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“Citius, Altius, Fortius” – these Latin words that mean "Faster, Higher, Stronger" form the motto of the Olympics Games that showcases the true sportsman spirit as competitors across the globe compete for the ultimate glory.
The 2016 edition of the Summer Olympics is now on at Rio de Janeiro, Brazil. Defying all odds, sportspersons aim to reach the summit of this quadrennial event that tests not just the physical acumen or individual prowess but the zeal to excel in all forms of the competition. Such a sporting extravaganza can transform an ordinary athlete into a living legend or make the seemingly invincible bite the dust, only to pledge to come back stronger in the next Olympics.
The Equity Market Analogy
Although the equity market do not hold any such event to test the mettle of the individual stocks, testing times such as macroeconomic challenges and geopolitical tensions, both in the domestic territory and international waters help us to identify stocks that have the fundamentals to outdo others. These stocks, eventually become stronger as they continue to aim higher and seek greener pastures.
No wonder then that stocks that remain relatively firm despite sporadic events or catastrophic situations that shake the financial markets catch the eye of the investors.
Screening Parameters
As we celebrate this sporting carnival, let us try to find three highflying stocks that aim to move faster, higher & stronger in the equity market race. We have run the screen to identify the stocks based on the following screening parameters:
Market Cap greater than $5 billion: This metric prunes large cap stocks that are financially stronger to withstand any equity market volatility.
Zacks Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or #2 (Buy) stocks are known to outperform irrespective of the market environment.
Trading near 52-Week High: This helps us to identify stocks that are on uptrend and is expected to move higher.
VGM Score of A: Academic research has proven that stocks with the best value, growth and momentum characteristics outperform the market.
Last Quarter EPS Surprise (%) greater than 10: A healthy earnings beat portray inherent strength of the companies that have helped them to surpass expectations.
3 Medal Winners
Based on the screening parameters, we have zeroed in on three stocks that seem to have mastered the Olympic motto. Let us dig a little deep in to these prized caps.
Dollar Tree, Inc. (DLTR - Free Report) : Headquartered in Chesapeake, VA, Dollar Tree is an operator of discount variety stores offering merchandise at a fixed price point of $1.00. This Zacks Rank #2 stock offers a wide range of general merchandise, including house wares, seasonal goods, candy and food, toys, health and beauty care, gifts, party goods, stationery, books, personal accessories, and other consumer items. With a market cap of $22.6 billion, the shares have scaled a new 52-week yesterday. Dollar Tree had a healthy positive earnings surprise of 11.3% in the last reported quarter and a strong long-term earnings growth expectations of 17.5%.
Motorola Solutions, Inc. (MSI - Free Report) : Based in Schaumburg, IL, Motorola is a leading communications equipment manufacturer. This Zacks Rank #2 stock develops and services both analog and digital two-way radio, voice & data communications products, wireless broadband systems and end-to-end enterprise mobility solutions for a wide range of enterprise markets. Motorola has a market cap of $13 billion and is currently hovering around its 52-week high tally. The company has a healthy earnings surprise of 14.4% in the last reported quarter.
WellCare Health Plans, Inc. : Headquartered in Tampa, FL, WellCare focuses exclusively on providing government-sponsored managed care services, primarily through Medicaid, Medicare Advantage and Medicare Prescription Drug Plans. This Zacks Rank #2 stock is trading near its 52-week high tally. WellCare has a market cap of $5.1 billion. The company has a solid earnings surprise of 60.4% in the last reported quarter and a healthy long-term earnings growth expectation of 17.7%.
Endnote
According to wealth management firm Bespoke Investment Group, "The S&P 500 has averaged a gain of 1.75% from the opening ceremony to the closing ceremony over the 20 Summer Olympics since 1928 (2 of the 22 were cancelled due to world wars). The median return has been smaller at +0.30%, and the index has been positive 55% of the time."
Betting on three possible outperformers in such a scenario is likely to be a profitable move for the investors.
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3 Stocks Set to Move Faster, Higher, Stronger
“Citius, Altius, Fortius” – these Latin words that mean "Faster, Higher, Stronger" form the motto of the Olympics Games that showcases the true sportsman spirit as competitors across the globe compete for the ultimate glory.
The 2016 edition of the Summer Olympics is now on at Rio de Janeiro, Brazil. Defying all odds, sportspersons aim to reach the summit of this quadrennial event that tests not just the physical acumen or individual prowess but the zeal to excel in all forms of the competition. Such a sporting extravaganza can transform an ordinary athlete into a living legend or make the seemingly invincible bite the dust, only to pledge to come back stronger in the next Olympics.
The Equity Market Analogy
Although the equity market do not hold any such event to test the mettle of the individual stocks, testing times such as macroeconomic challenges and geopolitical tensions, both in the domestic territory and international waters help us to identify stocks that have the fundamentals to outdo others. These stocks, eventually become stronger as they continue to aim higher and seek greener pastures.
No wonder then that stocks that remain relatively firm despite sporadic events or catastrophic situations that shake the financial markets catch the eye of the investors.
Screening Parameters
As we celebrate this sporting carnival, let us try to find three highflying stocks that aim to move faster, higher & stronger in the equity market race. We have run the screen to identify the stocks based on the following screening parameters:
Market Cap greater than $5 billion: This metric prunes large cap stocks that are financially stronger to withstand any equity market volatility.
Zacks Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or #2 (Buy) stocks are known to outperform irrespective of the market environment.
Trading near 52-Week High: This helps us to identify stocks that are on uptrend and is expected to move higher.
VGM Score of A: Academic research has proven that stocks with the best value, growth and momentum characteristics outperform the market.
Last Quarter EPS Surprise (%) greater than 10: A healthy earnings beat portray inherent strength of the companies that have helped them to surpass expectations.
3 Medal Winners
Based on the screening parameters, we have zeroed in on three stocks that seem to have mastered the Olympic motto. Let us dig a little deep in to these prized caps.
Dollar Tree, Inc. (DLTR - Free Report) : Headquartered in Chesapeake, VA, Dollar Tree is an operator of discount variety stores offering merchandise at a fixed price point of $1.00. This Zacks Rank #2 stock offers a wide range of general merchandise, including house wares, seasonal goods, candy and food, toys, health and beauty care, gifts, party goods, stationery, books, personal accessories, and other consumer items. With a market cap of $22.6 billion, the shares have scaled a new 52-week yesterday. Dollar Tree had a healthy positive earnings surprise of 11.3% in the last reported quarter and a strong long-term earnings growth expectations of 17.5%.
Motorola Solutions, Inc. (MSI - Free Report) : Based in Schaumburg, IL, Motorola is a leading communications equipment manufacturer. This Zacks Rank #2 stock develops and services both analog and digital two-way radio, voice & data communications products, wireless broadband systems and end-to-end enterprise mobility solutions for a wide range of enterprise markets. Motorola has a market cap of $13 billion and is currently hovering around its 52-week high tally. The company has a healthy earnings surprise of 14.4% in the last reported quarter.
WellCare Health Plans, Inc. : Headquartered in Tampa, FL, WellCare focuses exclusively on providing government-sponsored managed care services, primarily through Medicaid, Medicare Advantage and Medicare Prescription Drug Plans. This Zacks Rank #2 stock is trading near its 52-week high tally. WellCare has a market cap of $5.1 billion. The company has a solid earnings surprise of 60.4% in the last reported quarter and a healthy long-term earnings growth expectation of 17.7%.
Endnote
According to wealth management firm Bespoke Investment Group, "The S&P 500 has averaged a gain of 1.75% from the opening ceremony to the closing ceremony over the 20 Summer Olympics since 1928 (2 of the 22 were cancelled due to world wars). The median return has been smaller at +0.30%, and the index has been positive 55% of the time."
Betting on three possible outperformers in such a scenario is likely to be a profitable move for the investors.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>