The new year is finally upon us, and I am expecting great things in 2014.
For one, fourth-quarter earnings should be strong for our “best of the best” stocks as companies begin reporting during the next six weeks or so.
Meanwhile, consumer spending has been pretty strong this holiday season, even if online continues to take business away for brick-and-mortar retailers. The jobs situation is improving somewhat, as seen by Thursday’s report showing lowered jobless claims again. U.S. manufacturing activity was strong in December, and the recent Case-Shiller report shows a continued rebound in housing.
All of this should add up to a strong economic backdrop that can lead to higher stock prices in 2014.
However, as I have pointed out previously, the big money is becoming more selective, and investors need to focus on stocks with the very best fundamentals to prosper in 2014.
Here are three under-the-radar “best of the best” stocks to buy that get a “Triple-A” from Portfolio Grader and should power your portfolio in 2014.
Huntington Ingalls (HII)
Huntington Ingalls (HII) builds and repairs ships, primarily for the U.S. Navy and the Coast Guard. Ingalls builds the giant nuclear aircraft carriers, nuclear submarines, cutters and every type of warship in between. HII also offers refueling and overhaul services for nuclear vessels.
Defense cutbacks have not been a problem for HII stock; shares more than doubled in 2013 thanks to earnings that have blown away the analyst estimates for four quarters in a row and will easily best last year’s tally once Q4 is reported. Analysts have been raising their estimates for Huntington and are expecting another big year for the company in 2014.
Portfolio Grader has noted the strong fundamentals and upgraded HII stock to an “A” last month, making it a strong buy consideration at current prices.
Aceto (ACET) sources and sells the ingredients for pharmaceutical products. ACET operates in three divisions:
- Human Health Division: Provides the raw material used in nutritional and packaged dietary supplements, including vitamins, amino acids, iron compounds, and bio chemicals used in pharmaceutical and nutritional preparations.
- Performance Chemicals: Provides chemicals that are used in textiles, plastics and energy industries among others.
- Pharmaceutical Ingredients: Sells active pharmaceutical ingredients and pharmaceutical intermediates to various generic drug companies.
Business is picking up for Aceto, and the company just posted a triple-digit earnings surprise, plus analysts have been raising their estimates for this year.
Portfolio Grader raised ACET stock to an “A” ranking in November, and the stock remains a strong buy at the current price.
Broadridge Financial Services (BR)
Broadridge Financial Services (BR) helps the financial services industry communicate with clients and investors, as well as meet their increasingly complex compliance needs.
BR’s customers include a broad cross-section of the financial services industry, including retail and institutional brokerage firms, global banks, mutual funds, annuity companies, institutional investors, specialty trading firms, clearing firms, independent broker-dealers, clearing firms, and corporate issuers.
As the markets have prospered and compliance issues are becoming more complex, BR stock is prospering thanks to earnings growth of more than 70% in 2013. Analysts have continuously underestimated the company, and Broadridge has posted three consecutive positive earnings surprises.
Portfolio Grader upgraded Broadridge several times in 2013, most recently in November when it raised BR stock to an “A.” The shares remain a strong buy at the current price.