Back to top

Image: Shutterstock

5 S&P 500 Stocks Up More Than 50% in 1H With Room to Run

Read MoreHide Full Article

Wall Street has been roaring higher with the S&P 500 hitting new record highs. This is especially true, as the rapid pace of vaccination and the reopening of businesses has resulted in a speedy economic recovery from the pandemic lows, raising the appeal for riskier assets.

The huge infrastructure package, signs of a healing labor market, an expanded stimulus and strong corporate profit growth are also driving the stocks higher. The combination of factors has powered activities across all sectors and categories, resulting in increased consumer spending and confidence. The economy expanded 6.4% annually in the first quarter, representing the second-strongest increase since 2003 and is expected to top 7% this year, which would be the fastest since 1984, per several economists. This would follow the 3.5% contraction in 2020, which was the worst performance in 74 years.

The strength in value and cyclical stocks, which were battered last year, has led the S&P 500 to outperform this year compared to the growth and tech-laden Nasdaq Composite Index, which was an outperformer during the pandemic. The solid trend is likely to continue given that the strong fundamentals should remain in place for at least in the near term.

Inflation concerns eased last week following the Fed’s statement that it views inflation as temporary. Also, the latest personal consumption expenditures (PCE) data shows that underlying inflation rose less than expected in May given the alleviation-related worries about the sudden tapering in stimulus. Notably, the University of Michigan consumer survey’s one-year inflation expectation dropped to 4.2% in June from a decade-high 4.6% in May while the five-to-10-year inflation expectation fell to 2.8% this month from 3.0% in May.

According to Fundstrat's Tom Lee, “the S&P 500 could soar 3% to 4,400 by this Wednesday,” citing a rally in junk bonds, a collapse in the volatility index, and falling treasury yields that all point to a higher stock market. Lee said that high-yield bonds have historically served as a leading indicator of equities. Meanwhile, the volatility index collapsed below 16 on Jun 25, marking its lowest level since the start of the COVID-19 pandemic. Finally, a decline in treasury yields from their mid-March peak has fueled gains in mega-cap tech stocks, which should continue to drive the market higher.

Investors could tap the surging S&P 500 Index with the best-performing stocks of the first half of 2021. We have highlighted five stocks that have gained more than 50% so far this year and carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), suggesting their continued outperformance in the weeks ahead. You can see the complete list of today’s Zacks #1 Rank stocks here.

L Brands Inc. – Up 94.3%

This company has evolved from an apparel-based specialty retailer to a segment leader focused on women’s intimate and other apparel, personal care, beauty and home fragrance products. It saw a positive earnings estimate revision of 19 cents over the past 90 days for this year and has an estimated earnings growth rate of 67.3%. The stock carries a Zacks Rank #2.

Nucor Corporation (NUE - Free Report) – Up 81.8%

This company is a leading producer of structural steel, steel bars, steel joists, steel deck and cold- finished bars in the United States. The stock saw solid earnings estimate revision of $3.89 over the past 90 days for this year. It has estimated earnings growth of 344.9%. Nucor sports a Zacks Rank #1.

Generac Holdings Inc. (GNRC - Free Report) – Up 74.2%

This is a leading manufacturer of power generation equipment, energy storage systems and other power products including portable, residential, commercial and industrial generators. The stock saw solid earnings estimate revision of $1.41 over the past 90 days for this year and has an estimated earnings growth rate of 56.7%. It has a Zacks Rank #1.

Applied Materials Inc. (AMAT - Free Report) – Up 57.8%

It is one of the world’s largest suppliers of equipment for the fabrication of semiconductor, flat panel liquid crystal displays (LCDs), and solar photovoltaic (PV) cells and modules. The stock saw a positive earnings estimate revision of 55 cents over the past 90 days for the fiscal year (ending October 2021). Applied Materials has estimated earnings growth of 56.6%. AMAT has a Zacks Rank #2.

Invesco Ltd. (IVZ - Free Report) – Up 57.3%

This company operates as an independent investment manager and offers a wide range of investment products and services. It saw massive earnings estimate revision of 17 cents over the past 90 days for this year. The company has an estimated earnings growth rate of 49.2%. The stock has a Zacks Rank #2.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.

See 3 crypto-related stocks now >>