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Strong Q1 a Boon for the Rest of 2024? 5 Top Growth Picks
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Stocks may have slipped on Mar 25 to begin a shortened final week of the first quarter but the S&P 500 is on track to post a price gain of almost 10%. The broader index has scaled up nearly 30% since its closing low on Oct 27 and surpassed its all-time high last week.
Skeptics have, thus, started to question whether all the positive news is already priced in the market. Many of them believe that the S&P 500 is due for a pullback, thanks to the over-extended rally, while most of the stocks listed in the index have become expensive.
However, the S&P 500 has, time and again, registered gains in the rest of the year following a solid first quarter. Jefferies noted that since 1970, whenever the S&P 500 has notched average gains of 2.5% in the first quarter, it has tended to beat its average second-quarter gain of nearly 2.6% by 60 basis points, or 0.6%. And if the S&P 500 can gain more than 10% in the first quarter, the second quarter gains are even more encouraging, averaging 3.3%.
Furthermore, chief investment strategist Sam Stovall at the CFRA said that strong first-quarter performance since 1945, or the end of the Second World War, has always resulted in superb full-year gains. This time around, the stock market is well-poised to continue its winning streak, banking on AI optimism and the Federal Reserve’s assurance of three interest rate cuts later this year.
High-growth players, including tech stocks, are witnessing their shares move upward by leaps and bounds as AI has resulted in several technological headways. AI integration has led to an increase in labor productivity and financial growth for countless tech firms (read more: 3 Solid AI Stocks Worth a Look for the Rest of the Year).
The Fed, meanwhile, has kept interest rates unaltered in its latest policy meeting and has reiterated that it’s sticking with its prediction of a series of interest rate cuts soon. Rate cuts no doubt bode well for the economy vis-à-vis the stock market as it increases consumer spending and reduces borrowing costs.
Thus, with fears of the recession on the ebb and the stock market expected to continue its growth trajectory, it’s judicious for astute investors to place bets on stocks that not only gained traction in the first quarter but also are well-poised to scale northward along with the broader market.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. American Eagle Outfitters currently has a Zacks Rank #1 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 14% over the past 60 days. AEO’s expected earnings growth rate for the current year is 12.5%. Its shares have soared 20.2% so far this year.
Abercrombie & Fitch operates as a specialty retailer of premium, high-quality casual apparel. Abercrombie & Fitch currently has a Zacks Rank #1 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 18.9% over the past 60 days. ANF’s expected earnings growth rate for the current year is 19.1%. Its shares have surged 53% year to date.
Cimpress is an online supplier of high-quality graphic design services and customized printed products. Cimpress currently has a Zacks Rank #1 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 11.7% over the past 60 days. CMPR’s expected earnings growth rate for the current year is 144.6%. Its shares have jumped 12.9% so far this year.
Dianthus Therapeutics is a privately held, clinical-stage biotechnology company. Dianthus Therapeutics currently has a Zacks Rank #2 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 14.3% over the past 60 days. DNTH’s expected earnings growth rate for the current year is 56.8%. Its shares have soared 207.1% year to date.
NVIDIA is the worldwide leader in visual computing technologies. NVIDIA currently has a Zacks Rank #1 and a Growth Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 19.3% over the past 60 days. NVDA’s expected earnings growth rate for the current year is 83.6%. Its shares have jumped 90.4% so far this year (read more: Nvidia a Must-Buy After AI-Fueled Blowout Earnings).
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Strong Q1 a Boon for the Rest of 2024? 5 Top Growth Picks
Stocks may have slipped on Mar 25 to begin a shortened final week of the first quarter but the S&P 500 is on track to post a price gain of almost 10%. The broader index has scaled up nearly 30% since its closing low on Oct 27 and surpassed its all-time high last week.
Skeptics have, thus, started to question whether all the positive news is already priced in the market. Many of them believe that the S&P 500 is due for a pullback, thanks to the over-extended rally, while most of the stocks listed in the index have become expensive.
However, the S&P 500 has, time and again, registered gains in the rest of the year following a solid first quarter. Jefferies noted that since 1970, whenever the S&P 500 has notched average gains of 2.5% in the first quarter, it has tended to beat its average second-quarter gain of nearly 2.6% by 60 basis points, or 0.6%. And if the S&P 500 can gain more than 10% in the first quarter, the second quarter gains are even more encouraging, averaging 3.3%.
Furthermore, chief investment strategist Sam Stovall at the CFRA said that strong first-quarter performance since 1945, or the end of the Second World War, has always resulted in superb full-year gains. This time around, the stock market is well-poised to continue its winning streak, banking on AI optimism and the Federal Reserve’s assurance of three interest rate cuts later this year.
High-growth players, including tech stocks, are witnessing their shares move upward by leaps and bounds as AI has resulted in several technological headways. AI integration has led to an increase in labor productivity and financial growth for countless tech firms (read more: 3 Solid AI Stocks Worth a Look for the Rest of the Year).
The Fed, meanwhile, has kept interest rates unaltered in its latest policy meeting and has reiterated that it’s sticking with its prediction of a series of interest rate cuts soon. Rate cuts no doubt bode well for the economy vis-à-vis the stock market as it increases consumer spending and reduces borrowing costs.
Consumers, anyhow, remained resilient on the back of a strong labor market despite sticky inflationary pressure and decreasing pandemic savings (read more: 5 Top Stocks to Gain on Signs of Household Spending Resilience).
Thus, with fears of the recession on the ebb and the stock market expected to continue its growth trajectory, it’s judicious for astute investors to place bets on stocks that not only gained traction in the first quarter but also are well-poised to scale northward along with the broader market.
These stocks are American Eagle Outfitters (AEO - Free Report) , Abercrombie & Fitch (ANF - Free Report) , Cimpress (CMPR - Free Report) , Dianthus Therapeutics, Inc. (DNTH - Free Report) and NVIDIA Corporation (NVDA - Free Report) . These stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Growth Score of A or B, a combination that offers the best opportunities in the growth investing space. You can see the complete list of today’s Zacks Rank #1 stocks here.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. American Eagle Outfitters currently has a Zacks Rank #1 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 14% over the past 60 days. AEO’s expected earnings growth rate for the current year is 12.5%. Its shares have soared 20.2% so far this year.
Abercrombie & Fitch operates as a specialty retailer of premium, high-quality casual apparel. Abercrombie & Fitch currently has a Zacks Rank #1 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 18.9% over the past 60 days. ANF’s expected earnings growth rate for the current year is 19.1%. Its shares have surged 53% year to date.
Cimpress is an online supplier of high-quality graphic design services and customized printed products. Cimpress currently has a Zacks Rank #1 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 11.7% over the past 60 days. CMPR’s expected earnings growth rate for the current year is 144.6%. Its shares have jumped 12.9% so far this year.
Dianthus Therapeutics is a privately held, clinical-stage biotechnology company. Dianthus Therapeutics currently has a Zacks Rank #2 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 14.3% over the past 60 days. DNTH’s expected earnings growth rate for the current year is 56.8%. Its shares have soared 207.1% year to date.
NVIDIA is the worldwide leader in visual computing technologies. NVIDIA currently has a Zacks Rank #1 and a Growth Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 19.3% over the past 60 days. NVDA’s expected earnings growth rate for the current year is 83.6%. Its shares have jumped 90.4% so far this year (read more: Nvidia a Must-Buy After AI-Fueled Blowout Earnings).