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Chicago, IL - October 19, 2015 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Hele of Troy ( HELE ), Smith & Wesson ( SWHC ), Inphi ( IPHI ), McDermott Intl ( MDR ) and Dycom ( DY ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Friday's Analyst Blog:
5 Stocks Fund Managers Are Buying
We are officially in the second half of October and that means one thing to me, college football is getting really good! Maybe you are not a fanatic like me, you might be all into the Cubs or something else. That got me thinking, if I were a fan of making money, what stocks would I be looking at for some near term gains?
First and Ten
The big idea about October, at least in the world of investing, is that it is the calendar year end for a lot of mega mutual funds. Those funds have lived through a bad September and there looks to be a solid recovery underway in October. The thinking boils down to this: if a fund manager was down coming into the month, the market is now moving higher and higher. The only way to make up that ground is to chase the strongest stocks.
Most of the funds will be buying mega caps, but the hedge funds will be doing the same thing in the world of smaller stocks. But which stocks are the ones they are buying?
Second Down
We can reasonably guess that fund managers are buying stocks that are near their 52 week high and have has some stellar performance already this year. The thinking is that these names has the momo-players on their side, so it would be an easy spot to grab some Alpha.
Due to the size of some of these smaller stocks, you also want some sort of insurance policy. I went with the idea of revenue growth as my insurance policy. These stocks are seeing revenue growth for this quarter when compared to the same quarter last year. Maybe it's the aggressive growth stock strategist that is my title, but I need to see sales increase to get me excited about any stock.
Third and Short
So I have stock performance on my side with solid YTD price gains and the stocks within 10% of their 52 week highs. I have the topline coming in higher than it was last year, now I am looking to the bottom line.
The strong suit of the Zacks Rank is that it tells me which stocks are seeing the best earnings estimate revisions. That really takes a lot of the guess work out of picking stocks, as these are the ones that the analysts are increasingly favorable towards.
Touchdowns, Not Field Goals
My screen netted 13 names, but from that I like these 5 the best:
Hele of Troy ( HELE ) a Zacks Rank #2 (Buy) and in the consumer discretionary space that has been very strong of late. HELE just reported earnings on October 8 and beat on the top and bottom lines.
Smith & Wesson ( SWHC ) as a Zacks Rank #1 (Strong Buy) it has seen estimates increase. This stock is up nearly 100% YTD and closed just 1% below its 52 week high recently. Add 15% topline growth to the equation and this stock hits the target.
Inphi ( IPHI ) is a Zacks Rank #1 (Strong Buy) and in the super-hot chip sector. Beyond the big deal that Intel had earlier we have seen plenty of rumors of other deals in that space. I don't expect IPHI to be bought out, I expect its shares to be on the short list of funds managers for its outstanding potential.
McDermott Intl ( MDR ) is a a Zacks Rank #2 (Buy) and focused on off shore oil and gas production. The price of oil seems to be stabilizing so we could see further investment in off shore production over the next several months. Fund managers like the 85% YTD gains and expected revenue growth of 120%.
Dycom ( DY ) is a Zacks Rank #1 (Strong Buy) and is in the construction-building subset, but is really focused on telecommunications infrastructure. DY is up 117% YTD and only 4% from its 52 week high.
Going For Two, Because We Cannot Go For Three
That headline comes from the great Woody Hayes, the legendary coach of THE Ohio State Buckeyes. They play Penn State this weekend and look for the Buckeye faithful to be dressed in all dark clothing as Buckeyes hold the first ever BLACKOUT at Ohio Stadium.
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HELEN OF TROY (HELE): Free Stock Analysis Report
SMITH & WESSON (SWHC): Free Stock Analysis Report
INPHI CORP (IPHI): Free Stock Analysis Report
MCDERMOTT INTL (MDR): Free Stock Analysis Report
DYCOM INDS (DY): 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
