Gearing up for 2017, we are on the finishing line of a super volatile year. As has been widely observed, 2016 was marked by varied events like a slowdown in the Chinese market, softness in the energy space, hype over Brexit, the U.S. Presidential election and the recent Fed rate hike which fueled volatility.
Though the year had started on a soft note, the bourses are presently in the green zone, with the S&P 500, NASDAQ Composite and Dow Jones Industrial Average up nearly 11%, 9.6% and 14.5%, respectively, on a year-to-date basis. The stock market gained significant traction after Donald Trump’s victory over Hillary Clinton, and further welcomed Fed’s decision to raise the benchmark interest rate by a quarter of a percentage point to 0.5–0.75%. Clearly, the rate hike hints at a stabilized domestic economy, which is likely to sustain its momentum into 2017. Improved consumer spending, lower oil prices and enhanced labor market raise optimism over the health of the economy. However, the market remains susceptible to global uncertainties. Also, it remains to be seen how Trump’s revolutionary ideas are going to shape the economy. That said, investors must rejuvenate their portfolios and prepare to brace every situation as they enter the New Year 2017. Given the mixed signals, it is advisable to play safe and invest in growth stocks rather than in momentum or value ones. The increasing market volatility makes the momentum strategy highly risky, while value investing does not find many takers in the current scenario. Growth stocks, on the other hand, are fundamentally strong businesses aiming to make money for investors over the long run, thereby hedging the short run stock market volatility. Picking the Right Stocks Based on certain parameters, we have zeroed in on four growth stocks which are poised for impressive returns in 2017. These stocks boast a solid Zacks Rank #1 (Strong Buy), have a Growth Style Score of ‘A,’ VGM Style Score of ‘A’ or ‘B,’ expected earnings growth rate of 55% or more and a market cap of over $100 million. You can see the complete list of today’s Zacks #1 Rank stocks here. We note that our Growth Style Score encompasses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of growth. Our research shows that stocks with Growth Style Scores of ‘A’ or ‘B’ when combined with a Zacks Rank #1 or 2 offer the best investment opportunities in the growth investing space. (You can read more about the Zacks Style Scores here >>) 4 Solid Bets Investors can count on Acacia Research Corporation ACTG, which develops, acquires, and licenses patented technologies through its subsidiaries. The company, with a VGM Score of ‘A,’ posted an average positive earnings surprise of 551.8% in the trailing four quarters and has a long-term earnings growth rate of 20%.
On a year-to-date basis, the stock has surged roughly 58.5% and crushed the Zacks categorized
Business Services industry, which declined 7.5%. Further, the company’s earnings estimate for this year stands at 49 cents per share, considerably higher than a loss of 4 cents reported in the prior year. The company has a market cap of $343.2 million. Forget the gym, finding great stocks should be your New Year's resolution! Don't miss out on our new Top 10 Stocks for 2017 list, which has been hand-picked from 4,400 stocks covered by the Zacks Rank. Be one of the first to see this year's list here>> America's Car-Mart, Inc. ( CRMT Quick Quote CRMT - Free Report) , which operates automotive dealerships as one of the largest automotive retailers in the U.S., is a solid bet with a VGM Score of “B”. With a market cap of $353.2 million, the company posted an average positive earnings surprise of 15.7% in the trailing four quarters and has an estimated earnings growth rate of about 81% for this year. Notably, the stock has surged 67.5% year to date and has considerably outperformed the Zacks categorized Retail/Wholesale – Auto/Truck industry, which increased only 1.9%. You may also consider Willdan Group, Inc. WLDN, a provider of professional technical and consulting services to utilities, private industry, and public agencies at all levels of government. The stock sports a VGM Score of “B” and possesses market cap of roughly $180 million. The company posted an average positive earnings surprise of 18.7% in the trailing four quarters and has an estimated earnings growth rate of 82.7% for this year. Year to date, the stock has displayed a fabulous run on the index and has risen over 150%, while the Zacks categorized Engineering/R&D Services industry increased just 29%. Last but not the least is Control4 Corporation CTRL, which is engaged in providing automation and control solutions for the connected home. The stock has a VGM Score of “A” and a solid market cap of $257.7 million. Further, the company has a long-term earnings growth rate of 17.5%, while for this year, its earnings per share estimate is currently pegged at 44 cents, significantly higher that 4 cents recorded in the year-ago period. To add to the positives, the stock has exhibited a bullish run and surged 49.9% year to date, while the Zacks categorized Electronic Products – Miscellaneous industry increased 25.5%.
As you gear up for New Year celebrations, invest in these stocks as they’re most likely to rake in great returns in 2017.