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Barrage of Strong Economic Data to Power Markets: 5 Picks

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The month of April has been traditionally encouraging for stocks. And this time around, it’s no different. In fact, the Dow Jones Industrial Average finished above the 34,000 mark for the first time on Apr 15, while the broader S&P 500 closed at a record high, its 22nd time this year.

U.S. stocks are actually scaling northward on a slew of upbeat economic reports, a tell-tale sign that the economy has been able to recuperate from the drubbing it took due to the coronavirus pandemic, particularly last year. What’s more, such promising economic developments are widely expected to help the stock market maintain its bullish trend in the near future.

As rollout of coronavirus vaccinations picked up pace and businesses started to reopen, there has been a momentous surge in consumer outlay. As mentioned in a WallStreet Journal article, per the Commerce Department, sales at U.S. retailers climbed 9.8% last month. Sales at stores, restaurants, and even online purchases witnessed the largest gain since last May, thanks to the government’s stimulus measures and $1400 checks provided to households.

Additionally, household outlays are expected to improve as consumers’ confidence touched a one-year high last month. As mentioned in a Bloomberg article, per the Conference Board, its consumer confidence index touched 109.7 last month from 90.4 in February, the sharpest one-month jump in nearly 18 years.

In the meantime, the labor market is up and running. The Labor Department said that jobless claims declined to 576,000 last week compared to 769,000 the previous week, as cited in the WallStreet Journal article. In March, the jobless rate fell to 6%, as cited in another Bloomberg article. Simultaneously, U.S. employers added a whopping 916,000 new jobs last month, the Labor department added, citing a MarketWatch article.

At the same time, the manufacturing and service sectors of the U.S. economy have been expanding for quite some time now. U.S. industrial production that mostly measures factory, utility, and mining output bounced back in March following a decline in February. As quoted in a CNBC article, the manufacturing index of the Institute of Supply Management climbed to 64.7% in March from 60.9% in February. ISM’s non-manufacturing activity index also increased to its highest reading of 63.7% last month (read more: 5 Stocks to Gain From Sharp Pick-Up in Service Sector Activity).

Hence, with the economy recouping from the coronavirus onslaught, the stock market is expected to move upward in the near term. Thus, investing in solid growth stocks at the moment seems judicious. We have selected five such stocks that currently possess a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Growth Score of A or B.

AstroNova, Inc. ALOT provides data visualization technologies. The company currently has a Zacks Rank #2 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has risen 36% over the past 60 days. The company’s expected earnings growth rate for the current year is 88.9%.

Astec Industries, Inc. ASTE is a leading manufacturer and marketer of road building equipment. 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 6.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 14.3%.

The Brinks Company BCO is the global leader in total cash management, secure route-based logistics and payment solutions including cash-in-transit, ATM services, cash management services (including vault outsourcing, money processing and intelligent safe services), and international transportation of valuables. 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 up 16.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 23.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

TopBuild Corp. BLD is an installer and distributor of insulation and other building products to the U.S. construction industry. 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 13.1% north over the past 60 days. The company’s expected earnings growth rate for the current year is 33.2%.

The Estee Lauder Companies Inc. EL is one of the world's leading manufacturers and marketers of skin care, makeup, fragrance and hair care products. The company currently has a Zacks Rank #2 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has risen 0.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 44.7%.

Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

Download FREE: How to Profit from Trillions on Spending for Infrastructure >>


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
 
Astec Industries, Inc. (ASTE) : Free Stock Analysis Report
 
The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report
 
AstroNova, Inc. (ALOT) : Free Stock Analysis Report
 
Brinks Company The (BCO) : Free Stock Analysis Report
 
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