3 Unbeatable Stocks To Sweeten Your Portfolio In 2H15

Entering the second half of 2015, volatility may prove to be a major roadblock for investors, with several disconcerting events on the radar.

As has been from the start of 2015, the Greek debt crisis will perhaps continue to affect investor sentiment. After defaulting on International Monetary Fund (IMF) repayments despite some frantic propositions to its creditors, Greece refused to agree to the bailout terms with Euro-area finance ministers based on the referendum held on Jul 5.

Moreover, China’s equity bubble remains a cause of concern as a fallout now may have a contagion effect on other economies. Further, the bull run has been fueled by a substantial number of retail investors as well as record margin debt levels of close to $370 billion.

However, conjectures regarding the Fed rate hike may finally come to an end with at least one hike expected in the second half of the year. Meanwhile, though the U.S. bull market has entered its seventh year, it is certainly well-past its average. With fear of the Fed rate hike looming large, questions are bound to crop up about the longevity of the domestic bull run.

The Silver Lining

Nevertheless, going ahead, the U.S. economy provides some respite amid the potentially alarming global backdrop.

Stepped-up economic activities, rising business and consumer confidence, an improving job market, recovering housing fundamentals and an accommodative monetary policy stance indicate a steady turnaround in the U.S. economy. Adding to the positives, labor market conditions have started showing vigor and GDP numbers are widely estimated to better hereafter. Moreover, expectations of a booming retail sector in 2H15 drive further optimism.

Also, in its Apr 2015 World Economic Outlook, the IMF projected a growth rate of 3.1% for the U.S. economy in 2015. With clouds of uncertainty still hovering over the global economy, we expect such modest growth projection within the domestic space to strike the right chord among investors. Further, Fed officials are of the opinion that the recovering U.S. economy looks strong enough to withstand one or two rate hikes this year.

The Winning Stratagem

In the face of such odds, investors should be very careful about their investing strategy.

With the U.S. economy picking up steam, investing in stocks that hold excellent prospects, are well-positioned for future earnings growth and are witnessing a surge of momentum could actually turn out to be a profitable bet.

However, though momentum investing works well in a volatile market, most investors look for some sort of protection to guard their portfolio against a possible stock market correction or downfall.

So, what if, along with serious growth potential and excellent momentum, we could also provide investors with the security of long-term value in the form of low P/Es, generally high returns and solid outlooks?

3 Unbeatable Picks

With the help of our new style score system, we have identified three stocks that look great from the Growth, Momentum and the Value standpoint as well.

Our Growth Style Score condenses the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. The Momentum component provides the temperature gauge that indicates when to enter or exit the market. Meanwhile, the Value component condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount.

Back-tested results show that stocks with Style Scores of ‘A’ or ‘B,’ when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) handily outperform other stocks.

These three picks flaunt a solid Zacks Rank coupled with impressive Growth, Momentum and Value Style Scores of ‘A’.

Isle of Capri Casinos, Inc. (ISLE - Snapshot Report)

The company is a developer, owner and operator of branded gaming and related lodging and entertainment facilities in the U.S.

Isle of Capri Casinos currently carries a Zacks Rank #1 and has added value in excess of 21% over the last four weeks. The company possesses a P/E of 16.89x and P/S of 0.74x, a massive discount of almost 19% and 34% over the industry average of 20.88x and 1.12x, respectively.

This gaming company also has a projected EPS growth rate of almost 44%, crushing the industry average of just 2.1% in comparison. Notably, the stock also has a Return on Equity (ROE) of 146.8% – a massive premium over the industry ROE of 11.6%. Further, the stock has seen its current year estimates surge 53.5% over the last 60 days to $1.09.

Green Dot Corporation (GDOT - Snapshot Report)

The company is the largest provider of prepaid debit card products and prepaid card reloading services in the U.S., as well as a leader in mobile banking with its GoBank mobile bank account offering.

This Zacks Rank #2 stock has rallied more than 25% over the last four weeks and can be an intriguing choice for investors right now. It also possesses a P/E of 15.73x, a significant discount of 26.6% over the industry average of 21.42x.

Moreover, the stock has a projected EPS growth rate of almost 26%, crushing the industry average which calls for EPS growth of just about 13% in comparison. Moreover, full year 2015 revenue growth is estimated at almost 21%. Further, the stock has seen its current year estimates rise more than 6% over the last 60 days to $1.21.

HCA Holdings, Inc. (HCA - Snapshot Report)

The company provides health care and related services in the U.S. This Zacks Rank #2 stock has gained approximately 12% over the last one month. Further, with a P/E of 17.17x and P/S of 0.98x, the company is trading at a discount of almost 21% and 42% over the industry average of 21.73x and 1.69x, respectively.

A 3% upward revision in current year estimates over the last 60 days to $5.27 per share coupled with expected full year 2015 EPS and revenue growth of 12.1% and 4.3%, respectively, further add to the optimism.

The Triple Bonanza

So sit back and enjoy the market’s rollercoaster ride, while keeping your fingers crossed for a profitable second half! Amid all the qualms, these prominent stock picks should potentially spell magical returns for your portfolio and simultaneously, help tide the volatility crisis on the back of their strong momentum, imbibed value and solid future growth projections.

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