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Wall Street Bull Run Continues in 2019: 5 Top Growth Picks

Nalak Das

Wall Street has been on a bull run since the beginning of 2019. After rebounding in January, U.S. stock markets consolidated in February. The bull-run can be attributed to positive developments on the trade war front, temporary deal between the Republicans and Democrats to avert government shutdown again and the Fed’s dovish monetary stance.

Consequently, it will be a prudent move to invest in stocks with a favorable Zacks Rank and strong growth potential.

Wall Street Bull Run Continues

After tumultuous 2018, Wall Street has been recovering in 2019. Year to date, the three major stock indexes – the Dow, S&P 500 and Nasdaq Composite – are up 11%, 10.9% and 12.8%, respectively. Notably, both the Dow and Nasdaq Composite finished in the green in the preceding eight weeks.  Meanwhile, the S&P 500 ended in the green in seven of the last eight weeks.

On Feb 12, the S&P 500 finished above its 200-days moving average for the first time since Dec 4, 2018. This was a key technical barrier indicating upside potential of the benchmark index in the near term. On Feb 15, Nasdaq Composite exited its longest bear market by one measure since 1991. This represents a significant turnaround of the tech-heavy index from its collapse in the fourth quarter of 2018.

Positive Development on Trade War Front

The latest round of trade negotiations between the United States and China ended on Feb 15. However, a fresh round of talks is slated to begin on Feb 21 in Washington. Negotiators from both countries remained undecided on a few key issues.

Meanwhile, on Feb 19, President Donald Trump said that he would consider extending the deadline of the current trade truce period which will come to an end on Mar 1. The decision comes as a result of smooth progress on the negotiation front.

Temporary Deal Helps Avert Government Shutdown

On Feb 12, Republican as well Democrat Congressional leaders reached a joint agreement to allow $1.4 billion funding for fencing 55 miles along the United States - Mexico border. The move prevented another government shutdown. The amount was way less than $5.7 billion demanded by President Trump for the construction of a 215-mile-long concrete fence across the border.

Although President Trump declared a national emergency ton account of his demands, he also said “I don’t think you’re going to see a shutdown.”  Moreover, 16 states have filed a federal lawsuit on Feb 18, against national emergency.

Fed to Remain Patient Regarding Monetary Policy

On Jan 30, the Federal Reserve decided to keep the federal funds target rate unchanged in the range of 2.25 - 2.50%. Fed Chairman Jerome Powell stated that the central bank will be patient while taking a call on future rate hike.

Instead of following a predetermined path, Fed will consider all economic parameters and market conditions carefully before reaching a decision. The central bank’s bond portfolio reduction strategy will also consider macro-economic metrics and trade related disruptions, and is not on “autopilot”, as suggested by the Fed Chair in December.

Our Top Picks

At this stage, investment in stocks with strong growth potential will be lucrative. Our selection is backed by a good Growth Score and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Our research shows that stocks with a Growth Style Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best opportunities in the Growth-investing space. We have handpicked five such stocks with a Zacks Rank #1 and Growth Style Score of A.

The chart below shows price performance of our five picks in the last three months.

Boot Barn Holdings Inc. BOOT is a lifestyle retail chain, operates specialty retail stores in the United States. The company has expected earnings growth of 90% for current year. The Zacks Consensus Estimate for the current year has improved by 3.1% over the last 30 days.

Telenav Inc. TNAV provides connected car and location-based platform services in the United States and internationally. The company has expected earnings growth of 75.8% for current year. The Zacks Consensus Estimate for the current year has improved by 10.4% over the last 30 days.

Commvault Systems Inc. CVLT provides data protection and information management software applications and related services in the United States and internationally. The company has expected earnings growth of 75.7% for current year. The Zacks Consensus Estimate for the current year has improved by 9% over the last 30 days.

Radiant Logistics Inc. RLGT operates as a third-party logistics and multi-modal transportation services company primarily in the United States and Canada. The company has expected earnings growth of 62.1% for current year. The Zacks Consensus Estimate for the current year has improved by 6.8% over the last 30 days.

Plantronics Inc. PLT designs, manufactures, and markets lightweight communications headsets, telephone headset systems, other communication endpoints, and accessories for the business and consumer markets under the Plantronics brand worldwide. The company has expected earnings growth of 34.1% for current year. The Zacks Consensus Estimate for the current year has improved by 78.3% over the last 30 days.

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%.

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