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5 High-Flying Growth Stocks to Buy Despite Inflation Concern
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Wall Street has been reeling under inflationary threats over the past month resulting in volatile trading. Growing concerns about the impending inflation have affected the growth-oriented sectors the most as these depend on easy access to credit at a cheap rate to expand their businesses.
A large section of market participants believes that any inflation in the near term may compel the Fed to change its easy-monetary stance and raise the benchmark interest rate from the current level of 0-0.25%, earlier than its own projection.
Despite mounting inflationary threats a handful of growth stocks with a top Zacks Rank is flying high in the past month and likely to maintain the trend for the rest of 2021 predominantly owing to their solid business model. At this stage, investment in these stocks is likely to be fruitful.
Growth Stocks to Benefit From Economy's Reopening
Growth investors are primarily focused on stocks with aggressive earnings or revenue growth, which should propel their stock price higher in the future. Consequently, a faster-than-expected reopening of the economy, easing of restrictions and a stiff decline in the average daily coronavirus cases will support growth stocks in equity markets.
On May 13, Dr. Rochelle Walensky — Director of the Centers for Disease Control and Prevention (CDC) — said American's who are fully vaccinated need not wear a mask or stay six feet away from others in most settings, whether outdoors or indoors, excluding travel. On May 26, the CDC permitted cruise line operators to conduct a simulated cruise with volunteer passengers. A few major cruise liners are set to start sailing in late June.
The data compiled by Johns Hopkins University revealed that the seven-day average of daily coronavirus cases in the U.S. fell below 25,000 for the week ended May 24. This happened for the first time since Jun 19, 2020. Moreover, on May 25, the CDC said about 49% Americans received at least one shot of COVID-19 vaccine 39% fully vaccinated.
On May 4, President Joe Biden announced that the latest target of his administration is to get 70% of U.S. adults receive at least one dose of a COVID-19 vaccine and have 160 million adults fully vaccinated by Jul 4.
The U.S. manufacturing industries have ramped up business activities and are currently facing a shortage of skilled manpower. The services industries predominantly consisting of restaurants and bars, hotels and motels, travel, logistics and cargo delivery, and various forms of entertainment are witnessing a spike in demand for their services.
Additionally, per the average of analysts' estimate, the U.S.GDP is expected to jump 6.5% this year, its highest in 36 years. Finally, corporate profits are likely to skyrocket this year. Per our latest estimate, total earnings per share for the S&P 500 companies are likely to soar 33.2% year over year in 2021 on 9.9% higher revenues..
Our Top Picks
We have narrowed down our search to five growth stocks that have popped more than 10% in the past month and still have upside left for 2021. These stocks have also witnessed robust earnings estimate revisions in the last 7 to 30 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) and has a Growth Score A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Medifast Inc. (MED - Free Report) manufactures and distributes weight loss, weight management, healthy living products, and other consumable health and nutritional products in the United States and the Asia-Pacific.
Strength in OPTAVIA remained a strong driver, with the average revenue per active earning OPTAVIA coach increasing year over year. OPTAVIA follows a holistic approach by focusing on six key areas of a human being, namely weight, eating and hydration, motion, sleep, mind and surroundings.
The company has expected earnings growth of 49% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 25.1% over the last 30 days. The stock price has soared 46.2% in the past month.
Tenneco Inc. (TEN - Free Report) designs, manufactures, and sells clean air, powertrain, and ride performance products and systems for light vehicle, commercial truck, off-highway, industrial, and aftermarket customers worldwide. It operates through the Clean Air, Powertrain, Ride Performance, and Motorparts segments.
Tenneco’s diverse business segments are likely to stoke organic growth along with reducing the risk profile. Focus on innovation, quality and performance across all business segments is accelerating its growth momentum.
The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.6% over the last 30 days. The stock price has jumped 43% in the past month.
Dillard's Inc. (DDS - Free Report) operates retail department stores in the southeast, southwest and Midwest areas of the United States. Its stores offer merchandise, including fashion apparel for women, men, and children, and accessories, cosmetics, home furnishings, and other consumer goods.
Dillard’s has been keen on inventory management since the start of the pandemic, through measures like cancellation, suspension and delaying of shipments as well as merchandise purchase reduction. These aggressive measures to lower excess inventory owing to the pandemic-led decline in demand have proven beneficial to the company’s margins.
The company has expected earnings growth of more than 100% for the current year (ending January 2022). The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 30 days. The stock price has climbed 34.6% in the past month.
Olin Corp. (OLN - Free Report) manufactures and distributes chemical products in the United States and internationally. It operates through three segments: Chlor Alkali Products and Vinyls, Epoxy, and Winchester.
Sales from the company's Winchester segment has jumped this year, driven by increased commercial and military sales as well as higher commercial ammunition pricing. The multi-year contract to operate the government-owned Lake City ammunition facility represents a significant driver for the unit.
The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 31.6% over the last 30 days. The stock price has surged 13.4% in the past month.
PDC Energy Inc. is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids in the United States.
Following the SRC Energy deal in January 2020, PDC Energy has emerged as the second-largest oil producer in the DJ Basin to go with its existing Delaware acreage. Apart from gaining scale, the deal is expected to generate significant operational synergies going forward.
The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 7 days. The stock price has advanced 11% in the past month.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency have sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
Image: Bigstock
5 High-Flying Growth Stocks to Buy Despite Inflation Concern
Wall Street has been reeling under inflationary threats over the past month resulting in volatile trading. Growing concerns about the impending inflation have affected the growth-oriented sectors the most as these depend on easy access to credit at a cheap rate to expand their businesses.
A large section of market participants believes that any inflation in the near term may compel the Fed to change its easy-monetary stance and raise the benchmark interest rate from the current level of 0-0.25%, earlier than its own projection.
Despite mounting inflationary threats a handful of growth stocks with a top Zacks Rank is flying high in the past month and likely to maintain the trend for the rest of 2021 predominantly owing to their solid business model. At this stage, investment in these stocks is likely to be fruitful.
Growth Stocks to Benefit From Economy's Reopening
Growth investors are primarily focused on stocks with aggressive earnings or revenue growth, which should propel their stock price higher in the future. Consequently, a faster-than-expected reopening of the economy, easing of restrictions and a stiff decline in the average daily coronavirus cases will support growth stocks in equity markets.
On May 13, Dr. Rochelle Walensky — Director of the Centers for Disease Control and Prevention (CDC) — said American's who are fully vaccinated need not wear a mask or stay six feet away from others in most settings, whether outdoors or indoors, excluding travel. On May 26, the CDC permitted cruise line operators to conduct a simulated cruise with volunteer passengers. A few major cruise liners are set to start sailing in late June.
The data compiled by Johns Hopkins University revealed that the seven-day average of daily coronavirus cases in the U.S. fell below 25,000 for the week ended May 24. This happened for the first time since Jun 19, 2020. Moreover, on May 25, the CDC said about 49% Americans received at least one shot of COVID-19 vaccine 39% fully vaccinated.
On May 4, President Joe Biden announced that the latest target of his administration is to get 70% of U.S. adults receive at least one dose of a COVID-19 vaccine and have 160 million adults fully vaccinated by Jul 4.
The U.S. manufacturing industries have ramped up business activities and are currently facing a shortage of skilled manpower. The services industries predominantly consisting of restaurants and bars, hotels and motels, travel, logistics and cargo delivery, and various forms of entertainment are witnessing a spike in demand for their services.
Additionally, per the average of analysts' estimate, the U.S.GDP is expected to jump 6.5% this year, its highest in 36 years. Finally, corporate profits are likely to skyrocket this year. Per our latest estimate, total earnings per share for the S&P 500 companies are likely to soar 33.2% year over year in 2021 on 9.9% higher revenues..
Our Top Picks
We have narrowed down our search to five growth stocks that have popped more than 10% in the past month and still have upside left for 2021. These stocks have also witnessed robust earnings estimate revisions in the last 7 to 30 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) and has a Growth Score A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Medifast Inc. (MED - Free Report) manufactures and distributes weight loss, weight management, healthy living products, and other consumable health and nutritional products in the United States and the Asia-Pacific.
Strength in OPTAVIA remained a strong driver, with the average revenue per active earning OPTAVIA coach increasing year over year. OPTAVIA follows a holistic approach by focusing on six key areas of a human being, namely weight, eating and hydration, motion, sleep, mind and surroundings.
The company has expected earnings growth of 49% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 25.1% over the last 30 days. The stock price has soared 46.2% in the past month.
Tenneco Inc. (TEN - Free Report) designs, manufactures, and sells clean air, powertrain, and ride performance products and systems for light vehicle, commercial truck, off-highway, industrial, and aftermarket customers worldwide. It operates through the Clean Air, Powertrain, Ride Performance, and Motorparts segments.
Tenneco’s diverse business segments are likely to stoke organic growth along with reducing the risk profile. Focus on innovation, quality and performance across all business segments is accelerating its growth momentum.
The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.6% over the last 30 days. The stock price has jumped 43% in the past month.
Dillard's Inc. (DDS - Free Report) operates retail department stores in the southeast, southwest and Midwest areas of the United States. Its stores offer merchandise, including fashion apparel for women, men, and children, and accessories, cosmetics, home furnishings, and other consumer goods.
Dillard’s has been keen on inventory management since the start of the pandemic, through measures like cancellation, suspension and delaying of shipments as well as merchandise purchase reduction. These aggressive measures to lower excess inventory owing to the pandemic-led decline in demand have proven beneficial to the company’s margins.
The company has expected earnings growth of more than 100% for the current year (ending January 2022). The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 30 days. The stock price has climbed 34.6% in the past month.
Olin Corp. (OLN - Free Report) manufactures and distributes chemical products in the United States and internationally. It operates through three segments: Chlor Alkali Products and Vinyls, Epoxy, and Winchester.
Sales from the company's Winchester segment has jumped this year, driven by increased commercial and military sales as well as higher commercial ammunition pricing. The multi-year contract to operate the government-owned Lake City ammunition facility represents a significant driver for the unit.
The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 31.6% over the last 30 days. The stock price has surged 13.4% in the past month.
PDC Energy Inc. is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids in the United States.
Following the SRC Energy deal in January 2020, PDC Energy has emerged as the second-largest oil producer in the DJ Basin to go with its existing Delaware acreage. Apart from gaining scale, the deal is expected to generate significant operational synergies going forward.
The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 7 days. The stock price has advanced 11% in the past month.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency have sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>