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5 Momentum Stocks to Buy for September Gains Despite Market Volatility
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Wall Street ended a volatile August on a positive note. The three major indexes — the Dow, the S&P 500 and the Nasdaq Composite — were up 1.8%, 2.3% and 0.7%, respectively. Meanwhile, U.S. stock markets started September with a sharp decline. On Tuesday, the first trading day of this month, the Dow, the S&P 500 and the Nasdaq Composite — tumbled 1.5%, 2.1% and 3.3%, respectively.
The situation is the same as in August, when U.S. stocks fell sharply in the first week of the last month. Despite a weak start to this month, we offer five stocks as momentum picks for September. These are Assurant Inc. (AIZ - Free Report) , Ally Financial Inc. (ALLY - Free Report) , AppLovin Corp. (APP - Free Report) , Paramount Global (PARAA - Free Report) and Seagate Technology Holdings plc (STX - Free Report) .
The combination of a top Zacks Rank, solid earnings estimate revisions and stock price momentum should drive prices further in the near term.
A Challenging September for Stock Markets?
Historically, September is the worst-performing month for Wall Street. This year, too, the situation remains challenging. On the one hand, market participants are expecting a 100% probability of a 25 basis-point cut in the benchmark interest rate this month along with a 50-75-basis-point rate cut in 2024.
On the other hand, tepid job additions in July, which were well below the consensus estimate, weak retail sales and durable goods orders raised concerns about the health of the economy. On Tuesday, the S&P Global’s manufacturing PMI index showed a decline from July to August.
Likewise, the Institute for Supply Management’s manufacturing PMI index came in bellow the consensus mark. Manufacturing constitutes around 10-12% of the U.S. GDP. Investors are now waiting for August’s job data to be released on Friday.
5 Momentum Stocks Showing Strong Earnings Growth
Assurant Inc.
Assurant has been benefiting from its focus on inorganic and organic growth strategies. For 2024, AIZ expects adjusted EBITDA, excluding reportable catastrophes, to increase by high single-digits. While Global Housing should gain from improved performance in Homeowners, Global Lifestyle stands to gain from growth across Connected Living and Global Automotive.
These strengths validate the effectiveness of AIZ’s long-term strategy of focusing on higher growth fee-based and capital-light businesses. AIZ plans to deploy capital, mainly to fund business growth and return capital to shareholders via share buybacks and dividends. A lower debt level and improved leverage ratio add to the strength.
Strong Earnings Estimate Revisions for AIZ Stock
Assurant has an expected revenue and earnings growth rate of 4.9% and 6.8%, respectively, for the current year. The Zacks Consensus Estimate for the current-quarter, next-quarter, current-year and next-year earnings has improved over the past 30 days.
Image Source: Zacks Investment Research
Ally Financial Inc.
Ally Financial’s efforts to diversify revenues, growing demand for consumer loans and strategic opportunistic expansions will likely keep aiding its top line. We project net revenues of ALLY to witness a CAGR of 5.5% by 2026. Also, as the central bank is expected to cut interest rates this month, ALLY’s net interest margin will expand, though high funding costs will weigh on it. We project ALLY’s NIM to be 3.31% in 2024.
Solid Earnings Estimate Revisions for ALLY Shares
Ally Financials has an expected revenue and earnings growth rate of 0.6% and 15.1%, respectively, for the current year. The Zacks Consensus Estimate for the current-quarter, next-quarter, current-year and next-year earnings has improved over the past 30 days.
Image Source: Zacks Investment Research
AppLovin Corp.
AppLovin is engaged in building a software-based platform for mobile app developers to enhance the marketing and monetization of their apps in the United States and internationally. APP provides a technology platform that enables developers to market, monetize, analyze and publish their apps.
Earnings Estimate Revisions for APP Shares on the Rise
AppLovin has an expected revenue and earnings growth rate of 35.1% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current-quarter, next-quarter, current-year and next-year earnings has improved over the past 30 days.
Image Source: Zacks Investment Research
Paramount Global
Paramount Global operates as a media, streaming, and entertainment company worldwide. PARAA operates through TV Media, Direct-to-Consumer, and Filmed Entertainment segments. PARAA’s portfolio of consumer brands includes CBS, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount, Pluto TV and Simon & Schuster, among others.
Impressive Earnings Estimate Revisions for PARAA Stock
Paramount Global has an expected earnings growth rate of more than 100% for the current year. Although its revenue growth rate is negative for the current year, it is 0.2% for next year. The Zacks Consensus Estimate for current-quarter, next-quarter, current-year and next-year earnings has improved over the past 30 days.
Image Source: Zacks Investment Research
Seagate Technology Holdings plc
Seagate’s performance is cushioned by momentum in mass capacity solutions due to stronger nearline cloud demand. This is expected to drive top-line growth in fiscal 2025. Mass Capacity exabyte shipments constituted more than 90% of total exabyte shipments in the fourth quarter. STX expects to complete the qualification with a lead CSP customer and initiate several cloud customers (in the United States and China) qualifications in this quarter.
STX’s launch of Mozaic 3+ hard drive platform positions it well to benefit from megatrends like AI and machine learning, expecting to boost demand over the long term. Management anticipates first-quarter fiscal 2025 revenues to be $2.10 billion (+/- $150 million).
Seagate Technology has an expected revenue and earnings growth rate of 42.8% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current-quarter, next-quarter, current-year and next-year earnings has improved over the past 30 days.
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5 Momentum Stocks to Buy for September Gains Despite Market Volatility
Wall Street ended a volatile August on a positive note. The three major indexes — the Dow, the S&P 500 and the Nasdaq Composite — were up 1.8%, 2.3% and 0.7%, respectively. Meanwhile, U.S. stock markets started September with a sharp decline. On Tuesday, the first trading day of this month, the Dow, the S&P 500 and the Nasdaq Composite — tumbled 1.5%, 2.1% and 3.3%, respectively.
The situation is the same as in August, when U.S. stocks fell sharply in the first week of the last month. Despite a weak start to this month, we offer five stocks as momentum picks for September. These are Assurant Inc. (AIZ - Free Report) , Ally Financial Inc. (ALLY - Free Report) , AppLovin Corp. (APP - Free Report) , Paramount Global (PARAA - Free Report) and Seagate Technology Holdings plc (STX - Free Report) .
Each of the stocks sports a Zacks Rank #1 (Strong Buy) at present and has a Zacks Momentum Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.
The combination of a top Zacks Rank, solid earnings estimate revisions and stock price momentum should drive prices further in the near term.
A Challenging September for Stock Markets?
Historically, September is the worst-performing month for Wall Street. This year, too, the situation remains challenging. On the one hand, market participants are expecting a 100% probability of a 25 basis-point cut in the benchmark interest rate this month along with a 50-75-basis-point rate cut in 2024.
On the other hand, tepid job additions in July, which were well below the consensus estimate, weak retail sales and durable goods orders raised concerns about the health of the economy. On Tuesday, the S&P Global’s manufacturing PMI index showed a decline from July to August.
Likewise, the Institute for Supply Management’s manufacturing PMI index came in bellow the consensus mark. Manufacturing constitutes around 10-12% of the U.S. GDP. Investors are now waiting for August’s job data to be released on Friday.
5 Momentum Stocks Showing Strong Earnings Growth
Assurant Inc.
Assurant has been benefiting from its focus on inorganic and organic growth strategies. For 2024, AIZ expects adjusted EBITDA, excluding reportable catastrophes, to increase by high single-digits. While Global Housing should gain from improved performance in Homeowners, Global Lifestyle stands to gain from growth across Connected Living and Global Automotive.
These strengths validate the effectiveness of AIZ’s long-term strategy of focusing on higher growth fee-based and capital-light businesses. AIZ plans to deploy capital, mainly to fund business growth and return capital to shareholders via share buybacks and dividends. A lower debt level and improved leverage ratio add to the strength.
Strong Earnings Estimate Revisions for AIZ Stock
Assurant has an expected revenue and earnings growth rate of 4.9% and 6.8%, respectively, for the current year. The Zacks Consensus Estimate for the current-quarter, next-quarter, current-year and next-year earnings has improved over the past 30 days.
Image Source: Zacks Investment Research
Ally Financial Inc.
Ally Financial’s efforts to diversify revenues, growing demand for consumer loans and strategic opportunistic expansions will likely keep aiding its top line. We project net revenues of ALLY to witness a CAGR of 5.5% by 2026. Also, as the central bank is expected to cut interest rates this month, ALLY’s net interest margin will expand, though high funding costs will weigh on it. We project ALLY’s NIM to be 3.31% in 2024.
Solid Earnings Estimate Revisions for ALLY Shares
Ally Financials has an expected revenue and earnings growth rate of 0.6% and 15.1%, respectively, for the current year. The Zacks Consensus Estimate for the current-quarter, next-quarter, current-year and next-year earnings has improved over the past 30 days.
Image Source: Zacks Investment Research
AppLovin Corp.
AppLovin is engaged in building a software-based platform for mobile app developers to enhance the marketing and monetization of their apps in the United States and internationally. APP provides a technology platform that enables developers to market, monetize, analyze and publish their apps.
Earnings Estimate Revisions for APP Shares on the Rise
AppLovin has an expected revenue and earnings growth rate of 35.1% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current-quarter, next-quarter, current-year and next-year earnings has improved over the past 30 days.
Image Source: Zacks Investment Research
Paramount Global
Paramount Global operates as a media, streaming, and entertainment company worldwide. PARAA operates through TV Media, Direct-to-Consumer, and Filmed Entertainment segments. PARAA’s portfolio of consumer brands includes CBS, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount, Pluto TV and Simon & Schuster, among others.
Impressive Earnings Estimate Revisions for PARAA Stock
Paramount Global has an expected earnings growth rate of more than 100% for the current year. Although its revenue growth rate is negative for the current year, it is 0.2% for next year. The Zacks Consensus Estimate for current-quarter, next-quarter, current-year and next-year earnings has improved over the past 30 days.
Image Source: Zacks Investment Research
Seagate Technology Holdings plc
Seagate’s performance is cushioned by momentum in mass capacity solutions due to stronger nearline cloud demand. This is expected to drive top-line growth in fiscal 2025. Mass Capacity exabyte shipments constituted more than 90% of total exabyte shipments in the fourth quarter. STX expects to complete the qualification with a lead CSP customer and initiate several cloud customers (in the United States and China) qualifications in this quarter.
STX’s launch of Mozaic 3+ hard drive platform positions it well to benefit from megatrends like AI and machine learning, expecting to boost demand over the long term. Management anticipates first-quarter fiscal 2025 revenues to be $2.10 billion (+/- $150 million).
STX Shares Witness Robust Earnings Estimate Revisions
Seagate Technology has an expected revenue and earnings growth rate of 42.8% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current-quarter, next-quarter, current-year and next-year earnings has improved over the past 30 days.
Image Source: Zacks Investment Research