If you’re a big believer in the old “Buy Low, Sell High” philosophy, then what are you going to do in a market like this one? Stocks are routinely breaking records in a nearly decade-old bull market. In such an environment, it's time to try the newer “Buy High, Sell Higher” philosophy.
Stocks that are making new highs tend to continue moving even higher until something disrupts the trajectory. With no recession in sight and the economy humming along, the overall trend for stocks remains upward. So how do you find the stocks most likely to continue ascending? The best tool is the Zacks #1 Rank New Highs screen on Zacks Premium. You’ll find a collection of Strong Buy stocks that are making new highs and should continue to do so moving forward.
Below are three stocks that recently made the screen. But make sure to click on the link above to see the parameters of this list, along with more than two dozen stocks that passed the stringent criteria.
Marvell Technology Group Ltd. (MRVL)
Data is big business these days…and it’s only getting bigger. The need to store and transmit both wired and wireless data is paramount, and its right up the alley of Marvell Technology Group Ltd. (MRVL). The company is a leader in storage, networking and connectivity semiconductor solutions. Shares of MRVL have soared more than 70% over the past year on the increasing need for its services. It has easily outperformed the Semiconductor – Communications industry, which has jumped more than 45% in its own right over the past year. The space is also in the top 41% of the Zacks Industry Rank with the 105th spot out of 256.
Just last week, Marvell announced its fourth straight positive surprise as earnings per share of 20 cents in its fiscal first quarter topped the Zacks Consensus Estimate by 25%. The four-quarter average beat is now as high as 86.7%. Thanks to growth in the storage, networking and connectivity businesses, revenues jumped 11.5% year over year to $579.2 million. This result also beat the Zacks expectation of $570 million. Revenue is expected between $585 million and $615 million in the fiscal second quarter.
In the past week, six of eight covering analysts raised their expectations of this fiscal year (ending January 2018)…there were no downgrades. The Zacks Consensus Estimate has improved 8.4% in that time to 90 cents per share from 83 cents. If we go back over the past 3 months, analysts have boosted their expectations by 32.4%. The Zacks Consensus Estimate for next fiscal year (ending January 2019) is expected to grow more than 14% to $1.03 per share, which has advanced 5.1% in the past seven days.
Marvell Technology Group Ltd. Price, Consensus and EPS Surprise
Marvell Technology Group Ltd. Price, Consensus and EPS Surprise | Marvell Technology Group Ltd. Quote
Deere & Company (DE)
For four-and-a-half years now, Deere & Company (DE) has been releasing positive earnings surprises quarter after quarter…and it did so again just two weeks ago. DE is probably the only agriculture equipment company that’s also a household name, even if you don’t live on a farm or have a huge backyard. The public knows DE from its commercials, distinctive green and yellow products, and for having been mentioned in several country music songs. But while its dependability as an American staple is secure, so too is its reputation in the market after 18 straight quarterly beats.
Most recently, DE reported earnings per share of $2.49 for its fiscal second quarter, marking an approximately 60% improvement over the previous year. It was also 46.5% better than the Zacks Consensus Estimate, leading to a four-quarter average beat of more than 70%. Total sales of $8.29 billion was 5.2% on top of last year due to improved demand for farm and construction equipment. Net sales for equipment operations advanced to $7.26 billion from $7.107 billion. Moving forward, DE raised its equipment sales forecast to 9% for fiscal 2017 from 4% previously.
Earnings estimates have jumped over the past 30 days thanks to the strong report. The Zacks Consensus Estimate for this fiscal year (ending October 2017) has soared 29.4% in that time to $6.21 per share as 11 of 12 covering analysts raised their expectations. Our estimate for next fiscal year (ending October 2018) has increased 20.5% in that time to $6.71, which is also 8% better than what’s expected this fiscal year. Ten analysts revised higher for next year. There have been no downgrades.
Deere & Company Price, Consensus and EPS Surprise
Deere & Company Price, Consensus and EPS Surprise | Deere & Company Quote
Having beaten the Zacks Consensus Earnings Estimate for nine straight quarters, it was surprising that Caterpillar (CAT) had a real problem with sequential sales and revenue growth. It had been over two years since this farm and construction equipment manufacturer had same quarter growth on the top line. But that finally changed when it reported first-quarter results in late April. Afterward, practically every analyst covering the stock raised their estimates, as CAT’s incessant focus on cost reduction began to pay off.
The company’s bottom line was pretty impressive too. Earnings per share of $1.28 doubled the year-ago result and smashed through the Zacks Consensus Estimate by 106.5%. It was the 13th beat in the last 14 quarters and marked an average beat of 40.3% in the past four. Revenues of $9.8 billion also topped our estimates at $9.3 billion, while also improving 3.8% year over year. Just as importantly, CAT increased its sales guidance for 2017 to between $38 billion and $41 billion, compared to the previous range of $36 billion to $39 billion.
Analysts couldn’t wait to raise their expectations on CAT after this report. The Zacks Consensus Estimate for this year has climbed 33.7% over the past two months to $4.13 per share, as all 10 covering analysts revised higher. Likewise, the Zacks Consensus Estimate for 2018 has climbed 21.7% in that time to $5.15 per share, which is also nearly 25% better than what’s expected in 2017.
Caterpillar, Inc. Price, Consensus and EPS Surprise
Caterpillar, Inc. Price, Consensus and EPS Surprise | Caterpillar, Inc. Quote
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
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
Click for Free Marvell Technology Group Ltd. (MRVL) Stock Analysis Report >>
Click for Free Deere & Company (DE) Stock Analysis Report >>
Click for Free Caterpillar, Inc. (CAT) Stock Analysis Report >>
To read this article on Zacks.com click here.
Zacks Investment Research