5 Solid Long-Term Growth Stocks to Invest in Right Now
Investors always focus on adopting strategies to ascertain above-market returns. However, if the company grows at the market's projected growth rate, the stock’s returns will be in line with market.
Thus, to stay ahead of the curve, investors need to pick stocks with strong earnings growth potential.
On Jul 11, 2016, the S&P 500 index hit an intraday high of 2,143.16, soaring 220% from the all-time low the market slipped to in Mar 2009. Moreover, the S&P 500 and the Nasdaq Composite Index have gained over 2% each over the last month backed by the following factors.
Oil Price Rebound
Crude oil, which is a major indicator of global economic growth, suffered a massive setback when the commodity touched a 13-year low of $27 a barrel in Feb 2016 due to a supply glut. However, the commodity recovered significantly and touched the $50 per barrel mark after most of the leading oil producers hinted at an impending cut on crude production.
In the second quarter, WTI crude hovered mostly between $40 per barrel and $50 per barrel, making a gain of nearly 26% sequentially. The surge in benchmark crude was also driven by supply outages in Nigeria, Libya, Venezuela and Canada – countries that hold some of the world’s major sources of crude.
Improved Job Statistics
As per the Bureau of Labor Statistics (BLS), upward revision in the U.S. GDP growth estimate by 1.8% as well as 287,000 job additions in Jun 2016 – as against the consensus estimate of 180,000 – has raised optimism in the markets.
Is July Hike in Fed Rates Possible?
Although the rebound in labor market might raise expectations of the Fed refraining from further policy tightening in the near term, analysts remain skeptical as the pay growth at best is modest. We believe that the Fed would wait for the job market to stabilize further before reviewing its policy.
Also, the impact of Brexit on the global economy is yet to be realized and seems strong enough to keep the Fed away from hiking rates.
5 Stocks Worth Adding to Your Portfolio
Thus, to outpace market returns as well as to take advantage of the above-mentioned factors, we have used the Zacks Stock Screener to narrow down on stocks with solid prospects, sporting a Zacks Rank #1 (Strong Buy) or #2 (Buy) along with a Momentum Style Score of ‘A’. Our research shows that stocks with a Momentum Style Score of ‘A’ or ‘B’ when combined with a Zacks Rank #1 or 2 offers the best upside potential in the short term.
What makes these stocks even better bets is that all of them have long-term growth estimate of more than 20%.
Our first pick, QVC Group QVCAis engaged in marketing and selling a wide range of consumer products, primarily through live merchandise-focused televised shopping programs. The company also uses the Internet and mobile applications to expand its reach.
Analysts have become increasingly bullish on this Zacks Rank #1 company over the past month. In fact, the Zacks Consensus Estimate has moved up by 2.2% and 1.8% for 2016 and 2017 earnings, respectively. Additionally, long-term growth estimate of the stock is 20%.
Next on our list is Diversified Restaurant Holdings, Inc. SAUC. The U.S.-based restaurant company creates, develops, owns, and operates Bagger Dave’s Burger Tavern, a full-service restaurant and full bar that specializes in burgers, fries, beers, ice cream and milkshakes, adult shakes, sommelier-selected wines, and other items. Moreover, long-term growth estimate of this Zacks Rank #1 stock is 20%.
Nippon Telegraph and Telephone Corporation NTT, which provides fixed and mobile voice related services, IP/packet communications services, telecommunication equipment, system integration, and other telecommunications-related services in Japan and internationally, is also worth investing in.
The Zacks Consensus Estimate for 2016 earnings has scaled nearly 16.3% over the last 30 days. Moreover, long-term growth estimate of this Zacks Rank #1 stock is 20.65%.
Another safe pick at the moment would be Rex Energy Corporation REXX– an independent oil, natural gas liquid, and natural gas company in the Appalachian and Illinois basins in the U.S.
Moreover, this Zacks Rank #2 company has been witnessing an upward revision in earnings estimates. Notably, the Zacks Consensus Estimate for earnings in 2016 and 2017 has increased 5.1% and 8.9%, respectively, over the last 30 days. Additionally, long-term growth estimate of the stock is 25%.
Last but not least, independent oil and natural gas company Parsley Energy, Inc. PE, which engages in the acquisition, development, production, exploration, and sale of crude oil and natural gas properties in the Permian Basin in West Texas and Southeastern New Mexico, is a good investment option.
Analysts have been highly optimistic about this Zacks Rank #2 stock over the last month. The Zacks Consensus Estimate has increased 4.8% for earnings in 2017.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NIPPON TELE-ADR (NTT): Free Stock Analysis Report
LIBERTY M INT-A (QVCA): Free Stock Analysis Report
REX ENERGY CORP (REXX): Free Stock Analysis Report
PARSLEY ENGY-A (PE): Free Stock Analysis Report
DIVERSIFIED RST (SAUC): Free Stock Analysis Report
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