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5 Top-Ranked Momentum Stocks for 2021That Have Surged YTD
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Wall Street has witnessed an impressive rally so far this year despite 2020 remaining coronavirus-stricken. Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have rallied 5.2%, 14.1% and 42.7%, respectively.
Market's north-bound movement is likely to continue in 2021 based on FDA's approval of two coronavirus vaccines this month, the Congressional agreement on a fresh round of fiscal stimulus this year and better-than-expected corporate earnings. Consequently, it will be prudent invest in momentum stocks that have surged year to date and sport a top Zacks Rank.
Three Near-Term Drivers
Momentum investing calls for continued appraisal of stocks, ensuring that an investor does not pick a beaten-down name or overlook a thriving one. Momentum investors buy high on the anticipation that a stock will only ascend in the short to intermediate term. Although coronavirus-induced woes are persisting in the United States, causing occasional market fluctuations, the overall movement of Wall Street is likely to remain northbound due to the three main drivers.
First, the U.S. Congress has reached an agreement on the second round of fiscal stimulus for pandemic-led devastations. The $900 billion package is expected to include a direct payment of $600 for every adult and child. The deal is likely to provide $300 weekly unemployment payments for 11 weeks and extend two other unemployment programs until they begin phasing out in mid-March and end in early April.
The other expected provisions in the deal include approximately $300 billion of the small business paycheck protection program, $15 billion for airline payroll support, $82 billion to schools, $10 billion toward childcare, $25 billion for rental assistance, $13 billion for food-stamp and child-nutrition and $30 billion for the procurement and distribution of vaccine.
Second, the FDA authorization of COVID-19 vaccines this year means that the economy will reopen and gradually operate at the pre-pandemic level. Since the lockdowns imposed in March, the U.S. economy is operating at a significant sub-optimal level.
Consumers were restrained or restricted by the government to spend on those items that were closed during lockdowns. Reopening of the economy with the easing of the pandemic will significantly boost personal spending, the largest component of the U.S. GDP.
Third, in its latest estimation on Dec 17, the Atlanta Fed projected that fourth-quarter 2020 GDP will increase 11.1% after increasing a record 33.4% in the third quarter. Projections for corporate earnings are also growing since last July. At present, the consensus estimate is that the 2021 earrings of S&P 500 Index will increase 22% on 7.7% higher revenues after it declined 16.9% in earnings on 3.9% lower revenues in 2020.
Our Top Picks
We have narrowed down our search to five momentum stocks that have popped more than 20% year to date. All these stocks witnessed robust earnings estimate revisions in the last 7 days and have strong growth potential for 2021. Each of our picks carries a Zacks Rank #1 (Strong Buy) and has a Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
FedEx Corp. (FDX - Free Report) is the leader in global express delivery services. It provides a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the FedEx brand.
The company has an expected earnings growth rate of 77.6% for the current year (ending May 2021). The Zacks Consensus Estimate for the current year has improved 8.1% over the last 7 days. The stock price has soared 80.7% year to date.
Lennar Corp. (LEN - Free Report) operates as a homebuilder primarily under the Lennar brand in the United States. It operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments.
The company has an expected earnings growth rate of 8.3% for the current year (ending November 2021). The Zacks Consensus Estimate for the current year has improved 6.6% over the last 7 days. The stock price has jumped 44% year to date.
Hologic Inc. (HOLX - Free Report) develops, manufactures, and supplies diagnostics products, medical imaging systems, and surgical products for women's health through early detection and treatment in the United States, Europe, the Asia-Pacific, and internationally. It operates through four segments: Diagnostics, Breast Health, GYN Surgical, and Skeletal Health.
The company has an expected earnings growth rate of 76.9% for the current year (ending September 2021). The Zacks Consensus Estimate for current-year earnings has improved 5.1% over the last 7 days. The stock has climbed 43% year to date.
Micron Technology Inc. (MU - Free Report) designs, manufactures and sells memory and storage products worldwide. It operates through four segments: Compute and Networking Business Unit, Mobile Business Unit, Storage Business Unit, and Embedded Business Unit.
The company has an expected earnings growth rate of 29.3% for the current year (ending August 2021). The Zacks Consensus Estimate for its current-year earnings has improved 6.1% over the last 7days. The stock price has appreciated 31% year to date.
Liberty Broadband Corp. (LBRDA - Free Report) is a cable operator that provides video, Internet and voice services to residential and small and medium business customers in the United States. It operates through the Skyhook and Charter segments
The company has an expected earnings growth rate of 48.6% for next year. The Zacks Consensus Estimate for its earnings next year has improved more than 100% over the last 7 days. The stock price has advanced 22.1% year to date.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
Image: Bigstock
5 Top-Ranked Momentum Stocks for 2021That Have Surged YTD
Wall Street has witnessed an impressive rally so far this year despite 2020 remaining coronavirus-stricken. Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have rallied 5.2%, 14.1% and 42.7%, respectively.
Market's north-bound movement is likely to continue in 2021 based on FDA's approval of two coronavirus vaccines this month, the Congressional agreement on a fresh round of fiscal stimulus this year and better-than-expected corporate earnings. Consequently, it will be prudent invest in momentum stocks that have surged year to date and sport a top Zacks Rank.
Three Near-Term Drivers
Momentum investing calls for continued appraisal of stocks, ensuring that an investor does not pick a beaten-down name or overlook a thriving one. Momentum investors buy high on the anticipation that a stock will only ascend in the short to intermediate term. Although coronavirus-induced woes are persisting in the United States, causing occasional market fluctuations, the overall movement of Wall Street is likely to remain northbound due to the three main drivers.
First, the U.S. Congress has reached an agreement on the second round of fiscal stimulus for pandemic-led devastations. The $900 billion package is expected to include a direct payment of $600 for every adult and child. The deal is likely to provide $300 weekly unemployment payments for 11 weeks and extend two other unemployment programs until they begin phasing out in mid-March and end in early April.
The other expected provisions in the deal include approximately $300 billion of the small business paycheck protection program, $15 billion for airline payroll support, $82 billion to schools, $10 billion toward childcare, $25 billion for rental assistance, $13 billion for food-stamp and child-nutrition and $30 billion for the procurement and distribution of vaccine.
Second, the FDA authorization of COVID-19 vaccines this year means that the economy will reopen and gradually operate at the pre-pandemic level. Since the lockdowns imposed in March, the U.S. economy is operating at a significant sub-optimal level.
Consumers were restrained or restricted by the government to spend on those items that were closed during lockdowns. Reopening of the economy with the easing of the pandemic will significantly boost personal spending, the largest component of the U.S. GDP.
Third, in its latest estimation on Dec 17, the Atlanta Fed projected that fourth-quarter 2020 GDP will increase 11.1% after increasing a record 33.4% in the third quarter. Projections for corporate earnings are also growing since last July. At present, the consensus estimate is that the 2021 earrings of S&P 500 Index will increase 22% on 7.7% higher revenues after it declined 16.9% in earnings on 3.9% lower revenues in 2020.
Our Top Picks
We have narrowed down our search to five momentum stocks that have popped more than 20% year to date. All these stocks witnessed robust earnings estimate revisions in the last 7 days and have strong growth potential for 2021. Each of our picks carries a Zacks Rank #1 (Strong Buy) and has a Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
FedEx Corp. (FDX - Free Report) is the leader in global express delivery services. It provides a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the FedEx brand.
The company has an expected earnings growth rate of 77.6% for the current year (ending May 2021). The Zacks Consensus Estimate for the current year has improved 8.1% over the last 7 days. The stock price has soared 80.7% year to date.
Lennar Corp. (LEN - Free Report) operates as a homebuilder primarily under the Lennar brand in the United States. It operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments.
The company has an expected earnings growth rate of 8.3% for the current year (ending November 2021). The Zacks Consensus Estimate for the current year has improved 6.6% over the last 7 days. The stock price has jumped 44% year to date.
Hologic Inc. (HOLX - Free Report) develops, manufactures, and supplies diagnostics products, medical imaging systems, and surgical products for women's health through early detection and treatment in the United States, Europe, the Asia-Pacific, and internationally. It operates through four segments: Diagnostics, Breast Health, GYN Surgical, and Skeletal Health.
The company has an expected earnings growth rate of 76.9% for the current year (ending September 2021). The Zacks Consensus Estimate for current-year earnings has improved 5.1% over the last 7 days. The stock has climbed 43% year to date.
Micron Technology Inc. (MU - Free Report) designs, manufactures and sells memory and storage products worldwide. It operates through four segments: Compute and Networking Business Unit, Mobile Business Unit, Storage Business Unit, and Embedded Business Unit.
The company has an expected earnings growth rate of 29.3% for the current year (ending August 2021). The Zacks Consensus Estimate for its current-year earnings has improved 6.1% over the last 7days. The stock price has appreciated 31% year to date.
Liberty Broadband Corp. (LBRDA - Free Report) is a cable operator that provides video, Internet and voice services to residential and small and medium business customers in the United States. It operates through the Skyhook and Charter segments
The company has an expected earnings growth rate of 48.6% for next year. The Zacks Consensus Estimate for its earnings next year has improved more than 100% over the last 7 days. The stock price has advanced 22.1% year to date.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>