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5 Top-Ranked Growth Stocks for February That Have Jumped YTD

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Nalak Das
·5 min read
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Wall Street is likely to close the month of January in positive territory after a fabulous 2019 that ended with the best performance in six years. Although stock markets fluctuated in the last few days following the outbreak of coronavirus in China, fundamentals of the U.S. economy remain strong.

Several eco-political positive developments strengthened investors’ confidence in risky assets like equities. Meanwhile, a few top-ranked growth stocks skyrocketed in January and still have strong upside left.  

U.S. Economy in Solid Foothold

A series of recently released economic data for December like retail sales, housing and manufacturing output confirms U.S. economic stability and clearly indicates that the historically longest expansionary phase is here to stay. Recovery of the housing industry in 2019 after a sagging 2018 is important since this industry generates around 3% of GDP.

On Jan 28, the conference board reported that its consumer confidence index for the month came in at 131.6, the highest since August 2019. December's index was also revised upward to 128.2 from 126.5 reported earlier. This clearly highlighted firmness in the U.S. economy.

Notably, the Expectations Index, which is a measure of consumers’ short-term (for the next six months) outlook for income, business and labor market conditions, increased to 102.5 in January from 100 in December.

The U.S. GDP growth rate did not fall below 2% in the first three quarters of 2019, buoyed by strong consumer spending, which constitutes more than 70% of the economy. The U.S. economy is expected to grow at 2-2.2% in the fourth quarter of 2019.

Wall Street Bull Run to Continue

Despite market volatility, Wall Street is still in the green in January. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are up 0.7%, 1.3% and 3.4%, respectively, year to date.

On Jan 29, after its FOMC meeting, the Fed stated that the GDP is likely to maintain this moderate growth rate in 2020. The labor market remains robust with strong job creation, a record-low unemployment level and growing labor force participation. The Fed maintained the benchmark lending rate at 1.5-1.75% and reaffirmed that it will not raise it until the inflation rate, which is currently at just 1.6%, crosses the Fed’s target level of 2%.  

Moreover, the recently signed phase-one trade deal between the United States and China has significantly cooled down the nearly two year old tariff war. Although a complete deal is not likely to be signed before the U.S. presidential election this November, the interim deal will at least help in restoring U.S. business confidence and global economic growth.

Our Top Picks

At this stage, it will be prudent to invest in growth stocks with a favorable Zacks Rank. We have narrowed down our search to five growth stocks with strong EPS estimate revision and future growth potential that popped in January. Each of our picks carries a Growth Score of A and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our five picks year to date.

Agilysys Inc. AGYS operates as a developer and marketer of hardware and software products and services to the hospitality industry in North America, Europe, the Asia-Pacific and India. The company has an expected earnings growth rate of 63.2% for the current fiscal year (ending March 2020). The Zacks Consensus Estimate for the current quarter has improved 100% over the last 30 days. The stock has rallied 31.7% year to date.

Tandem Diabetes Care Inc. TNDM is a medical device company that designs, develops and commercializes various products for people with insulin-dependent diabetes in the United States. The company has an expected earnings growth rate of 104% for the current year. The Zacks Consensus Estimate for the current quarter has improved 50% over the last 30 days. The stock has climbed 29.2% year to date.

Enphase Energy Inc. ENPH designs, develops and sells home energy solutions for the solar photovoltaic industry in the United States and internationally. The company has an expected earnings growth rate of 13.7% for the current year. The Zacks Consensus Estimate for the current quarter has improved 1% over the last 30 days. The stock has soared 24.6% year to date.

Forterra Inc. FRTA manufactures and sells pipe and precast products the United States, Canada and Mexico. It operates through Drainage Pipe & Products and Water Pipe & Products segments. The company has an expected earnings growth rate of 680% for the current year. The Zacks Consensus Estimate for the current quarter has improved 141.7% over the last 30 days. The stock has surged 20% year to date.

MagnaChip Semiconductor Corp. MX designs, manufactures and sells analog and mixed-signal semiconductor platform solutions for communications, Internet of Things, consumer, industrial and automotive applications. It operates through two segments, Foundry Services Group and Standard Products Group. The company has an expected earnings growth rate of 242.1% for the current year. The Zacks Consensus Estimate for the current quarter has improved 91.2% over the last 30 days. The stock has gained 18.2% year to date.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


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Agilysys, Inc. (AGYS) : Free Stock Analysis Report
 
FORTERRA INC (FRTA) : Free Stock Analysis Report
 
Tandem Diabetes Care, Inc. (TNDM) : Free Stock Analysis Report
 
MagnaChip Semiconductor Corporation (MX) : Free Stock Analysis Report
 
Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report
 
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