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5 Top-Ranked ETFs & Stocks to Bloom in Spring

Sweta Killa

The customary step-up in economic activity across all sectors in Spring should inject fresh optimism in both business and consumer confidence.

The housing sector in particular is gaining momentum as lower mortgage rates and a slowdown in pricing growth has perked up interest in buying homes. Job growth rebounded in March with expansion of 196,000 in nonfarm payrolls and layoffs falling to the lowest level since 1969. Manufacturing activity accelerated in March, with 16 of the 18 sectors witnessing growth (read: U.S. Manufacturing Sector Grows in March: ETF & Stock Picks).

Further, hopes of a U.S.-China trade deal as well as a patient Fed will continue to boost the stock market, which saw the best start in many years. In fact, the S&P 500 Index is near all-time highs while the CBOE Volatility Index, often known as fear gauge, recently touched its lowest level in six months.

While value stocks have gathered attention lately due to a bleak earnings picture and global growth concerns, growth stocks have more upside potential in the coming months buoyed by spring fever. This is especially true as growth investing is basically a momentum play and a great strategy in a trending market (a market characterized by a prolonged uptrend).

Growth stocks refer to high-quality stocks that are likely to witness revenue and earnings increase at a faster rate than the industry average. These stocks harness their momentum in earnings to create a positive bias in the market, resulting in rocketing share prices. As such, growth stocks tend to outperform during an uptrend (read: 5 Ultra-Cheap Top-Ranked Growth ETFs to Buy Now).

Given this, investors should reposition their portfolio for more exposure to the growth space to obtain a nice momentum play. For them, we have presented five ETFs and stocks that are ready to bloom this spring.

ETF Picks

Using our database, we have selected growth ETFs that provide exposure to the broad stock market instead of a particular sector and have a Zacks Rank #1 (Strong Buy), or 2 (Buy). This is because these ranks suggest strengthening fundamentals and superior weighting methodologies that could lead them higher than their cousins in a booming market. Further, these funds have expense ratio of less than 10%, making them lower cost products in the growth space.

iShares Core S&P U.S. Growth ETF IUSG

This product provides low-cost exposure to a broad range of U.S. growth stocks, whose earnings are expected to grow at an above-average rate relative to the market.

Zacks ETF Rank: #1
Expense Ratio: 0.04%
AUM: $6.1 billion
No. of Stocks: 538

SPDR Portfolio S&P 500 Growth ETF SPYG

This fund offers exposure to S&P 500 companies that display the strongest growth characteristics.

Zacks ETF Rank: #1
Expense Ratio: 0.04%
AUM: $4.7 billion
No. of Stocks: 295

Vanguard Mega Cap Growth ETF MGK

This ETF targets the growth segment of the mega-cap space.

Zacks ETF Rank: #1
Expense Ratio: 0.07%
AUM: $4.2 billion
No. of Stocks: 121

Vanguard Mid-Cap Growth ETF VOT

This product offers exposure to mid-capitalization growth stocks (read: 5 Mid-Cap ETFs Scaling New Highs).

Zacks ETF Rank: #2
Expense Ratio: 0.07%
AUM: $6.1 billion
No. of Stocks: 171

Vanguard Small Cap Growth ETF VBK

This product offers exposure to small-capitalization growth stocks.

Zacks ETF Rank: #2
Expense Ratio: 0.07%
AUM: $8.9 billion
No. of Stocks: 623

Stock Picks

For stocks, we have chosen five stocks using the Zacks Screener that have a Zacks Rank #1 or 2, a Growth Score of A, double-digit earnings growth for the current fiscal year. Moreover, they belong to the top-ranked Zacks Industry (in the top 20%).
 
Lawson Products Inc. LAWS

This company is a distributor of expendable maintenance, repair & replacement products. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zacks Rank: #1
Zacks Industry Rank: Top 1%
Market Cap: $275.6 million
Fiscal Year Earnings Growth: 10.07%

Intuit Inc. INTU

It provides financial management and compliance products and services for small businesses, consumers, self-employed and accounting professionals.

Zacks Rank: #2
Zacks Industry Rank: Top 4%
Market Cap: $67.4 billion
Fiscal Year Earnings Growth: 17.11%

CrossAmerica Partners LP CAPL

This company is engaged in the wholesale distribution of motor fuels, consisting of gasoline and diesel fuel, and owns and leases real estate used in the retail distribution of motor fuels (read: Small-Caps Beat S&P 500 in Q1: 5 ETF Winners).

Zacks Rank: #1
Zacks Industry Rank: Top 13%
Market Cap: $638.2 million
Fiscal Year Earnings Growth: 554.55%

Square Inc. SQ

This company offers financial services and marketing services. It provides payments and point-of-sale, which include hardware and software to accept payments, streamline operations and analyze business information.

Zacks Rank: #2
Zacks Industry Rank: Top 18%
Market Cap: $31.6 billion
Fiscal Year Earnings Growth: 57.45%

Materion Corporation MTRN

Formerly known as Brush Engineered Materials Inc., Materion  through its wholly owned subsidiaries is engaged in the production and supply of high-performance engineered materials in the United States and internationally.

Zacks Rank: #1
Zacks Industry Rank: Top 18%
Market Cap: $1.19 billion
Fiscal Year Earnings Growth: 12.61%

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