Nasdaq Nabs New Highs: 5 Must-Buy Growth Stocks

The Nasdaq composite climbed 2.21% to close at new high of 10,433.65 on Jul 6. The index’s astonishing rise from the lows hit in March has been primarily driven by technology stocks that have shown remarkable resilience amid the coronavirus outbreak. Notably, Nasdaq is up 16.3% year to date.

Moreover, unprecedented government stimulus, phased reopening of U.S. economy post coronavirus-induced lockdowns and shelter-in-place guidelines, improving consumer confidence and declining unemployment rate pumped up the tech-laden index.

Markedly, the latest economic data set bolsters optimism over steady revival of a coronavirus-ravaged economy.

Per IHS Markit’s latest report, U.S. Services Business Activity Index registered 47.9 at the end of the second quarter compared with the preliminary figure of 46.7 and May’s 37.5. More importantly, the report stated that business confidence returned to positive territory at the end of the second quarter.

Apart from steady economic revival, the momentum in Nasdaq will continue primarily fueled by changing consumer preference and behavior.

Stay-at-home is now the new normal as we are learning to live with the virus for a significant stretch. This is boosting demand for web-based services like e-commerce, contactless payment and delivery.

In fact, the spike in coronavirus cases in the United States bodes well for the index. The company’s offering remote-working tech, cloud services and cybersecurity solutions, which support work-from-home, online learning and remote health diagnosis, are expected to benefit the most.

Here we pick five Nasdaq-listed stocks that apart from boasting strong fundamentals have a favorable combination of a Growth Score of A and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Per the Zacks’ proprietary methodology, stocks with such a perfect mix of elements offer solid investment opportunities.

Notably, each of these stocks has a market cap of more than $1 billion and has outperformed the S&P 500 composite on a year-to-date basis.

Year-to-Date Performance

Top Bets

Zoom Video Communications ZM is riding on the coronavirus-induced work-from-home trend. Moreover, this $73.10-billion company’s efforts to eliminate the security and privacy loopholes like “zoombombing” are expected to help maintain its existing enterprise user base as well as attract more customers.

The Zacks Consensus Estimate for its fiscal 2021 earnings is pegged at $1.18 per share, having been raised 174.4% in the past 60 days.

Smith & Wesson Brands SWBI is gaining on the well-performing Firearm segment. Increasing orders from retailers and distributors driven by heightened consumer demand for firearms are acting as a tailwind. Further, the company’s flexible manufacturing model, strong portfolio of Shield EZ pistols and strengthening e-commerce platform remain major positives.

Smith & Wesson Brands currently has a market cap of $1.26 billion. The consensus mark for its fiscal 2021 earnings has climbed 109.4% to $1.78 per share over the past 60 days, suggesting a year-over-year improvement of 117.1%.

Sprouts Farmers Market SFM benefits from coronavirus-led demand spike. This company focuses on product innovation, e-commerce, private label assortment and technology.

Sprouts Farmers has a market cap of $2.93 billion. The consensus mark for its 2020 earnings is pegged at $1.69 per share, having been revised 21.6% upward in the past 60 days.

Fortinet FTNT is gaining from rising cyber-attack risks that are propelling demand for its FortiMail platform, which can be used to block specific file types containing certain keywords, such as those related to coronavirus. This company is also capable of sending attachments to the FortiSandbox solution to check whether the file displays any malicious activity.

The Zacks Consensus Estimate for this $22.38-billion company’s 2020 earnings stands at $2.81 per share, having moved 9.3% north over the past 60 days.

Pool Corp POOL benefits from its expansion strategy, robust base business and healthy balance sheet. Growth trajectory of this $10.79-billion company is driven by accretive acquisitions. Moreover, this stock is expected to gain market share based on economies of scale, which drives higher rebates, better sourcing, IT resources and product availability.

The consensus mark for 2020 earnings is pegged at $5.97 per share, having been revised 6.6% upward in the past 60 days.

Zacks’ Single Best Pick to Double

From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.

Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.

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Pool Corporation (POOL) : Free Stock Analysis Report
 
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
 
Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
 
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
 
American Outdoor Brands Corporation (SWBI) : Free Stock Analysis Report
 
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