Though the U.S. stock market has hit a series of new highs in recent sessions, it has crawled up only a few points while trading volume is below average. The magnifier is thus placed on the case of the missing optimism, with investors losing confidence in the U.S. economy. In particular, the flurry of downbeat economic data, strong dollar, lower inflation and sluggish wage growth are pointing to the slow-moving economy.
Additionally, the Fed is on track to raise the interest rate for the first time since 2006 later this year if the world's largest economy continues to show improvement, though the path of rate hikes will be gradual. Amid huge volatility and uncertainty, investors have turned nervous about their investment plans and are looking for a better portfolio. For them, we have highlighted three solid picks with triple plays:
How to Create Solid Portfolio?
Momentum stocks look to be the major beneficiaries from the current market trend as these are expected to move higher with relative strength to the market and the industry. So, we have found out number of momentum stocks with the help of our new style score having Momentum Style Score of ‘A’ or ‘B.’
Further, we have added some flavor of growth and value to our research that led to the triple play effect. To accomplish this, we have used our Zacks stock screener and arrive at the three stocks that have a Zacks Style Score of ‘A’ or ‘B’ for Growth, Value and Momentum each. These when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best upside potential with a frenzy of strong momentum, cheap price and robust growth.
Investors could earn outsized returns by investing in these stocks in a short span:
Here Are Our 3 Picks
Cal-Maine Foods Inc. CALM
Momentum Score: A
Value Score: B
Growth Score: A
Zacks Rank: #2
Based in Jackson, Mississippi, Cal-Maine Foods is the largest U.S. producer and distributor of fresh shell eggs across the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States. It is primarily engaged in the production, grading, packing and sale of fresh shell eggs.
The stock has been gaining strong momentum over the past 12 weeks, returning over 53%. It is currently trading at a P/E ratio of 16.26, which is much lower than the industry average of 22.59. Earnings yield and cash flow/share are also higher at 6.15% and $3.03 versus the industry averages of 4.36% and $2.44, respectively.
Cal-Maine Foods is a growth company as it has seen earnings estimates rising by 30 cents over the past 60 days that would result in a whopping growth of 53.54% annually for fiscal 2015 compared to an industry average of 5.20%. As a result, Cal-Maine Foods is a triple play stock.
Orbotech Ltd. ORBK
Momentum Score: B
Value Score: A
Growth Score: B
Zacks Rank: #1
Based in Yavne, Israel, Orbotech is the world leader in designing, developing, manufacturing, and servicing automated optical inspection (AOI) systems for printed circuit boards (PCBs), liquid crystal displays (LCDs), and semiconductor devices in China, Taiwan, North America, Korea, Europe, Japan and internationally.
The company has seen solid earnings estimate revision from $1.17 to $2.03 per share for 2015 over the past 60 days. This represents a whopping year-over-year increase of 43.62% compared to the industry average of -11.43%. Having an incredible growth aspect, shares of ORBK, no doubt, look extremely cheap at the current levels, trading at P/E of 9.61, a massive discount to the industry average of 18.75 (read: Market Has Not Yet Noticed Potential in Orbotech; Have You?).
If this wasn’t enough, earnings yield of 10.43% and cash flow per share of $2.18 are impressive too when compared with the industry averages of 5.05% and $0.38, respectively. Further, the stock has good momentum, gaining 21.6% over the past 12 weeks, justifying its uptrend in the near term with a combination of growth and value aspect.
Outerwall Inc. OUTR
Momentum Score: B
Value Score: A
Growth Score: A
Zacks Rank: #1
Based in Bellevue, Washington, Outerwall provides the next generation of automated retail solutions primarily in the United States, Canada, Puerto Rico, Ireland and the United Kingdom. Its offerings consist of Redbox entertainment, where consumers can rent or purchase movies and video games from self-service kiosks, Coinstar money services where consumers can convert their coin to cash or stored value products at self-service coin counting kiosks and Rubi coffee kiosks.
The stock has shown solid momentum, rising about 22.7% in the past 12 weeks and is expected to continue moving higher in the next few days given the combination of some growth and value characteristics. This is especially true as the company’s earnings are expected to grow 28.5% annually for fiscal 2015 with current earnings yield of 10.66% and cash flow per share of $18.35.
These are well above the industry averages of 11.11% for earnings growth, 19.75 for P/E, 4.14% for yield and $18.35 cash flow per share (read: 3 Reasons Why Outerwall Is a Great Growth Stock).
Notably, the Zacks Consensus Estimate is currently pegged at $8.27 for fiscal 2015, up from $7.11 over the last 60 days.
Bottom Line
Showers of success and prosperity are few and far between. Yet, with the above-mentioned stocks, investors can fulfill their desires in the financial world with a one-stop shop offering a triple-play effect.
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 >>
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
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