The market is off to a fantastic start this year.
In fact, we just finished one of the best first-half starts in years, with the S&P notching its 2nd best first-half performance since 1998, gaining 14.4%. They also put in their 5th consecutive quarter of gains.
The other major indexes impressed as well with the Dow up 12.7%, the Nasdaq up 12.5%, and the small-cap Russell 2000 up 17.0%!
With the first half of 2021 now in the record books, the 2nd half could very well be even better, given the robust growth forecast (2021 GDP is expected to come in at the fastest pace in 37 years).
And since first-half gains of this magnitude typically lead to a continuation of gains in the second-half, there’s a lot to be excited about.
But some may be less excited. Quite frankly, some may find the market downright frustrating, as fearful headlines and bouts of volatility have spooked many investors.
Don’t get me wrong, there are plenty of investors handily beating the market.
But too many are underperforming.
One of the reasons why so many people are not seeing the kinds of returns they want is because they don’t know of new stocks to get into. They find themselves in mediocre stocks because they don’t know of anything better instead.
I think for some, their knowledge or ‘universe’ of familiar stocks is relatively small and this limits their opportunity of getting into better ones.
Which Half Are You In?
Roughly half of the companies in the S&P are beating the index and showing positive returns this year. But that means roughly half of the stocks in the S&P 500 are underperforming the Index.
Even ‘good’ companies like Dollar Tree; they’re down -7.9%. Or Clorox; which is down -10.9%. Or Take-Two Interactive; down -14.8%. So what gives?
I don’t single these out so you can feel bad if you have them. But instead, to stop and think about ‘why’ you have them.
Nobody invests so they can underperform the market. But if you are -- why? You don’t have to. If you’re underperforming the market, that means you have more of these types of laggards in your portfolio than leaders.
How the Other Half Lives
Of course, there are a lot of big names beating the S&P too. Take Target, or General Motors, or Exxon Mobile for example. All are outperforming the S&P with gains of +37%, +42% and +53% respectively.
But now let’s move outside of the S&P.
Did you ever hear of a company called OptimizeRx? What if you did? It has outperformed the market by gaining +98.7% since the start of the year. Or Grindrod Shipping? They’re up +159.5%. Or Apollo Medical? Up by +243.8%. (By the way, these are all Zacks #1 Rank stocks.)
There are hundreds and hundreds of stocks producing fantastic gains that many people may never have even heard of.
What about you? How many times have you heard about a stock or read about a stock that skyrocketed – only to think to yourself; “if only I knew about that stock ahead of time, I would have been in that.”
Continued . . .
------------------------------------------------------------------------------------------------------
Alert: Buy these Ultimate Four Stocks Monday
There’s still time to get in early. These aren’t just 4 promising stocks. From hundreds of strong companies, they were handpicked by Zacks’ experts because they present the greatest upside potential for Q3.
One is a leading U.S. beauty retailer poised to hit new all-time highs thanks to reopening and a new partnership. Another is one of the largest AI and Internet companies in the world with exposure to exponentially growing markets. To learn more and discover the other two stocks with exceptional gain potential over the next 3 months, download our report - free.
The deadline to access our newly released Ultimate Four Special Report is midnight Monday, July 5.
See Stocks Now >>
------------------------------------------------------------------------------------------------------
Expand Your Universe and Pick Better Stocks
Increasing your stock knowledge and awareness of new and better stocks is easier than you think. And you don’t have to reinvent the wheel.
• For example, stocks with a Zacks Rank #1 Strong Buy have beaten the market in 26 of the last 32 years with an average annual return of 24.7% per year. That's nearly 2.5 x the S&P with an 81% annual win ratio. And when doing this year after year, that can add up to a lot more than just two and a half times the returns.
• Stick with the top industries. Since roughly half of a stock’s price movement can be attributed to the group that it’s in, you’ll significantly increase your odds of success by focusing on the best groups. By how much? Our tests have shown that the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of 2 to 1. And the top 10% of industries outperform the most.
Once you know what to look for, and how to pick better stocks, it can transform your portfolio.
You don’t need to turn yourself into an analyst to beat the market. Just focus on what works, and apply those methods consistently.
But you’re not there yet, as those two items alone will only narrow down a field of 10,000 stocks to the top 150 or so. Still too many to trade at once.
So the next step is to get that list down to a smaller, actionable list of stocks that are right for you.
Know Thyself
It’s important to know what kind of trader you are, or want to be.
There are many different investing styles out there. The four main fundamental styles are Momentum, Aggressive Growth, Value, and Growth and Income. You can also apply Technical Analysis to any of these styles, and others as well.
Just make sure you employ proven stock picking techniques to get the most out of each style.
Did You Know
If you're an Aggressive Growth investor; did you know that stocks with the highest growth rates perform almost as poorly as those with the lowest growth rates? It's true.
This is because companies with the highest growth rates are often unsustainable. And once those sky-high growth rates start to come down, even though they may still be spectacular, the price of the stock will fall back down to earth as well.
For example, a company earning 1 cent a share, that is now expected to earn 6 cents, has a 500% growth rate. But, if it receives a downward estimate revision to 5 cents, that’s a significant drop. Even though it still has a 400% growth rate, the estimates were just reduced by -16.7% and the price is likely to follow.
If you’ve ever wondered how a stock with a triple-digit growth rate could possibly go down -- that’s how.
Instead, I have found that comparing a stock to the median growth rate for its industry is the best way to find solid outperformers with a lesser chance to disappoint. And focusing on companies with growth rates above the median, but less than 50%, has produced some of the best results.
If you're a Value investor; do you know which valuation metrics produce the best results? Better yet, do you know what valuation ranges have the highest probability of success?
In my testing, I have found that the Price to Sales ratio (P/S) is one of the best valuation metrics out there. And that stocks with a P/S ratio of less than 1, by far, produce the highest returns. Between 1-2 still produce stellar results. And between 2-3 outperform the market. But once you get over 4, there is a higher probability of losing on that stock than winning.
That, of course, does not mean all stocks with a P/S ratio above 4 will go down. But if the odds of winning are greater below 1 (or at least below 3) and worse above 4, then by simply focusing on stocks in the optimum valuation range, you are now one step closer to picking a winner.
Stock Picking Secrets of the Pros
One of the best ways to get into winning stocks is to see what the pros, who use these methods, are picking.
Whether you’re a growth investor, or a value investor, prefer fast-paced momentum stocks, or mature dividend-paying income stocks, there are certain rules the experts follow to maximize their gains.
This applies to large-caps and small-caps, biotech and high-tech, ETF’s, stocks under $10, stocks about to surprise, even options, and everything in between.
Regardless of which one fits your personal style of trade, just be sure you’re following proven profitable methods and strategies that work, from experts who have demonstrated their ability to beat the market.
The best part about these strategies and stock picks is that all of the hard work is done for you. There’s no guesswork involved. Just follow the experts and start confidently getting into better stocks on your very next trade.
The Pros’ Best Picks for Today
Here's an easy way to find them:
Download our just-released Ultimate Four Special Report.
It highlights 4 stocks with strong fundamentals that are handpicked by our experts to have the biggest upsides for Q3.
There’s no better time to look into these companies. With consumers starting to spend and travel, an unprecedented level of pent-up demand is being unleashed.
Experts predict historic economic growth and these 4 stocks are predicted to jump sooner and climb higher than others:
Stock #1: One of the largest AI and Internet companies in the world, this strong cash generating business has exposure to exponentially growing markets where it has strong advantages.
Stock #2: This leading U.S beauty retailer is a Zacks Rank #1 (Strong Buy) poised to hit new all-time highs thanks to pent-up demand that comes with reopening and a new partnership.
Stock #3: The backbone of innovation for global electronics, this enterprise gives investors a prudent way to invest in the semiconductor and electronics space going into the exploding 4th Industrial Revolution.
Stock #4: The booming housing market gives this homebuilding pick the potential for the most upside amongst other companies in its industry on the back of strong order outlook and demand.
I suggest you beat other investors to the punch and download this Special Report today. This rare opportunity to boost your portfolio ends midnight Monday, July 5.
See our Ultimate Four stocks now >>
Thanks and good trading,
Kevin
Kevin Matras serves as Executive Vice President of Zacks.com and is responsible for all of its leading products for individual investors. He invites you to download Zacks' newly released Ultimate Four Special Report before Monday’s deadline.
The results listed above are not (or may not be) representative of the performance of all selections made by Zacks Investment Research's newsletter editors and may represent the partial close of a position.
Image: Bigstock
A Tale of Two Investors, Which One Are You?
The market is off to a fantastic start this year.
In fact, we just finished one of the best first-half starts in years, with the S&P notching its 2nd best first-half performance since 1998, gaining 14.4%. They also put in their 5th consecutive quarter of gains.
The other major indexes impressed as well with the Dow up 12.7%, the Nasdaq up 12.5%, and the small-cap Russell 2000 up 17.0%!
With the first half of 2021 now in the record books, the 2nd half could very well be even better, given the robust growth forecast (2021 GDP is expected to come in at the fastest pace in 37 years).
And since first-half gains of this magnitude typically lead to a continuation of gains in the second-half, there’s a lot to be excited about.
But some may be less excited. Quite frankly, some may find the market downright frustrating, as fearful headlines and bouts of volatility have spooked many investors.
Don’t get me wrong, there are plenty of investors handily beating the market.
But too many are underperforming.
One of the reasons why so many people are not seeing the kinds of returns they want is because they don’t know of new stocks to get into. They find themselves in mediocre stocks because they don’t know of anything better instead.
I think for some, their knowledge or ‘universe’ of familiar stocks is relatively small and this limits their opportunity of getting into better ones.
Which Half Are You In?
Roughly half of the companies in the S&P are beating the index and showing positive returns this year. But that means roughly half of the stocks in the S&P 500 are underperforming the Index.
Even ‘good’ companies like Dollar Tree; they’re down -7.9%. Or Clorox; which is down -10.9%. Or Take-Two Interactive; down -14.8%. So what gives?
I don’t single these out so you can feel bad if you have them. But instead, to stop and think about ‘why’ you have them.
Nobody invests so they can underperform the market. But if you are -- why? You don’t have to. If you’re underperforming the market, that means you have more of these types of laggards in your portfolio than leaders.
How the Other Half Lives
Of course, there are a lot of big names beating the S&P too. Take Target, or General Motors, or Exxon Mobile for example. All are outperforming the S&P with gains of +37%, +42% and +53% respectively.
But now let’s move outside of the S&P.
Did you ever hear of a company called OptimizeRx? What if you did? It has outperformed the market by gaining +98.7% since the start of the year. Or Grindrod Shipping? They’re up +159.5%. Or Apollo Medical? Up by +243.8%. (By the way, these are all Zacks #1 Rank stocks.)
There are hundreds and hundreds of stocks producing fantastic gains that many people may never have even heard of.
What about you? How many times have you heard about a stock or read about a stock that skyrocketed – only to think to yourself; “if only I knew about that stock ahead of time, I would have been in that.”
Continued . . .
------------------------------------------------------------------------------------------------------
Alert: Buy these Ultimate Four Stocks Monday
There’s still time to get in early. These aren’t just 4 promising stocks. From hundreds of strong companies, they were handpicked by Zacks’ experts because they present the greatest upside potential for Q3.
One is a leading U.S. beauty retailer poised to hit new all-time highs thanks to reopening and a new partnership. Another is one of the largest AI and Internet companies in the world with exposure to exponentially growing markets. To learn more and discover the other two stocks with exceptional gain potential over the next 3 months, download our report - free.
The deadline to access our newly released Ultimate Four Special Report is midnight Monday, July 5.
See Stocks Now >>
------------------------------------------------------------------------------------------------------
Expand Your Universe and Pick Better Stocks
Increasing your stock knowledge and awareness of new and better stocks is easier than you think. And you don’t have to reinvent the wheel.
• For example, stocks with a Zacks Rank #1 Strong Buy have beaten the market in 26 of the last 32 years with an average annual return of 24.7% per year. That's nearly 2.5 x the S&P with an 81% annual win ratio. And when doing this year after year, that can add up to a lot more than just two and a half times the returns.
• Stick with the top industries. Since roughly half of a stock’s price movement can be attributed to the group that it’s in, you’ll significantly increase your odds of success by focusing on the best groups. By how much? Our tests have shown that the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of 2 to 1. And the top 10% of industries outperform the most.
Once you know what to look for, and how to pick better stocks, it can transform your portfolio.
You don’t need to turn yourself into an analyst to beat the market. Just focus on what works, and apply those methods consistently.
But you’re not there yet, as those two items alone will only narrow down a field of 10,000 stocks to the top 150 or so. Still too many to trade at once.
So the next step is to get that list down to a smaller, actionable list of stocks that are right for you.
Know Thyself
It’s important to know what kind of trader you are, or want to be.
There are many different investing styles out there. The four main fundamental styles are Momentum, Aggressive Growth, Value, and Growth and Income. You can also apply Technical Analysis to any of these styles, and others as well.
Just make sure you employ proven stock picking techniques to get the most out of each style.
Did You Know
If you're an Aggressive Growth investor; did you know that stocks with the highest growth rates perform almost as poorly as those with the lowest growth rates? It's true.
This is because companies with the highest growth rates are often unsustainable. And once those sky-high growth rates start to come down, even though they may still be spectacular, the price of the stock will fall back down to earth as well.
For example, a company earning 1 cent a share, that is now expected to earn 6 cents, has a 500% growth rate. But, if it receives a downward estimate revision to 5 cents, that’s a significant drop. Even though it still has a 400% growth rate, the estimates were just reduced by -16.7% and the price is likely to follow.
If you’ve ever wondered how a stock with a triple-digit growth rate could possibly go down -- that’s how.
Instead, I have found that comparing a stock to the median growth rate for its industry is the best way to find solid outperformers with a lesser chance to disappoint. And focusing on companies with growth rates above the median, but less than 50%, has produced some of the best results.
If you're a Value investor; do you know which valuation metrics produce the best results? Better yet, do you know what valuation ranges have the highest probability of success?
In my testing, I have found that the Price to Sales ratio (P/S) is one of the best valuation metrics out there. And that stocks with a P/S ratio of less than 1, by far, produce the highest returns. Between 1-2 still produce stellar results. And between 2-3 outperform the market. But once you get over 4, there is a higher probability of losing on that stock than winning.
That, of course, does not mean all stocks with a P/S ratio above 4 will go down. But if the odds of winning are greater below 1 (or at least below 3) and worse above 4, then by simply focusing on stocks in the optimum valuation range, you are now one step closer to picking a winner.
Stock Picking Secrets of the Pros
One of the best ways to get into winning stocks is to see what the pros, who use these methods, are picking.
Whether you’re a growth investor, or a value investor, prefer fast-paced momentum stocks, or mature dividend-paying income stocks, there are certain rules the experts follow to maximize their gains.
This applies to large-caps and small-caps, biotech and high-tech, ETF’s, stocks under $10, stocks about to surprise, even options, and everything in between.
Regardless of which one fits your personal style of trade, just be sure you’re following proven profitable methods and strategies that work, from experts who have demonstrated their ability to beat the market.
The best part about these strategies and stock picks is that all of the hard work is done for you. There’s no guesswork involved. Just follow the experts and start confidently getting into better stocks on your very next trade.
The Pros’ Best Picks for Today
Here's an easy way to find them:
Download our just-released Ultimate Four Special Report.
It highlights 4 stocks with strong fundamentals that are handpicked by our experts to have the biggest upsides for Q3.
There’s no better time to look into these companies. With consumers starting to spend and travel, an unprecedented level of pent-up demand is being unleashed.
Experts predict historic economic growth and these 4 stocks are predicted to jump sooner and climb higher than others:
Stock #1: One of the largest AI and Internet companies in the world, this strong cash generating business has exposure to exponentially growing markets where it has strong advantages.
Stock #2: This leading U.S beauty retailer is a Zacks Rank #1 (Strong Buy) poised to hit new all-time highs thanks to pent-up demand that comes with reopening and a new partnership.
Stock #3: The backbone of innovation for global electronics, this enterprise gives investors a prudent way to invest in the semiconductor and electronics space going into the exploding 4th Industrial Revolution.
Stock #4: The booming housing market gives this homebuilding pick the potential for the most upside amongst other companies in its industry on the back of strong order outlook and demand.
I suggest you beat other investors to the punch and download this Special Report today. This rare opportunity to boost your portfolio ends midnight Monday, July 5.
See our Ultimate Four stocks now >>
Thanks and good trading,
Kevin
Kevin Matras serves as Executive Vice President of Zacks.com and is responsible for all of its leading products for individual investors. He invites you to download Zacks' newly released Ultimate Four Special Report before Monday’s deadline.
The results listed above are not (or may not be) representative of the performance of all selections made by Zacks Investment Research's newsletter editors and may represent the partial close of a position.