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Year of the Pig Brings Good Tidings for Wall Street: 5 Picks

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The Chinese Year of the Pig, which started on Feb 5, has been traditionally favorable for the U.S. stock market.

A positive start to the earnings season, Fed’s dovish stance, trade truce between the United States and China, at least for the time being, and end of partial government shutdown should provide momentum to stocks in the near future. These positives will eventually offset concerns stemming from a global economic slowdown.

What Does Year of the Pig Mean for the US Stock Market?

The U.S. stock market, as predominantly measured by the S&P 500, has always performed in-line with the index’s overall average since 1928, according to Stansberry Pacific Research. But, during the Year of the Pig, the index’s historical performance of 18.1% has been higher than the index’s overall average of 11.4%. The performance, in fact, has been much more robust than the MSCI Asia ex-Japan Index over the said period.

Though a few may be skeptical about investing based on stars, the Year of the Pig has certainly started on a bullish note. While major indexes have moved north so far this month, the S&P 500 and Dow, in particular, advanced more than 7% last month, registering their biggest gains since January 1987 and January 1989, respectively. This is indeed an amazing recovery considering the fact that last December was one of the worst months for stocks in almost 90 years.

Catalysts Behind the Surge

Upbeat corporate earnings, undoubtedly, helped stocks move north so far this year. According to Bespoke Investment Group, companies that have reported earnings results so far this season have seen their share prices rise 1.12% on average. If such a performance continues, it will be the best earnings season in terms of stock performance in nine years.

Relatively dovish Fed comments and U.S.-China trade talks in Washington were other notable developments that drove markets. At the conclusion of its latest two-day policy meeting, the Fed confirmed that it would be “patient” with future rate hikes and has also indicated that unwind of the asset portfolio could conclude sooner than expected. Such views were mostly considered as accommodative measures and have had a soothing effect on investors.

President Trump, in the meantime, confirmed that trade talks with Beijing are “doing very well”    and sounded pretty confident that an agreement with North Korea is expected sooner than later. On the domestic side, senators from both sides of the aisle also agreed to introduce an amendment that will temporarily reopen part of the government. While it may be too early to predict when the shutdown will end completely, at least it seems lawmakers are in mood to resolve the issue. Such a positive development, no doubt, buoyed Wall Street.

5 Biggest Gainers

Given the bullishness, investing in stocks that can make the most of the Year of the Pig seems judicious. We have, thus, selected five such stocks that are poised to yield stellar returns this calendar year that constitute bulk of the Year of the Pig.

These stocks also flaunt a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.

Booz Allen Hamilton Holding Corporation (BAH - Free Report) provides management and technology consulting, engineering, analytics, digital, mission operations, and cyber solutions to governments, corporations, and not-for-profit organizations in the United States. The Zacks Consensus Estimate for its current-year earnings increased 0.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 31.8%, higher than the Government Services industry’s growth of 22%.

The Marcus Corporation (MCS - Free Report) owns and operates movie theatres, and hotels and resorts. The Zacks Consensus Estimate for its current-year earnings increased 1.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 24%, higher than the Leisure and Recreation Services industry’s growth of 7.8%.

Shoe Carnival, Inc. (SCVL - Free Report) operates as a family footwear retailer in the United States. The Zacks Consensus Estimate for its current-year earnings increased 1.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 62.4%, higher than the Retail - Apparel and Shoes industry’s growth of 11.7%.

SkyWest, Inc. (SKYW - Free Report) operates a regional airline in the United States. The Zacks Consensus Estimate for its current-year earnings increased 0.2% over the past 60 days. The company’s expected earnings growth rate for the current quarter is 8.7%, in contrast to the Transportation - Airline’s projected decline of 30.7%.

Casey's General Stores, Inc. (CASY - Free Report) operates convenience stores under the Casey's and Casey's General Store names. The Zacks Consensus Estimate for its current-year earnings moved 8.1% up over the past 60 days. The company’s expected earnings growth rate for the current year is 32.6%, higher than the Retail - Convenience Stores industry’s growth of 9.1%.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>



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