Wall Street is having a dream run for nearly five months. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — rallied significantly in the last four months. While Wall Street historically remains muted in August, the markets are continuing their northbound journey this month, defying coronavirus-led woes.
However, year to date, the market is yet to fully recover from the pandemic-led devastations. The Nasdaq Composite is flying high and the S&P 500 recently recorded a fresh all-time high, erasing coronavirus-induced losses. However, the Dow is still in negative territory and way behind its all-time high recorded on Feb 12.
Meanwhile, a handful of corporate giants (market capital > $10 billion) have skyrocketed this year, braving the pandemic and its impact on businesses. Some of these are top-ranked Zacks stocks that have rallied more than 50% year to date.
Momentum Likely to Continue Despite Pandemic
The market's worst appears behind us as negative estimates are already factored in valuations. Although coronavirus-induced woes are persisting in the United States, causing occasional market fluctuations, the overall movement of Wall Street is likely to remain northbound.
Better than-expected second-quarter U.S. GDP and corporate earnings indicated that the pandemic-led devastations may not be as ruthless as previously expected. Meanwhile, despite the second wave of COVID-19 since mid-June, a few important economic data for July that were released, namely the jobs data, the unemployment rate, manufacturing, services, vehicle sales, industrial production, and retail sales are encouraging.
Continued better-than-expected economic data for April, May, June and July despite the fact that the aggregate economy remained way below its pre-lockdown level of activities, vouch for the fundamental stability of the U.S. economy. This indicates a gradual return to the pre-pandemic level as more parts of it reopen.
Rally Becomes Broad-Based
The stock market's impressive performance is primarily being driven by the astonishing growth of the technology sector. However, the situation has changed in the past month. Cyclical sectors including consumer discretionary, industrials, basic materials and financials have overtaken the technology sector.
We believe the above-mentioned positives have set gains in motion for stocks from cyclical sectors. This does not however mean that the technology stocks will lag other cyclical stocks from now onward. Rather, along with the other cyclical sectors, technology will also hold its ground thanks to its inherent strength and growth potential.
Our Top Picks
We have narrowed down our search to seven large-cap stocks with more than 50% returns year to date. These stocks have strong growth potential and witnessed robust earnings estimate revisions in the last 7 to 30 days. Each of our picks sports 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 seven picks year to date.
Quidel Corp. QDEL develops, manufactures and markets diagnostic testing solutions for applications primarily in infectious diseases, cardiology and gastrointestinal diseases worldwide. The company has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 31.1% over the last 30 days. The stock price has soared 221.3% year to date.
Etsy Inc. ETSY operates online market places for buyers and sellers primarily in the United States, the U.K., Canada, Australia, France and Germany. Its online market places include etsy.com and reverb.com. The company has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 84.7% over the last 30 days. The stock price has jumped 196% year to date.
The Boston Beer Co. Inc. SAM produces and sells alcohol beverages primarily in the United States. Aside from its flagship Samuel Adams Boston Lager beer, it offers various beers, hard ciders and hard seltzers under the Samuel Adams, Twisted Tea, Angry Orchard Hard Cider and Truly Hard Seltzer brands. The company has an expected earnings growth rate of 35.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 26.7% over the last 30 days. The stock price has climbed 123.7% year to date.
Generac Holdings Inc. GNRC designs, manufactures and sells power generation equipment, energy storage systems, and other power products for the residential and light commercial and industrial markets worldwide. The company has an expected earnings growth rate of 11.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved by 26.1% over the last 30 days. The stock price has rallied 80.1% year to date.
Apple Inc. AAPL designs, manufactures and sells iPhone, iPad, iPod, Apple TV, Mac personal computers, Apple Watch, HomePod and AirPods. These devices are powered by iOS, macOS, watchOS and tvOS operating systems. The company has an expected earnings growth rate of 8.7% for the current year (ending September 2020). The Zacks Consensus Estimate for the current year has improved 4.6% over the last 30 days. The stock price has appreciated 57.6% year to date.
Barrick Gold Corp. GOLD is engaged in exploration, mine development, production, and sale of gold and copper properties. It has ownership interests in gold mines located in North America, South America and Africa. The company has expected earnings growth of 80.4% for the current year. The Zacks Consensus Estimate for the current year has improved 9.5% over the last 30 days. The stock price has surged 55.9% year to date.
QIAGEN N.V. QGEN is one of the world’s leading providers of technologies and products for the separation, purification and handling of nucleic acids DNA/RNA. The company has expected earnings growth of 44.8% for the current year. The Zacks Consensus Estimate for the current year has improved 10.1% over the last 7 days. The stock price has advanced 55.1% year to date.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Apple Inc. (AAPL): Free Stock Analysis Report
QIAGEN N.V. (QGEN): Free Stock Analysis Report
Quidel Corporation (QDEL): Free Stock Analysis Report
Barrick Gold Corporation (GOLD): Free Stock Analysis Report
The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report
Etsy, Inc. (ETSY): Free Stock Analysis Report
Generac Holdlings Inc. (GNRC): Free Stock Analysis Report
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