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"Gesture of Good Will" Continues: 5 Strong Buys

Zacks Equity Research

China exempted 16 American products from tariffs and promised to buy more U.S. Agricultural goods. The United States reciprocated by delaying the tariff rise on account of the 70th anniversary of the People’s Republic of China.

Market saw another silver lining this week after both countries agreed to meet for trade talks in the beginning of October. Which are the stocks that are good buys in this situation, let’s have a look.

Trade War Seesaws

On Sep 11, the Chinese government issued a notice to exempt tariffs on 16 American goods that included shrimp, fish meal, grease and cancer treatment drugs. As per the official communication, the exemption will start from Sep 17 and continue for a year. In fact, Chinese importers can apply for refund on 12 products out of the 16 exempted.

Positive news on the trade war also came in from the other end as President Donald Trump agreed to delay tariff hike for two weeks as a “gesture of good will.” Trump announced that he will delay the 5% increase in tariffs from 25% to 30%, on $250 billion of Chinese goods for two weeks, from, the earlier scheduled Oct 1.

The U.S.-China trade war has been dampening the global economy for some time now and these conciliatory gestures from both sides will ease the tension. With trade talks likely to resume in the beginning of October and the foresaid exemptions and delay in tariffs, sentiments automatically got a boost.

The People’s Republic of China will be celebrating its 70th anniversary of the establishment on Oct 1. According to China’s vice premier Liu He, raising tariffs on Oct 1 “caused them grave concern on the symbolism.” In fact, China has also promised to buy more agricultural products from the United States.

The market is quite hopeful that the trade war will finally cease but U.S. Treasury Secretary Steven Mnuchin made it clear that the President is a negotiator and “he’s prepared to raise tariffs if we need to raise tariffs.” The gesture of delaying tariffs was due to China’s vice premier Liu He’s request. He specified that Trump can do a deal any time, “but he only wants to do a good deal.”

This trade war is impacting the overall economic growth of the global bigwigs. The market will keep going through a roller coaster ride till both parties decide to end it. Now that both have taken a step forward to shake hands pointing to a “gesture of good will” it is a good time that investors grab stocks and make the most out of it before any twist of events and things go south.

Grab These 5 Stocks Now

As the United States and China exchange conciliatory gestures, trade war worries seem to ease. So, buying stocks at this point will help your portfolio shine.

We have selected five stocks that flaunt a Zacks Rank #1 (Strong Buy) and Growth Score A. These stocks have positive growth over the last 60 days and are expected to have more return than the industry they are in. You can see the complete list of today’s Zacks #1 Rank stocks here.

MasTec, Inc. MTZ is a publicly traded company that provides construction services to the telecommunications industry in the United States. MasTec’s expected earnings growth rate for the current year is 32.4% compared to the industry growth of 9.2%. The Zacks Consensus Estimate for current-year earnings has improved 9.4% over the past 60 days.

Perficient, Inc. PRFT is a publicly traded digital transformation consulting company. Perficient’s expected earnings growth rate for the current year is 26.4% compared to the industry growth of 9.4%. The Zacks Consensus Estimate for current-year earnings has improved 6.9% over the past 60 days.

Rent-A-Center, Inc. RCII is a publicly company that engages in rent-to-own business helping consumers to make flexible rental purchase agreements with no long-term obligation. Rent-A-Center’s expected earnings growth rate for the current year is 113.2% compared to the industry growth of 3.5%. The Zacks Consensus Estimate for current-year earnings has improved 6.6% over the past 60 days.

Skechers U.S.A., Inc. SKX is a publicly company that designs, develops and markets a range of lifestyle and performance footwear for men, women and children. Skechers U.S.A.’s expected earnings growth rate for the current year is 17.2% compared to the industry growth of 10%. The Zacks Consensus Estimate for current-year earnings has improved 11.4% over the past 60 days.

Zumiez Inc. ZUMZ is a publicly company that designs, develops and markets a range of lifestyle and performance footwear for men, women and children. Zumiez’s expected earnings growth rate for the current year is 20.7% compared to the industry growth of 3.6%. The Zacks Consensus Estimate for current-year earnings has improved 14.3% over the past 60 days.

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Click to get this free report MasTec, Inc. (MTZ) : Free Stock Analysis Report Perficient, Inc. (PRFT) : Free Stock Analysis Report Rent-A-Center, Inc. (RCII) : Free Stock Analysis Report Zumiez Inc. (ZUMZ) : Free Stock Analysis Report Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research