Back to top

Image: Bigstock

Forget The Healthcare Vote, Focus On Strong Sectors

Read MoreHide Full Article

The market may be telling you it cares a lot about what the whole healthcare bill that should have been voted on yesterday but could see a final vote later today.  You might think that this is the thing that a growth investor like myself really cares about, but you would be dead wrong.

What I am Seeing

Today I am looking at a few sectors that continue to be super strong.  First I am going to highlight one that has been super hot for a long time.  The good news we received last night tells me that there is still room to run.

Next I am going back to an investment idea I posted a few weeks ago as this sector is also crushing it.

Strong Stock In Strong Industry

The first group I am going to profile is the semiconductors.  Most of these names have been super hot over the last year or more.  Right now, the semiconductor industry group is #1 in the Zacks Industry Rank. 

One reason for the group moving higher today is the earnings report that we saw from Micron Technology ((MU - Free Report) ) last night.  Miron is a Zacks Rank #1 (Strong Buy) and has a value style score of “A” and a growth style score of “B.”  With a forward PE of only 11.3x, even value investors have to be interested in this growth sector.

The main reason that MU is up around 9% today is that they raised guidance it the most recent quarterly report.  The company sees EPS for next quarter coming in between $1.43-$1.57 when the consensus is calling for $0.93

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

 

Shifting The Spotlight

The optical networking stocks are also lighting the lamp today.  The sector seems to have been on a power play all year following several names delivering on earnings recently.  The name that kicked off the year super strong continues to drive a lot of the action.

Applied Optoelectronics ((AAOI - Free Report) ) is a Zacks Rank #1 (Strong Buy) and has an “A” growth style score and a “C” for the value style score.  Usually I like to see a big divergence for growth and value in a name like this, but I am wondering why this stock is only a “C” when the forward PE is only 16.4x. 

AAOI is up more than 6.5% today and other names in the sector are moving higher as well.

Follow Brian Bolan on Twitter: @BBolan1

 

 

 

Other Optical Stocks

Oclaro () is a Zacks Rank #3 (Hold) but it is also moving higher by more than 6% today.

A stock that has a strong Zacks Rank #2 (Buy) and sports that divergence I like to see (strong growth score of A and weak value score of D) is Lumentum Holding ((LITE - Free Report) ).  That stock is up nearly 4% today as the group continues to see buyers move into those stocks.

A few weeks ago I wrote on the optical stocks that could have been lighting up your portfolio.  Be sure to read that article (https://www.zacks.com/commentary/104801/are-optical-stocks-lighting-up-your-portfolio) as well!