The Federal Reserve’s June 2015 Federal Open Market Committee (“FOMC”) meeting has given a boost to the already optimistic market sentiments. The key driver was the Fed’s assurance on at least one interest rate hike before the current year ends.
For the remaining year, the Fed forecasted moderate expansion of the U.S. economy. The GDP is anticipated to grow 1.8%–2.0% in 2015 below the previous outlook of 2.3%–2.7%. Also, the economy is expected to grow at the rate of 2.4%–2.7% in 2016 and 2.1%–2.5% in 2017.
While the first-quarter economic contraction and concerns over the prevailing cyclical weakness in the labor market played a large part in the declining growth expectations, the favorable impact of falling oil prices, improving job market and on-track inflation rate continued to keep the hopes high.
As the global economy remains uncertain, modest growth expectations for the U.S. economy are enough to tempt investors to explore opportunities in the local market. The improvement in stock markets could be observed with several stocks reaching their 52-week highs, setting the momentum for the economic growth expected to follow.
Why Stocks Reaching 52-Week Highs Could Be Good Bets
The 'old-school' investors may be wary of purchasing stocks that have already bumped up their year-long highs. However, high valuations and rise in share prices do not always mean that the stock has reached its potential limit.
A strong price increase implies robust demand for the stock, which is often explained by either a good earnings performance or some positive news, which may further boost the stock price. This may carry the momentum forward a little longer, making it the ideal time for investors to get on board.
Zacks Style Scores Back-up
With the help of our new style score system, one can locate stocks that have a solid upside potential.
While our Growth Style Score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth, our Momentum Style Score is an indication of the time to buy a stock to benefit from continuously rising share prices.
Our research shows that stocks with Style Scores of ‘A’ or ‘B’ when combined with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities.
3 Stocks to Consider
With the help of the Zacks Rank and our style score system we have zeroed-in on 3 stocks that are trading near their 52-high levels, but still have plenty of upside left. All these stocks sport a projected EPS growth rate (F1/F0) of 20% or higher.
Echo Global Logistics, Inc. ECHO, headquartered in Chicago, IL, is a leading provider of technology enabled transportation and supply chain management services, delivered on a proprietary technology platform, serving the transportation and logistics needs of its clients. The stock is currently trading near its 52-week high of $34.35:
Zacks Rank: #1
Growth Score: A
Momentum Score: A
Projected EPS Growth: 28.40%
Based in Raleigh, NC, INC Research Holdings, Inc. INCR provides the full range of Phase I to Phase IV clinical development services for the biopharmaceutical and medical device industries. The company’s shares are presently trading near its 52-week high of $42.45:
Zacks Rank: #1
Growth Score: B
Momentum Score: B
Projected EPS Growth: 91.14%
Nutrisystem, Inc. NTRI offers an at-home weight loss program based on portion-controlled, lower Glycemic Index prepared meals, weight loss plans, and private telephone and online support. Shares of this Fort Washington, PA-based company are trading near its 52-week high of $25.47:
Zacks Rank: #1
Growth Score: A
Momentum Score: B
Projected EPS Growth: 33.33%
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
Be the first to comment