media industries. The company currently bears a Zacks Rank #2 and a Growth Style Score "A." Further the company's estimated EPS growth for the current year is pegged at an impressive 580%, far better than the industry average of 20.5%. Year to date, Rentrak's share price has inched up 0.1%, while over the long term, the company's EPS is projected to grow 27.5%.
Sibanye Gold LimitedSBGL : Sibanye is the largest individual producer of gold from South Africa and is one of the ten largest gold producers globally. The company currently bears a Zacks Rank #2 and a Growth Style Score "B". Further, the company's estimated EPS growth for the current year is pegged at 78.5%, better than the industry average of 17.8%. Year to date, Sibanye's share price has gained 19.7%, while over the long run, the company's EPS is expected to grow 25.4%.
Carrols Restaurant Group, Inc.TAST : New York-based Carols Restaurant Group is the largest Burger King franchise in the world. The company currently sports a Zacks Rank #1 and a Growth Style Score "A." The company's estimated EPS growth for the current year is an impressive 475%, substantially better than the industry average of 17.9%. Year to date, Carrols' share price is up 6%, while over the long run, EPS is expected to grow 20%.
The Bottom Line
Given the currently stringent investment space, it would be rather foolish to spend money in stocks that witnessed a hike out of sheer fluke. After all, everything that glitters is not gold. Although the aforementioned stocks are not conventional stars in the investment space, nevertheless, they have managed to withstand the global stock market crash, and hence are definitely worth a grab.
The fundamental future growth parameters depict a similar picture for the days ahead. So wait not, and go ahead to grace your portfolio with these seven growth stocks right now!
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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.