With the threat of a taper becoming larger by the day, some investors might be nervous about investing in the current climate. And with broad markets already up a ton so far in 2013, there is plenty of reason to be skittish about stocks that have been floundering over the past few sessions.
Fortunately, there are at least a few stocks out there that are still showing strong momentum figures and may be well positioned to continue marching higher heading into 2014. Plus, these companies have also seen a great trend on the earnings estimate revision front as well.
This means that analysts are becoming more bullish on these companies’ earnings prospects, and are expecting these firms to improve earnings in both the near and long term. Add this in to some strong Zacks Ranks, and investors could have a strategy for picking some winning stocks, no matter what happens with the Federal Reserve.
For investors looking for a few stocks that have met this criteria, we have highlighted three stocks below that have seen double digit price increases over the past month, and strong positive earnings estimate revision activity over the last 30 days as well.
These stocks should be able to have a Santa Claus rally of their own thanks to these solid fundamentals, and may be worth a closer look by investors seeking a way to play this market to close out the year:
HCI Group (HCI)
HCI is an insurance company based in Florida operating in the property and casualty segment. The stock has seen solid trading lately, adding over 12.6% in the past four weeks, along with a nearly 110% gain so far in 2013.
While this is obviously a huge increase, earnings have really kept up for HCI, as the forward PE is still below 10. Plus, the company pays out a solid yield of 2.3%, so it is a decent income choice as well.
If that wasn’t enough, the consensus estimate for HCI has also been soaring lately, jumping from 96 cents a share 30 days ago to $1.33/share today for the current quarter. Current year estimates have soared by 20.6% in the same time frame, suggesting that even with the huge price increase, there is plenty of reason to be optimistic about HCI going forward, especially considering that the stock has a Zacks Rank #1 (Strong Buy) as well.
E-Commerce China Dangdang (DANG)
This Beijing-based firm is a popular seller of a variety of goods includes books and electronic publications via its website, dangdang.com. The firm started off the year on a choppy note, but it has soared overall, adding more than 115% YTD, and adding more than 14% in the past four weeks alone.
Estimates have been surging for this company as of late too, with the current quarter consensus rising by over 16% in the past four weeks. The current year estimate has also been on the rise, moving higher by 22% in the past month, suggesting that analysts are becoming more optimistic on the company’s upcoming earnings.
If this wasn’t enough, DANG also has shown a solid history of beats at earnings season, including four straight beats of at least 18%. And, with a Zacks Rank #2 (Buy) and a positive Earnings ESP, there is plenty reason to be hopeful for another beat out of this company at its next earnings report, and more gains after that.
Home Inn & Hotels Management (HMIN)
HMIN develops and leases hotels across China and is headquartered in Shanghai. The firm hasn’t surged as much as the rest on the list from a YTD look—up about 40%– but it has started to accelerate lately, adding about 13.4% in the past month.
This company has also seen impressive results from its earnings estimate revisions, with the consensus sharply moving higher for the current year, including a nearly 16.5% increase in just the past month. HMIN is also in great company from an industry look too, as the hotel industry is in the top 3% overall.
And much like DANG, this hotelier has seen a great history from an earnings estimate look as well. The average beat over the past four quarters has been 120%, and with a top Zacks Rank to boot, this could be another solid pick that has strong winds at its back.
Bottom Line
Investors are rightfully fearful about the taper, and some might be looking to pull some capital off of the table. After all, many stocks have already seen a good run so far this year, and with markets staying more range-bound lately, some might want to take a more cautious approach.
However, there are a handful of stocks– such as those listed above– that still have strong momentum in this environment and could be solid picks. These companies have also seen great trends on their earnings estimate revisions as well, and thus may be well-positioned to see more gains in the weeks ahead too.
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