It may be difficult to tell by looking out your window but spring is upon us already. It is only a few days until baseball season begins and we start the inevitable march toward summer.
Now that the bad weather should finally be behind us, investors can go back to focusing in fundamentals when thinking about stocks to buy instead of worrying about the effect of bad weather on the economy and corporate earnings. While that is great news for stocks with great fundamentals, it’s probably not a good thing for those that have rallied in spite of poor fundamentals.
The markets’ advance is going to continue to thin out, and it’s more important than ever to pick only the best stocks to buy.
Today I want to show you two powerful stocks to buy right now … and three with good fundamentals that are not yet seeing strong buying pressure that you should keep an eye on in Portfolio Grader so you can get in as soon as they are upgraded.
Spirit Airlines (SAVE) provides air travel from smaller cities and towns around the country to hot tourist destinations in places like sunny Florida and the Caribbean. Spirit offers the lowest-priced tickets and charge for other services on an a-la-carte basis.
Consumers seem to like the approach, as earnings have exploded this year. In the most recent quarter profits were up more than 100%.
The strong performance should continue as travelers take to the air for summer vacations. The stock was upgraded to an “A” by Portfolio Grader back in September and the stock is a “strong buy” at the current price.
Federated National Holdings (FNHC) is in a pretty basic business — it sells basic insurance products (including homeowners and auto insurance) as well as commercial polices for a wide range of needs.
While it may not sound like the most exciting business in the world, the results have been spectacular in the past year. Earnings are up more than 160% in the past year and more than 200% in the latest quarter.
The stock has been rated “A” by Portfolio Grader since last May — and as the fundamentals have continued to shine, the stock remains a “strong buy” at the current price.
Archer Daniels Midland (ADM) is a stock I want you to keep an eye on as we head into summer. This company procures, transports, stores, processes, and merchandises agricultural commodities and products. It’s one of the largest agricultural companies in the world, with locations in 140 countries around the globe.
Business has been pretty good for the company as earnings are up over 90% in the past year. In fact, ADM’s fundamentals earn a grade of “B” — but the quantitative grade is lagging as institutions avoid anything commodity-related right now. That situation will change if the company continues to deliver solid revenue and earnings gains.
Watch for the stock to be upgraded from a “hold” to a “buy” and jump in when it happens. Wait for the upgrade!
Uhaul (UHAL) was downgraded to a “hold” recently, but that could change as the better weather finally gets here. Spring and summer are moving time and the kids will be coming home from college, so business should pick right back up for the company.
Icy roads and snow storms have slowed the company down a bit, but the stock could see Wall Street analyst upgrades in the next few weeks.
Do not buy it unless we actually get an upgrade, but keep an eye on UHAL — this one could turn into a powerful stock over the summer.
I also want to you to keep an eye on Lancaster Colony (LANC). The company makes food products — everything from salad dressing to frozen noodles. Lancaster sold its candle-making division back in January for $28 million to focus on the core food products business.
The company posted its first positive earnings surprise in a year last quarter, and the renewed focus on management could lead to more such surprises in the future. The company also just raised its dividend for the 51st year in a row!
The stock was upgraded to a “hold” by Portfolio Grader in January and future upgrades would seem likely. Wait for the stock to be upgraded to a buy in Portfolio Grader and be a buyer of this potentially powerful stock when it happens.