Back to top

Image: Bigstock

A Wider Net Catches More Winners

Read MoreHide Full Article

Are you getting the most out of this bull market? Are you putting your money to work in the stocks with the highest potential for growth? At this stage of the game, investors are still in a "risk on" mode and searching for the right stocks.

You may think you can throw a dart and land on a stock that will outperform, but that is not the case. Although the outlook is pretty bright, not all stocks can outperform...that is just poor logic. There will be some stocks that just won't do as well as others, but which ones will they be?

Over the last several years I have seen big runs in this long term bull market. I see another bull run starting here and I want my portfolio to have the best exposure in order to maximize my potential return. Let's go over how I plan to change my stance over the next few weeks to have the best year I can.


Early Returns Are In

Maybe that headline will make you cringe as visions of a recent presidential election that might not have gone your way dance in your head. Trust me when I tell you that politics matter, but results are more important. I don't care what your politics are, I just want to show you where the early trends are pointing.

Continued . . .


------------------------------------------------------------------------------------------------------

Stocks Under $10 to Buy Monday

Zacks is now revealing its most compelling stocks priced under $10 per share (but perhaps not for long). These high-quality companies have prospects for gains of up to 2X and 3X.

Here's the best part: They offer (1) immediate growth potential and (2) the strong likelihood of long-term profitability.

Don't miss the special opportunity that ends midnight Sunday, April 9.

See Stocks Now >>

------------------------------------------------------------------------------------------------------


The first few months of the year have shown us what the rest of the year could look like. The big caps showed solid, steady gains throughout the quarter. The mid-caps did pretty good as well, but the small-cap names did the best. Just take a look at the outperformance of the NASDAQ vs the S&P 500 to see what I am talking about.

Of course just going after the Qs (the ETF for the NASDAQ) isn't the right answer either. There is a group of stocks that I am watching/investing in that is really moving. These are the stocks that I want to grab now and continue to invest in all year to maximize my gain.


Where The Winners Are

As noted above, some of my best winners are found in the world of low priced stocks. By nature, most of these names are smaller in market capitalization. That adds that extra degree of risk that we need to take in a "risk-on" market.

If you're going to outperform you need that extra risk, but lately these low priced names have already shown that they can deliver on the promise. The thing is I have been focusing on the low priced stocks that are not bottoming out or have just found their way to single digits. I am targeting the stocks that are low in price, moving higher and showing solid revenue growth.

I have seen several buyouts, as the big players grab the smaller fish as they start to show solid growth prospects. That is not to say I am looking only for M&A exits, it is confirmation of the strategy that I am employing.


Recent Change Still Happening

Now that I have a good feel for how things will pan out this year, I decided to make a small change to my portfolio. This strategy is based on the idea that I may be missing out. This is not to say that I have FOMO or fear or missing out. I just want to make sure that I capture as many of the outsized gainers as I can.

This idea is really a corollary to the old adage of diversification. We are spreading the risk out a little more as we look for MORE growth. It is not that we are screening out names based on some random level of revenue growth. Instead we are looking to increase our target portfolio size of 12-15 stocks up to 17-20.

Inevitably we will see some diversification as we widen our net to capture more fish. Yes, we are probably going to have to throw some back, but we will have a greater opportunity to find some small fish that are about to become big fish.


The Payoff

The basic idea of adding more stocks means that each holding will see less weighting. In essence, our current holdings will see some de-risking as we increase the number of positions. As we spread that risk to new positions we allow for more names that could possibly be among the top performers.

We leverage the Zacks Rank to find the best low priced stocks that are seeing positive earnings estimate revisions as well as revenue growth. This helps us select stocks that are seeing positive fundamental developments - but usually before a big move has taken place.

Over the last few months we have seen the low priced stock sector produce numerous big winners. The path is clear for more winners to come forward from that space. The more names your portfolio has that outperform, the more opportunities you will have to do what investors love the most, taking big profits!!


Low Priced Stocks, Sky-High Potential

Today I'm following several promising stocks with irresistible entry points in my Zacks Stocks Under $10 portfolio.

We focus on companies that are primed to make big upward moves. We get in when the Zacks Rank and other proven indicators point to success ahead, and ride them long and high.

In addition to checking out our long-term Stocks Under $10, you are also invited to download the ultimate short-term stocks. You can see them in our just-released Special Report 7 Best Stocks for the Next 30 Days absolutely free. From 220 Zacks Strong Buys, our experts handpicked the 7 most likely to break out immediately.

But a word of caution: Your chance to download this report for free ends at midnight Sunday, April 9.

See Zacks' Stocks Under $10 buys right now >>

Best,

Brian

Brian Bolan is our aggressive growth expert and the editor of the Zacks Stocks Under $10 portfolio.

Zacks Ultimate members can download the 7 Best Stocks for the Next 30 Days report here.