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Using Zacks Premium Screens, I have identified three stocks with improving earnings expectations, and strong momentum.
The Recent Price Strength screen looks for stocks trading in the upper range of their 52-week highs, along with an attractive Zacks Rank and Average Broker Rating, proving that the "trend is your friend."
Vita Coco Company
Vita Coco Company (COCO - Free Report) develops, markets, and distributes coconut water products under the Vita Coco brand. COCO sells a mix of products in addition to coconut water including coconut oil and milk, as well as a powdered form of coconut water, sparkling water, and an energy drink.
Personally, I have become a huge fan of the beverage. It is extremely nutritious, and hydrating as it is full of natural electrolytes and is a perfect recovery drink following rigorous activities.
Vita Coco Company has robust sales and earnings growth expectations as well. COCO currently earns a Zacks Rank #2 (Buy), indicating upward trending earnings revisions.
Sales for the current quarter are projected to grow 7% YoY to $103 million, and FY23 sales are expected to climb 10% to $470 million. Earnings are expected to skyrocket as well. Current quarter earnings are expected to grow 100% YoY to $0.08 per share, and FY23 earnings are expected to expand 178% to $0.64 per share.
Even with those strong expectations analysts are still upgrading estimates. Analysts have unanimously revised COCO earnings higher, with FY23 earnings upgraded by 28% in the last 60 days alone.
Image Source: Zacks Investment Research
Vita Coco Company is trading at a one-year forward earnings multiple of 34x, which is above the industry average, and below its median since IPO of 38x. That premium valuation comes with huge long-term potential for the stock.
Image Source: Zacks Investment Research
COCO has secular tail winds at its back. The global coconut water market is projected to be worth nearly $12 billion by 2027, growing at a CAGR of 15.3% over the next four years. As a consumer shift to healthier products continues, COCO is well-positioned to take advantage.
So far this year, COCO is one of the leading stocks in the market, up 57% YTD. After breaking out of a three-month consolidation the stock price has been climbing higher to new all-time highs.
Image Source: Zacks Investment Research
Lantheus
Lantheus (LNTH - Free Report) develops, manufactures, and commercializes diagnostic and therapeutic products that assist clinicians in the diagnosis and treatment of heart disease, cancer, and other diseases worldwide.
The diagnostics market is a great business to be in as the products are tremendously important for early identification of disease. Early identification and preventative treatments are some of the most critical factors in extending people’s lives, often more important than therapeutics themselves.
Additionally, the business enjoys high margins, which have increased significantly in recent years. LNTH enjoys gross margins of 62% and EBIT margins of 30%.
Image Source: Zacks Investment Research
Lantheus holds a Zacks Rank #1 (Strong Buy), indicating upward trending earnings revisions. Analysts are extremely bullish on LNTH stock and have unanimously raised earnings expectations across timeframes. In the current quarter, analysts have upgraded their expectations by 18%.
Image Source: Zacks Investment Research
Projections for sales growth are very healthy as well. Current quarter sales are expected to climb 33% to $278 million, and FY23 sales are expected to grow 24% to $1.2 billion.
Image Source: Zacks Investment Research
Considering all that growth in sales and earnings, Lantheus still trades at a fair valuation. The current one-year forward earnings multiple is 19x, which is below the industry average 23x, and below its five-year median of 23x.
Image Source: Zacks Investment Research
Lantheus stock is on a tear this year. After breaking out above $30 at the beginning of the year it hasn’t stopped climbing. It is now up 70% YTD and pushing its all-time highs.
Image Source: Zacks Investment Research
Bottom Line
Looking for leading stocks is one effective way to find winners. The strategy can be even further improved when combined with the Zacks Rank, and of course, strict risk management. Price momentum and improving earnings are powerful catalysts that should push these stocks higher over the near term, while strong and improving business fundamentals can carry them higher over the long term.
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2 Top Ranked Stocks with Strong Momentum
Buy the leaders sell the laggards, right?
Using Zacks Premium Screens, I have identified three stocks with improving earnings expectations, and strong momentum.
The Recent Price Strength screen looks for stocks trading in the upper range of their 52-week highs, along with an attractive Zacks Rank and Average Broker Rating, proving that the "trend is your friend."
Vita Coco Company
Vita Coco Company (COCO - Free Report) develops, markets, and distributes coconut water products under the Vita Coco brand. COCO sells a mix of products in addition to coconut water including coconut oil and milk, as well as a powdered form of coconut water, sparkling water, and an energy drink.
Personally, I have become a huge fan of the beverage. It is extremely nutritious, and hydrating as it is full of natural electrolytes and is a perfect recovery drink following rigorous activities.
Vita Coco Company has robust sales and earnings growth expectations as well. COCO currently earns a Zacks Rank #2 (Buy), indicating upward trending earnings revisions.
Sales for the current quarter are projected to grow 7% YoY to $103 million, and FY23 sales are expected to climb 10% to $470 million. Earnings are expected to skyrocket as well. Current quarter earnings are expected to grow 100% YoY to $0.08 per share, and FY23 earnings are expected to expand 178% to $0.64 per share.
Even with those strong expectations analysts are still upgrading estimates. Analysts have unanimously revised COCO earnings higher, with FY23 earnings upgraded by 28% in the last 60 days alone.
Image Source: Zacks Investment Research
Vita Coco Company is trading at a one-year forward earnings multiple of 34x, which is above the industry average, and below its median since IPO of 38x. That premium valuation comes with huge long-term potential for the stock.
Image Source: Zacks Investment Research
COCO has secular tail winds at its back. The global coconut water market is projected to be worth nearly $12 billion by 2027, growing at a CAGR of 15.3% over the next four years. As a consumer shift to healthier products continues, COCO is well-positioned to take advantage.
So far this year, COCO is one of the leading stocks in the market, up 57% YTD. After breaking out of a three-month consolidation the stock price has been climbing higher to new all-time highs.
Image Source: Zacks Investment Research
Lantheus
Lantheus (LNTH - Free Report) develops, manufactures, and commercializes diagnostic and therapeutic products that assist clinicians in the diagnosis and treatment of heart disease, cancer, and other diseases worldwide.
The diagnostics market is a great business to be in as the products are tremendously important for early identification of disease. Early identification and preventative treatments are some of the most critical factors in extending people’s lives, often more important than therapeutics themselves.
Additionally, the business enjoys high margins, which have increased significantly in recent years. LNTH enjoys gross margins of 62% and EBIT margins of 30%.
Image Source: Zacks Investment Research
Lantheus holds a Zacks Rank #1 (Strong Buy), indicating upward trending earnings revisions. Analysts are extremely bullish on LNTH stock and have unanimously raised earnings expectations across timeframes. In the current quarter, analysts have upgraded their expectations by 18%.
Image Source: Zacks Investment Research
Projections for sales growth are very healthy as well. Current quarter sales are expected to climb 33% to $278 million, and FY23 sales are expected to grow 24% to $1.2 billion.
Image Source: Zacks Investment Research
Considering all that growth in sales and earnings, Lantheus still trades at a fair valuation. The current one-year forward earnings multiple is 19x, which is below the industry average 23x, and below its five-year median of 23x.
Image Source: Zacks Investment Research
Lantheus stock is on a tear this year. After breaking out above $30 at the beginning of the year it hasn’t stopped climbing. It is now up 70% YTD and pushing its all-time highs.
Image Source: Zacks Investment Research
Bottom Line
Looking for leading stocks is one effective way to find winners. The strategy can be even further improved when combined with the Zacks Rank, and of course, strict risk management. Price momentum and improving earnings are powerful catalysts that should push these stocks higher over the near term, while strong and improving business fundamentals can carry them higher over the long term.