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5 Top Growth Stocks to Boost Your Portfolio Returns in Q2

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The stock market experienced a slight downturn on Apr 6 but that shouldn’t upset the overall bullish trend. This is because strong job data and a sharp pick-up in both services as well as manufacturing activities indicated that the U.S. economy has recuperated from the drubbing it took due to the coronavirus pandemic. Better economic growth, in turn, will help the stock market hit new highs.

In fact, the Dow and the S&P 500 are already trading near record levels as investors cheered faster-than-expected vaccine rollout and the Biden administration’s $1.9-trillion stimulus package to pep up economic growth.

Talking about economic growth, March’s widespread job additions indicated that the economy is up and running. Relaxation of business restrictions and the government’s coronavirus relief measures buoyed businesses and led to job additions. Last year, many businesses laid off workers as the government had implemented measures to curb the spread of the virus.

Nonetheless, U.S. employers added 916,000 jobs last month per the Labor Department, citing a MarketWatch article. The jobless rate also declined to 6%, in line with expectations, as mentioned in a Bloomberg article (read more: 5 Top-Rated Stocks to Ride a Blockbuster Jobs Report).

Other data released lately saw the U.S. service sector, which accounts for basically 70% of U.S. GDP, as quoted in a businessinsider article, register the fastest growth on record in March on increased demand for new orders.

As mentioned in the businessinsider article, the Institute of Supply Management’s (ISM) non-manufacturing activity index came in at 63.7% last month, the highest reading in the survey’s history (read more: 5 Stocks to Gain From Sharp Pick-Up in Service Sector Activity).

U.S. service sector gains are no doubt encouraging at the moment. This is because the services sector was for quite some time lagging behind the manufacturing sector and market pundits were eagerly hoping for recovery in industries like leisure, recreation, and restaurants that signify broader economic rebound.

The manufacturing sector, by the way, has been chugging along quite well. ISM’s index of national factory activity soared to a reading of 64.7% in March from February’s reading of 60.8%, the highest since December 1983, as mentioned in a CNBC article.

And as more Americans continue to grow optimistic about economic growth, consumers’ confidence touch a one-year high last month, a tell-tale sign that household outlays will improve in the near future and propel further economic growth.

Per the Conference Board, its consumer confidence index came in at 109.7 in March versus February’s reading of 90.4, the sharpest one-month climb in almost 18 years, as quoted in another Bloomberg article.

Thus, with economic growth widely expected to continue in the near term as well, the stock market has only one way to go, that’s northward. Hence, investing in fundamentally-sound stocks poised to move upward in the near future, specifically the second quarter, seems judicious at the moment. We have, thus, selected five such stocks that currently possess a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Growth Score of A or B.

The Goldman Sachs Group, Inc. GS is a leading global financial holding company providing investment banking, securities and investment management services to a diversified client base. The company currently has a Zacks Rank #1 and a Growth Score of B. The Zacks Consensus Estimate for its current-year earnings has risen 9.2% over the past 60 days. The company’s expected earnings growth rate for the current quarter is 27.2%.

Alphabet Inc. GOOGL has evolved from primarily being a search-engine provider to cloud computing, ad-based video and music streaming, autonomous vehicles, healthcare providers and others. The company currently has a Zacks Rank #2 and a Growth Score of B. The Zacks Consensus Estimate for its current-year earnings has advanced 0.6% over the past 60 days. The company’s expected earnings growth rate for the current quarter is 55.2%.

Alleghany Corporation Y engages in property and casualty (P&C) reinsurance and insurance businesses in the United States and internationally. The company currently has a Zacks Rank #2 and a Growth Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 9.3% over the past 60 days. The company’s expected earnings growth rate for the current quarter is way more than 100%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lennar Corporation LEN is engaged in homebuilding and financial services in the United States. The company currently has a Zacks Rank #1 and a Growth Score of B. The Zacks Consensus Estimate for its current-year earnings has moved 21.5% north over the past 60 days. The company’s expected earnings growth rate for the current quarter is 56%.

WilliamsSonoma, Inc. WSM is a multi-channel specialty retailer of premium quality home products. The company currently has a Zacks Rank #1 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has risen 23.5% over the past 60 days. The company’s expected earnings growth rate for the current quarter is more than 100%.

The Hottest Tech Mega-Trend of All                 

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


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