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Why Brexit Won't Matter for These 4 Stocks in July

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The U.S. equity market shrugged off the initial hiccups from the Brexit aftermath within a week or so, as “Buy the Shock” emerged as the new investment strategy on Wall Street. After the news led to almost a 5 1/2% drop in the benchmark S&P 500 index in just two trading sessions (wiping out considerable investor wealth), the market staged a remarkable turnaround to reach the psychologically significant 2,100 level last Friday, delivering one of the best performances since November.

Taking a cue from the various mini-crashes and rapid-rebound reaction of the stock market following the 2008 financial crisis, it appears that the U.S. equity market has mastered the game of not letting emotions gain an upper hand over sound investment logic. A thorough market analysis and realization of the fact that the Brexit saga could drag on for years (giving ample time for the central banks to devise any counter strategy) helped soothe the investors’ nerves.

The upturn was also led by positive economic data that showed a rapid improvement in the U.S. manufacturing activity in June – the highest recorded in the last 15 months as new orders, output and exports picked up.

A Perfect Time to Invest

Alan Skrainka, chief investment officer at Cornerstone Wealth Management, perfectly summed up: “Investors should remember that, in the short run, markets are unpredictable... jumping in and out of a quality, well-diversified portfolio is the single biggest mistake investors can make. In time, people will forget about the Brexit vote much like they have forgotten about other short-term events that upset the markets.”

As markets regain their sound footing, let us cherry pick some solid stocks that are likely to continue their bull run in July. These stocks are backed by a VGM score of ‘A’ and a Zacks Rank #2 (Buy).

4 Stocks to Buy Now

Hasbro Inc. (HAS - Free Report) : Based in Pawtucket, RI, Hasbro is engaged in the design, manufacture and marketing of games and toys.

Hasbro is scheduled to release its second-quarter results before the market opens on Jul 18, 2016. With a solid year-to-date return of 24.6% and a trailing four quarter average earnings surprise of a positive 20.9%, it appears to be on course to replicate its success story in the soon-to-be-reported quarter as well.

Alliance Data Systems Corp. : Headquartered in Plano, TX and founded in 1996, Alliance Data is the largest private label credit card processing firm for mid-market specialty retail stores in the U.S.

The company is slated to release its second-quarter results in July. Alliance Data has a fairly modest earnings history with a trailing four quarter average earnings surprise of a positive 2.2%. We expect the company to beat the earnings estimate in the ensuing release also.

Intel Corp. (INTC - Free Report) : This semiconductor giant is likely to issue its second quarter results in the third week of July. With a healthy trailing four quarter average earnings surprise of a positive 11.5%, it will likely surpass the earnings estimates in the impending release and witness a decent uptick in share prices.

Laboratory Corp. of America Holdings (LH - Free Report) : Headquartered in Burlington, NC, Laboratory Corp. is a leading healthcare diagnostics company, providing comprehensive clinical laboratory services and end-to-end drug development support.

The company is slated to release its second-quarter results in this month. Laboratory Corp. has a modest earnings history with a trailing four quarter average earnings surprise of a positive 1.4%. With an Earnings ESP of +0.87% and a Zacks Rank #2 (Buy), the company is likely to beat the earnings estimate in the ensuing release and appears poised for a healthy ROI.

End Note

As the dust settles on the Brexit episode and fears of a catastrophic event subside, the equity market seems to be on course for another V-shaped recovery. Amid such a scenario, it could work wonders for the investors to invest in these stocks that are likely to outperform in July backed by their prudent financial metrics.

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