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3 Soaring, Highly-Ranked Stocks to Buy Now for Even More Growth
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The market’s ride off its March bottom has been historically swift, but the S&P 500 finally closing at a new record on Tuesday seems like old news. Some analysts had already started to raise their targets, including Goldman Sachs, which lifted its S&P 500 year-end projection to 3,600 from 3,000.
This would give the index roughly 7% more room to run in 2020 from where it sat Thursday morning. There are clearly reasons to remain optimistic, despite the unknown of the upcoming election and growing tensions between the U.S. and China. Not to mention the continued uncertainty of what’s next on the coronavirus front.
That said, second quarter earnings results have come in largely better-than-projected and the Q3 outlook has improved. On top of that, there are signs of economic recovery, even those sectors such as transportation and travel & leisure remain in a rough spot.
Behind all of this, the current monetary and fiscal support could help keep the equity markets moving higher. With this in mind, let’s discuss three stocks, from three different industries, that have all soared during the pandemic to help investors see if they might have more room to run…
Etsy is a digital marketplace that’s best thought of as an e-commerce craft fair that allows individuals and small businesses to sell everything from clothing to art and home décor. The Brooklyn-based firm’s niche e-commerce platform was growing steadily, and then the coronavirus helped send it to the stratosphere. ETSY has skyrocketed nearly 300% since the market’s lows to crush Amazon (AMZN - Free Report) , eBay (EBAY - Free Report) , and Shopify (SHOP - Free Report) . This is part of a 750% climb over the past three years.
Etsy’s annual sales climbed by 36% in both 2019 and 2018, with its Q1 FY20 revenue up 35%. Then its second quarter revenue soared 137%. Some headlines focused on Etsy’s mask sales, but non-mask sales surged 93%. Meanwhile, actives sellers jumped 35%, with buyers up 41%. Etsy’s strong earnings revisions help it earn a Zacks Rank #1 (Strong Buy) right now, and our estimates call for its Q3 revenue to jump 108%, with Q4 projected to come 65% higher. Etsy’s adjusted earnings are expected to climb 375% in Q3 and 104% in Q4.
Despite the run, Etsy trades at 9.7X forward 12-month sales, which marks a discount against its own one-year highs of 12X, and looks even better compared to Shopify’s 42X and Zoom’s (ZM - Free Report) 39X. The stock also rests 7% below its recent highs at $130 per share—while SHOP trades at $1,000. Its price alone might help Etsy appear more attractive to a wider range of investors looking to make pure-play bets on the booming e-commerce market that has miles of runway given that it accounted for under 12% of total U.S. retail sales in Q1.
One of the founding fathers of the commercialization of craft beer has seen its stock price jump 125% in 2020 from under $370 to over $850 per share. Boston Beer is currently riding high on the next revolution: hard seltzer. Truly Hard Seltzer, which launched in April 2016, is No. 2 in the booming market behind only White Claw and well ahead of newer entrants such as Anheuser-Busch InBev (BUD - Free Report) —even Coca-Cola (KO - Free Report) is getting in on the hard seltzer market.
Founder Jim Koch has called hard seltzer “once in a generation,” and the sales numbers back that up. The firm’s Q1 sales jumped 31%, with second quarter revenue up a 42%, driven, in large part, by Truly and its newer Truly Hard Lemonade. Zacks estimates now call for SAM’s Q3 sales to climb 36%, with fiscal 2020 expected to jump over 34%, and FY21 set to climb another 18%. These would come on top of 2018’s 15% revenue expansion and FY19’s 26%.
Boston Beer is a Zacks Rank #1 (Strong Buy) right now and its adjusted earnings are projected to climb by roughly 36% in both 2020 and 2021. Despite trouncing its industry over the past three years, up 490% vs. -26%, SAM trades at a serious discount: 5.5X forward sales against 16X. It also trades below its own one-year highs even as its stock price rests right near new records. Clearly, SAM appears worth considering as both a near-term coronavirus play, with alcohol sales up, and as a longer-term investment in the next big category.
Scotts Miracle-Gro became famous for its consumer lawn and garden products, which includes Ortho. These days, SMG’s Hawthorne Gardening unit is a leader in hydroponics. This provides Scotts Miracle-Gro major exposure to the growing marijuana industry, as well as indoor farming in general, which both have potential to boom over the next several decades.
Scotts Miracle-Gro’s revenue has climbed by at least 15% for eight quarters in a row. Its recently-reported Q3 FY20 saw the company’s revenue surge 28%, with Hawthorne up 72%. The company has also benefitted from increased home improvement spending. Peeking ahead, SMG’s fourth quarter sales are projected to jump another 60%, with its adjusted FY20 earnings projected to climb 53% on 28% stronger sales.
Scotts Miracle-Gro’s positive earnings revisions activity helps it grab a Rank #1 (Strong Buy) right now, alongside its “A” grade for Growth in our Style Scores system. The company also announced at the end of July the approval of a “special dividend of $5 per share” and it lifted its regular quarterly dividend by 7%, with both payable on September 10 to shareholders of record on August 27. SMG shares are up 60% in 2020 and they touched a brand new high on Thursday.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
3 Soaring, Highly-Ranked Stocks to Buy Now for Even More Growth
The market’s ride off its March bottom has been historically swift, but the S&P 500 finally closing at a new record on Tuesday seems like old news. Some analysts had already started to raise their targets, including Goldman Sachs, which lifted its S&P 500 year-end projection to 3,600 from 3,000.
This would give the index roughly 7% more room to run in 2020 from where it sat Thursday morning. There are clearly reasons to remain optimistic, despite the unknown of the upcoming election and growing tensions between the U.S. and China. Not to mention the continued uncertainty of what’s next on the coronavirus front.
That said, second quarter earnings results have come in largely better-than-projected and the Q3 outlook has improved. On top of that, there are signs of economic recovery, even those sectors such as transportation and travel & leisure remain in a rough spot.
Behind all of this, the current monetary and fiscal support could help keep the equity markets moving higher. With this in mind, let’s discuss three stocks, from three different industries, that have all soared during the pandemic to help investors see if they might have more room to run…
Etsy (ETSY - Free Report)
Etsy is a digital marketplace that’s best thought of as an e-commerce craft fair that allows individuals and small businesses to sell everything from clothing to art and home décor. The Brooklyn-based firm’s niche e-commerce platform was growing steadily, and then the coronavirus helped send it to the stratosphere. ETSY has skyrocketed nearly 300% since the market’s lows to crush Amazon (AMZN - Free Report) , eBay (EBAY - Free Report) , and Shopify (SHOP - Free Report) . This is part of a 750% climb over the past three years.
Etsy’s annual sales climbed by 36% in both 2019 and 2018, with its Q1 FY20 revenue up 35%. Then its second quarter revenue soared 137%. Some headlines focused on Etsy’s mask sales, but non-mask sales surged 93%. Meanwhile, actives sellers jumped 35%, with buyers up 41%. Etsy’s strong earnings revisions help it earn a Zacks Rank #1 (Strong Buy) right now, and our estimates call for its Q3 revenue to jump 108%, with Q4 projected to come 65% higher. Etsy’s adjusted earnings are expected to climb 375% in Q3 and 104% in Q4.
Despite the run, Etsy trades at 9.7X forward 12-month sales, which marks a discount against its own one-year highs of 12X, and looks even better compared to Shopify’s 42X and Zoom’s (ZM - Free Report) 39X. The stock also rests 7% below its recent highs at $130 per share—while SHOP trades at $1,000. Its price alone might help Etsy appear more attractive to a wider range of investors looking to make pure-play bets on the booming e-commerce market that has miles of runway given that it accounted for under 12% of total U.S. retail sales in Q1.
The Boston Beer Company (SAM - Free Report)
One of the founding fathers of the commercialization of craft beer has seen its stock price jump 125% in 2020 from under $370 to over $850 per share. Boston Beer is currently riding high on the next revolution: hard seltzer. Truly Hard Seltzer, which launched in April 2016, is No. 2 in the booming market behind only White Claw and well ahead of newer entrants such as Anheuser-Busch InBev (BUD - Free Report) —even Coca-Cola (KO - Free Report) is getting in on the hard seltzer market.
Founder Jim Koch has called hard seltzer “once in a generation,” and the sales numbers back that up. The firm’s Q1 sales jumped 31%, with second quarter revenue up a 42%, driven, in large part, by Truly and its newer Truly Hard Lemonade. Zacks estimates now call for SAM’s Q3 sales to climb 36%, with fiscal 2020 expected to jump over 34%, and FY21 set to climb another 18%. These would come on top of 2018’s 15% revenue expansion and FY19’s 26%.
Boston Beer is a Zacks Rank #1 (Strong Buy) right now and its adjusted earnings are projected to climb by roughly 36% in both 2020 and 2021. Despite trouncing its industry over the past three years, up 490% vs. -26%, SAM trades at a serious discount: 5.5X forward sales against 16X. It also trades below its own one-year highs even as its stock price rests right near new records. Clearly, SAM appears worth considering as both a near-term coronavirus play, with alcohol sales up, and as a longer-term investment in the next big category.
Scotts Miracle-Gro (SMG - Free Report)
Scotts Miracle-Gro became famous for its consumer lawn and garden products, which includes Ortho. These days, SMG’s Hawthorne Gardening unit is a leader in hydroponics. This provides Scotts Miracle-Gro major exposure to the growing marijuana industry, as well as indoor farming in general, which both have potential to boom over the next several decades.
Scotts Miracle-Gro’s revenue has climbed by at least 15% for eight quarters in a row. Its recently-reported Q3 FY20 saw the company’s revenue surge 28%, with Hawthorne up 72%. The company has also benefitted from increased home improvement spending. Peeking ahead, SMG’s fourth quarter sales are projected to jump another 60%, with its adjusted FY20 earnings projected to climb 53% on 28% stronger sales.
Scotts Miracle-Gro’s positive earnings revisions activity helps it grab a Rank #1 (Strong Buy) right now, alongside its “A” grade for Growth in our Style Scores system. The company also announced at the end of July the approval of a “special dividend of $5 per share” and it lifted its regular quarterly dividend by 7%, with both payable on September 10 to shareholders of record on August 27. SMG shares are up 60% in 2020 and they touched a brand new high on Thursday.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>