The stock market has time and gain been one of the best bets for a long-term investor. This is because it has been able to quite consistently defy pessimists and their calls for short-term market corrections. It has in fact remained bullish far longer than many expected.
For instance, when the coronavirus pandemic impacted the economy and dragged the stock market down last year, few had thought that stocks would get their mojo back anytime soon. Yet, stocks have not only bounced back from the drubbing it took last year, major indexes in fact saw their best first half this year since 2019. What’s more, the stock market has witnessed the second-best first half in 23 years.
The S&P 500 has risen 14.4% so far this year, way better than the index’s 7% drop during the first six-month period of last year, and registered its second-best first-half gains since 1998. On Jun 30, the broader index clinched its 34th record close of the year and ended five straight months in the positive territory.
The Dow, in the meantime, added 12.7% year to date and the tech-laden Nasdaq’s first-half returns were also impressive, up 12.5%. The Nasdaq, in reality, pulled off its 19th record close of the year. All in all, the three primary indexes posted double-digit gains in the first half, with returns fairly close to each other.
Investors actually kept buying stocks in hopes of economic recovery this year. Increased coronavirus-led curbs bolstered hopes that the economy will recoup from the virus-led damage faced last year and vis-à-vis business activities will gain traction. Several companies, by the way, have started to ramp up production as they grew more optimistic about economic growth in the near future, and orders for nondefense capital goods have improved considerably.
WallStreet Journal article, the Commerce Department in fact stated that non-residential fixed investment, known to be a proxy for business outlays, improved at a seasonally adjusted rate of 11.7% in the first quarter. Business spending also improved in the third and fourth quarter of last year after nosediving during the pandemic-led lockdown period. At the same time, consumers’ outlays are increasing at present, thanks to an array of stimulus measures taken by the government to bolster their financial situation.
Talking about consumers, their confidence level has improved in recent times with the U.S. consumer confidence index touching its highest level in nearly 1-1/2 years last month, per the Conference Board, quoting a
Reuters article. Consumers’ confidence improved on optimism of recovery in the labor market and improvement in economic conditions.
Meanwhile, economic recovery raised concerns about higher inflation, a potential dampener for the stock market’s upward movement. However, the Fed assured that the bump in inflation will be temporary. Once the disparity between supply and demand is resolved, inflation will be under control.
Nonetheless, improvement in the pace of vaccination not only fueled growth in the first half but also eased concerns about new waves of the deadly virus hampering such growth in the second half. Citing a
CNBC article, nearly 60% of adult U.S. citizens have already received a COVID-19 vaccine, helping the economy operate at a full scale and at a rapid pace, thereby prompting many analysts to raise price targets of the major indexes for the second half of 2021.
Thus, it’s imperative for astute investors to place their bets on stocks that actually made the most of the bullish run in the first half and are expected to continue to do so for the rest of the year and beyond. We have selected four such stocks that currently flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here. Chico's FAS, Inc. ( CHS Quick Quote CHS - Free Report) operates as an omnichannel specialty retailer of women's accessories. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 46.9% over the past 60 days. The company’s expected earnings growth rate for the current and next year is 94.5% and 329.4%, respectively. The stock has already gained nearly 295% year to date. Build-A-Bear Workshop, Inc. ( BBW Quick Quote BBW - Free Report) operates as a multi-channel retailer of plush animals and related products. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 181.8% over the past 60 days. The company’s expected earnings growth rate for the current and next year is 190.3% and 32.3%, respectively. The stock has already gained 289.2% year to date. 3D Systems Corporation ( DDD Quick Quote DDD - Free Report) provides 3D printing and digital manufacturing solutions. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 48% over the past 60 days. The company’s expected earnings growth rate for the current and next year is 436.4% and 10.8%, respectively. The stock has already gained 266.4% so far this year. Apollo Medical Holdings, Inc. ( AMEH Quick Quote AMEH - Free Report) is a physician-centric technology-powered healthcare management company. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved up 20.8% over the past 60 days. The company’s expected earnings growth rate for the current and next year is 26.7% and 24.2%, respectively. The stock has already gained 241.4% so far this year. Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>