Top 6 stocks to buy falling despite market fluctuations

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Volatility returned to US stock markets in early September, the historically worst-performing month on Wall Street. The three major stock indices – the Dow, the S&P 500 and the Nasdaq Composite – have fallen in the past four trading days. According to the CFRA, the S&P 500 has finished in positive territory only 45% of the time in September since World War II.

Still, the fundamentals of the US economy remain strong and the $ 1.2 billion infrastructure plan proposed by the Biden administration will boost stock markets. At this point there are a handful of stocks available with a Zacks # 1 (strong buy) or 2 (buy) ranking that have peaked at 52 weeks in the past four months but are currently trading above 20%. of discount. Investing in these stocks is likely to be successful in the future.

September begins with volatility

The market’s benchmark – the S&P 500 Index – ended the first eight months of 2021 with its strongest gain since the start of the year since 1997. The index also finished in the positive zone for seven months. in a row, marking the longest stretch since the 10 month-long rally that ended in December 2017. Additionally, in the first eight months of this year, the tech-rich Nasdaq Composite has only finished in red than in May. The leading Dow index fell in January and edged down in June.

Despite the good performance of the first eight months of 2021, September started with several concerns from market players. The rapid spread of the highly infectious Delta variant of the coronavirus has raised serious concerns about a possible decline in US economic growth.

On September 8, the Fed published its beige book in which it was stated that from early July to August, economic growth in the United States “slowed slightly to a moderate pace.” The reasons were the resurgence of the coronavirus, persistent supply chain disruptions and a shortage of manpower.

A recently released series of weak economic data has also shaken investor confidence. Non-farm wages in August were very disappointing. The Consumer Confidence and Sentiment Index fell significantly last month. Industry and services PMIs fell in August. Inflation rates have remained at their highest level in 30 years.

U.S. equity markets are expected to remain gloomy as market participants await the Fed’s decision to cut the bond buying program by $ 120 billion per month at the next FOMC meeting on 21 and September 22.

Our top picks

We have narrowed down our search to six stocks that are currently trading lower. These stocks have strong growth potential for the remainder of 2021 and have seen strong earnings estimate revisions over the past 60 days. Each of our choices carries either a Zacks Rank # 1 (strong buy) or 2 (buy). You can see The full list of today’s Zacks # 1 Rank stocks here.

The graph below shows the price performance of our six picks since the start of the year.

Image source: Zacks Investment Research

of the year inc. ROKU is the leading TV streaming platform provider in the United States on the basis of times broadcast. The company operates in two segments, Platform and Player.

Roku generates revenue through subscriptions and advertising, the latter of which offers the potential for long-term, sustainable growth. Its acquisition of the demand-side platform, Dataxu, will position the streaming service provider to compete more fiercely for ad dollars as it shifts from the $ 70 billion linear TV market to the digital platform.

The company has an expected profit growth rate of over 100% for the current year. Zacks’ consensus estimate for current year earnings has improved 20.2% over the past 30 days. This Zacks Rank # 1 stock is currently trading at a 31% discount from its 52 week high reached on July 27.

HP Inc. HPQ is benefiting from strong demand for personal computers amid the wave of remote working and e-learning caused by the pandemic. Recently published earnings reflect a strong rebound in the Printing business. In addition, strict cost control measures should generate long-term margins.

The company has an expected earnings growth rate of 63.6% for the current year (ending October 2021). Zacks’ consensus estimate for current year earnings has improved 6.6% in the past 30 days. This Zacks Rank # 1 stock is currently trading at a 21.6% discount from its 52 week high reached on May 10.

Schlumberger SA SLB provides the technology for the characterization, drilling, production and processing of reservoirs to the oil and gas industry around the world. It operates in four divisions: Digital & Integration, Reservoir Performance, Well Construction and Production Systems.

Schlumberger is the largest player in petroleum services, with a presence in all energy markets around the world. As the leading supplier of technology for complex oil fields, it is best positioned to undertake new offshore projects in international markets. The company is targeting zero net greenhouse gas emissions by 2050.

The company has an expected earnings growth rate of 83.8% for the current year. Zacks’ consensus estimate for current year earnings has improved 10.6% in the past 60 days. This Zacks Rank # 2 stock is currently trading at a 27.8% discount from its 52 week high reached on June 4.

The gap inc. GPS operates like a clothing retail business. It has benefited from the continued strength of the Old Navy and Athleta brands, improved marketing efforts, better brand management and advanced technology. He also reported strong growth in key metrics on a two-year basis, reflecting robust growth from pre-pandemic levels.

Sales benefited from the strength of its Old Navy and Athleta brands as well as a strong online lounge. This, combined with improved margins, contributed to the bottom line. Gap has raised its point of view for the 2021 fiscal year. Gap remains on track with its 2023 Power Plan.

The company has an expected profit growth rate of over 100% for the current year (ending January 2022). Zacks’ consensus estimate for current year earnings has improved 24.2% in the past 30 days. This Zacks Rank # 1 stock is currently trading at a discount of 34.6% from its 52-week high reached on May 18.

Harley-Davidson Inc. HOG manufactures and sells custom, cruiser and touring motorcycles. It operates in two segments, motorcycles and related products and financial services. In line with its long-term growth objectives to optimize its product portfolio and expand its customer base, Harley-Davidson is focusing on motorcycle models and technologies that better match market trends.

Its recovery plan, dubbed “Rewire”, and the five-year strategic plan “Hardwire” reinforce optimism. Harley-Davidson’s plan to invest in the base segments of the Touring and heavy-duty Cruiser unit, as well as expanding the untapped segment of adventure touring, bodes well. The company’s decision to evolve its original LiveWire motorcycle into a brand dedicated to electric vehicles should strengthen business prospects.

The company has an expected profit growth rate of over 100% for the current year. Zacks’ consensus estimate for current year earnings has improved 17.9% in the past 60 days. This Zacks Rank # 2 stock is currently trading at a 28.7% discount from its 52 week high reached on May 18th.

Wendy’s Company. WEN operates like a fast food restaurant. It operates through three segments: Wendy’s US, Wendy’s International and Global Real Estate & Development.

The company benefits from menu innovation, technology upgrades and international expansion. This, along with the emphasis on breakfast offerings, is likely to stimulate growth. Going forward, he remains bullish on this business model with plans to increase breakfast sales by 30% in 2021.

The company has an expected profit growth rate of 42.1% for the current year. Zacks’ consensus estimate for current year earnings has improved 9.5% in the past 30 days. This Zacks Rank # 2 stock is currently trading at a 23.6% discount from its 52 week high reached on June 8.

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