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Tap the Solid Momentum in These 5 Solid High-Beta Stocks

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At the time of writing, U.S. stock futures are up more than 1%. Futures for the Russell 2000 are leading the gains, and crude oil is also gaining. Coronavirus vaccine hopes and recovery in travel pattern during the Memorial Day weekend led to the optimism.

Efforts in formulating a coronavirus vaccine are ramping up. The World Health Organization has recognised some 10 prime candidates for these potential vaccines as these have entered clinical trials. Plus, 114 candidate vaccines are in preclinical evaluation stage. 

Per WHO, these prime candidates for potential vaccine include mRNA-1273 vaccine by Moderna Inc. (MRNA - Free Report) , potential vaccine ‘ChAdOx1 nCoV-19’ from Oxford University, RNA vaccine candidate from the collaboration between U.S.-based Pfizer and German pharmaceutical company BioNtech, and DNA-based vaccine from INOVIO Pharmaceuticals (INO - Free Report) . Novavax (NVAX) said lately that it began human testing of its coronavirus vaccine candidate, and expects preliminary results for the trial in July.

Consumer spending is very important for U.S. economic wellbeing as it contributes 70% of U.S. GDP.The University of Michigan’s U.S. consumer sentiment index came in at 73.7 for May, up from 71.8 in April and way higher than the Dow Jones estimate of 65.

“The CARES relief checks improved consumers’ finances and widespread price discounting boosted their buying attitudes,” per an economist.  According to a new survey from Piper Sandler, about 47% of the respondents say they will head to restaurants as soon as they reopen.

We all know that the leisure industry is the most-hurt by the pandemic. Data from hospitality firm STR showed hotel occupancy up 32.4% for the most recently reported week ended May 16, from 21.0% the period ended Apr 11. However, the latest data is still down 54% year over year. While these developments are upbeat for the markets, mammoth Fed and government stimuli are the other tailwinds. 

Why High-Beta & Momentum Investing Is Intriguing Now

High Beta ETFs

Beta is directly related to market movement. Notably, high-beta funds tend to rise or fall more than the stock market and are thus more volatile. When markets soar, high-beta funds experience larger gains than the broader market counterparts and thus, outpace their rivals. Momentum investing might also be an intriguing idea for those seeking higher returns in a short spell. It looks to reflect profits from buying stocks that are sizzling on the market.

Stock Picks

Against this backdrop, below we highlight a few growth stocks that have a Zacks Rank #1 (Strong Buy), 2 (Buy) and 3 (Hold), a beta greater than one, positive earnings estimate revision of at least 10% for the upcoming year in the past four weeks, price change in the past four weeks and greater than 5% price change in the past 12 weeks. Notably, the S&P 500 has lost 8.4% in the past three months and gained 4.2% past month. This means that the below-mentioned stocks beat the S&P 500 in recent times.

EQT Corporation (EQT - Free Report) ) – Beta 1.37x

The Zacks Rank #2 explorer and producer of natural gas comes from a favorable Zacks industry (placed at the top 16% of total 250+ industries in the Zacks universe). Earnings estimates went up by 27.09% in the past four weeks. Prices rose 9.9% past month and 155.4% in the past three months.

ADTRAN Inc. (ADTN - Free Report) ) – Beta 1.34x

The Zacks Rank #1 manufacturer of services network access solutions for communication networks hails from a favorable Zacks industry (top 2%). Earnings estimates went up by 144.4% in the past four weeks. Prices rose 20.7% past month and 39.5% in the past three months.

Yamana Gold Inc. (AUY) – Beta 1.76x

The Zacks Rank #2 gold producer belongs to afavorable Zacks industry (top 7%). Earnings estimates went up by 10% in the past four weeks. Prices rose 11.2% past month and 29.6% in the past three months.

Etsy Inc. (ETSY - Free Report)  – Beta 1.63x

The Zacks Rank #2 ecommerce player hails from afavorable Zacks industry (top 13%). Earnings estimates went up by 184.9% in the past four weeks. Prices rose 23.3% past month and 33.8% in the past three months.

MEI Pharma Inc. (MEIP - Free Report)  – Beta 1.86x

The Zacks Rank #1 oncology company comes from a favorable Zacks industry (top 9%). Earnings estimates went up by 105.2% in the past four weeks. Prices rose 51.9% past month and 75.5% in the past three months.

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