If you’re looking for four stocks that could inject your portfolio with healthy gains for the remainder of the year, look no further…
Amazon.com (AMZN), ServiceNow (NOW), Insulet (PODD), and Charter Communications (CHTR) are four stocks that passed my strict “high-growth” screener. These are companies with a history of strong growth and are forecasted to have robust growth in the upcoming quarters. They also have business models that are unlikely to be affected by the market’s current uncertainty.
Heading into October, many investors feared another down month due to a view that the markets are historically down in October. The problem is, that isn’t true. There’s actually a name for that, called the “October Effect.” Aside from the infamous October 1987, stocks have typically done well in October. In addition to that, a strong third quarter is usually followed by a strong fourth quarter, according to LPL Financial’s Ryan Detrick.
That’s not to say we won’t see volatility over the next few months, especially in a year that has been full of surprises. We are heading into the November 3rd presidential election, and the third-quarter earnings season kicked off this week. FactSet expects third-quarter earnings for companies in the S&P 500 to decline by an average of 21.8%. We could see a repeat of last quarter when many companies outperformed analyst expectations, or earnings could come in as expected. Either way, if you own a select group of high-growth companies with strong catalysts for growth, your portfolio should benefit.
AMZN certainly belongs on this list with a five-year average earnings growth rate of 106.5%. Earnings are expected to grow 40.2% next year, and revenues at 18%. To say AMZN has had a good year is an understatement. The stock is up 67.8% year to date, led by a spike in online orders due to the coronavirus. AMZN is the undisputed e-commerce heavyweight of the world, and the pandemic played right into its hands.
The company has also seen a strong adoption rate of its AWS product, which is only reinforcing its case as the dominant cloud company. AMZN is also the leader in the $5.7 billion smart speaker market. It recently announced a ton of new hardware products, including a collection of 4th generation Echo smart speakers, new Fire TV Stick video streamers, Eero Wi-Fi routers, and new Ring security cameras.
Adding to this, AMZN’s Prime Day, which is its biggest shopping event of the year, will be taking place on October 13 and 14. Last year’s Prime Day surpassed the company’s 2018 Black Friday and Cyber Monday combined. So, it’s no surprise AMZN is rated a “Buy” in our POWR Ratings system. It has an “A” Trade Grade, and grades of “B” for Buy & Hold Grade, Peer Grade, and Industry Rank. It is also ranked #9 in the Internet industry.
Another cloud company with very strong growth potential is NOW. The firm provides software solutions to structure and automate various business processes via a SaaS delivery model. The company primarily focuses on the IT function for enterprise customers and had one hell of a year with earnings growing 1944.4%. Its five-year revenue growth rate is 33.9%, and analysts expect the company to grow revenues 24.5% and earnings 24.2% next year.
The company is poised to benefit from strong growth in subscription revenues. During the second quarter, the company announced that it closed 40 transactions that totaled more than…
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