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Trump, Kim Clinch Historic Deal: 6 Top-Ranked Winners

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Exceptional bonhomie was on display when President Trump and North Korea’s leader Kim Jong Un met in Singapore on Tuesday. This was the first meeting between a sitting U.S. President and a North Korean chairman.

The meeting seemed to go off unexpectedly well, considering it was preceded by threats from both sides. Ultimately, Trump and Kim signed a document which calls for the complete denuclearization of the Korean peninsula.

Several analysts have criticized the agreement, saying that it is short of specifics. But markets are likely to be impressed that an agreement has been reached at after all. A lasting détente could take a long-standing concern off investors’ plates. Investing in consumer discretionary and technology stocks, the two best performing sectors of the year looks like a smart option at this point.  

Complete Denuclearization on the Anvil

At the end of the maiden meeting between a North Korean leader and a U.S. President, an agreement was signed committing to complete denuclearization of the Korean Peninsula. Additionally, the two countries promised to make efforts to create a lasting “peace regime” across Korea.

On being asked about when said denuclearization would take place, Trump quipped:  "We're starting that process very quickly — very, very quickly." The U.S. President also claimed that the Korean conflict “will end soon.” In return the United States has promised to address concerns that it wished to affect a regime change in North Korea.

War Games to End, Follow-Up Negotiations Planned

The “comprehensive” document also entails that the two sides will continue to meet for follow-up negotiations and will seek to improve bilateral relations. Specifically, U.S. Secretary of State, Mike Pompeo and senior officials from the North Korean side will conduct further negotiations.

Trump also stated that the United States will cease to conduct “very provocative” war games near North Korea. This will help the United States save “a tremendous amount of money.”

However, the United States would not be removing any troops from the Korean Peninsula at this point. Sanctions would also remain firmly in place.  

Our Choices

Critics of the freshly concluded agreement point out that it is low on specifics. However, it is certainly a milestone, considering that even a meeting between the United States and North Korea seemed unlikely a few months ago. The development is likely to gladden investors since it addresses a lingering and prominent concern.

Consumer discretionary and technology stocks, the best performing sectors of the year, are likely to receive a major boost from to the positive sentiment generated by these developments. Adding these stocks to your portfolio looks like a smart option at this point. However, picking winning stocks may be difficult.

This is where our VGM Score comes in. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM Score. 

We have narrowed down our search to the following stocks, each of which has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

Seagate Technology Plc (STX - Free Report) is the second-largest manufacturer of hard disk drives (HDDs) in the United States.

Seagate Technology’s expected earnings growth for the current year is 29.6%. The Zacks Consensus Estimate for the current year has improved by 0.9% over the last 30 days.

Western Digital Corporation (WDC - Free Report) is one of the largest HDD producers in the United States.

Western Digital’s expected earnings growth for the current year is 45.8%. The Zacks Consensus Estimate for the current year has improved by 0.1% over the last 30 days.

Micron Technology, Inc. (MU - Free Report) has established itself as one of the leading worldwide providers of semiconductor memory solutions.

Micron Technology’s expected earnings growth for the current year is more than 100%. The Zacks Consensus Estimate for the current year has improved by 4.7% over the last 30 days.

Delta Apparel, Inc. (DLA - Free Report) is a designer, manufacturer and marketer of a wide range of lifestyle basics and active wear apparel and related accessories.

Delta Apparel’s projected growth rate for the current year is 12.8%. The Zacks Consensus Estimate for the current year has improved by 11.1% over the last 60 days.

Malibu Boats, Inc. (MBUU - Free Report) operates as a designer, manufacturer and marketer of sports boats primarily in the United States.

Malibu Boats’ expected earnings growth of 51.5% for the current year. The Zacks Consensus Estimate for the current year has improved by 8.4% over the last 60 days.

Rocky Brands, Inc. (RCKY - Free Report) is a leading designer, manufacturer and marketer of premium quality footwear and apparel.

Rocky Brands’ expected earnings growth of 29.3% for the current year. The Zacks Consensus Estimate for the current year has improved by 7.1% over the last 60 days.

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