Markets

A Major Tailwind Could Push This 30%-Gainer Even Higher

We're only a quarter of the way through 2015 and our Alpha Trader picks have been delivering incredible gains for our readers.

Today, I want to show you eight stocks that have broken out since the beginning of the year. Some of these winners are long-term positions that are making big runs, while others are fresh entries that have soared since we purchased them.

Many are still buys today with plenty of upside left, but either way they prove a point -- Alpha Trader can help you crush the market .

Take a look at the chart below. It shows the total returns several of our top picks have generated thus far in 2015.

As you can see, these eight stocks are crushing it in 2015. Their average year-to-date return is a whopping 31%, compared to the S&P 500's 1% return. That's a difference of 30 percentage points in just a few months.

These gains are not only impressive, but they show the Alpha Trader system is doing exactly what it is designed to do: find the strongest stocks in the market with less risk than buy-and-hold investing.

See, by using a proprietary combination of two of the market's most effective triggers -- one technical trigger and one fundamental trigger -- the Alpha Score shows us which stocks are likely to have the strongest uptrends.

But to make sure you lock in these incredible gains, it's important that you follow two key rules of successful trading. The first is letting your winners run. The second is selling when the trend changes.

Let me explain...

When a stock's momentum dries up you know it's time to sell. This prevents you from letting your gains dissolve. But if the stock has a major tailwind propelling it higher, why miss out on potentially bigger returns by selling too soon?

In the table above, you can see that the majority of the year's biggest winners have come from two of our Alpha Trader portfolios: Extreme Growth and Defensive (only one came from our Half-Priced Stocks portfolio which covers top-rated, undervalued stocks in the market).

These stocks have largely come from market-leading sectors. Four of our biggest winners this year come from the healthcare and biotech industries, while two more hail from the technology sector. The rising tide in these groups has helped our subscribers earn some big gains over the last three months.

But while sector outperformance has been a factor, mergers and acquisitions have also been a major driver in several of our top performers.

For example, over the past two months, two of our top performers received major buyout offers. Another -- NXP Semiconductor (Nasdaq: NXPI ) -- made a move of its own to take over Freescale Semiconductor, one of the leaders in the industry. On March 2, shares blasted 17.3% higher on the news.

The market apparently loves the synergies between the two firms. The combined company will be the No. 1 automotive semiconductor supplier and also helps NXPI diversify across other markets.

And as you can see from this chart, NXPI got flagged by our Alpha Trader system late in 2013. Since then, the returns we've seen have been wildly impressive.

The massive $40 billion deal for Freescale speaks to NXP management's confidence in the health of the company and the industry as a whole. This is also bullish for semiconductors longer term.

The extremely low interest rate environment has helped propel the M&A market as cash-rich companies have been forced to find alternative methods to grow their money. For example, the Freescale takeover was a nearly all-cash deal.

From individuals to corporations, everyone today is searching for yields. Some companies (like NXP) have found better use for their money in strategic buyouts of competitors. The resulting business synergies outweigh the generally miniscule rates of return on cash.

And as I mentioned earlier, you could probably buy NXPI today and still enjoy upside. But it isn't our only holding that's been driven higher thanks to M&A news. Two of our other picks that received buyout offers posted gains of 42.6% and 52.7% in the first quarter of 2015.

All in all, I'd say it was a great start to the year for our portfolio. But if you missed out on these market-beating returns, don't feel like you've missed the boat. The Alpha Trader system has an incredible track record at finding the next big winner. And right now is the perfect time to learn how the Alpha Trader system can work for you, so you can ride the next big winners higher.

In the past, it's flagged a wide variety of stocks that have outperformed the S&P, including a cosmetics company up 16% in less than two months, an airline stock that delivered 83% returns in nine months and a healthcare company that shot up 52% in less than six months.

If you want to learn more about this powerful system, I've compiled a free report that explains how I use it to spot stocks before they make huge runs in a matter of weeks or months. Click here to access it now .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

© Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Street Authority

Founded in 2001 by industry veterans, StreetAuthority is a financial research and publishing division of Investing Daily. Our mission is to help individual investors earn above-average profits by providing a source of independent, unbiased — and most of all, profitable — investing ideas. Unlike traditional publishers, StreetAuthority doesn’t simply regurgitate the latest stock market news. Instead, we provide in-depth research, plus specific investment ideas and immediate action to take based on the latest market events.

Learn More