Yes, Q1 earnings announcements are upon us, and from all accounts, they’re not going to be very inspiring.
But these three picks — Allstate Corp (NYSE:ALL), Vasco Data Security International, Inc. (NASDAQ:VDSI) and Ambarella Inc (NASDAQ:AMBA) — have what it takes to get past this slow patch and put up winning numbers quarter after quarter for many years to come.
Each stock has its own sector, which is to say, these are some of the strongest companies in each of their respective sectors.
ALL, VDSI and AMBA are A-rated in one or more of my portfolios (one is an A-rated holding of three out of four of my portfolios!) and hold unique qualities that make them all a worthy buys for anyone looking for diverse growth opportunities.
Let’s take a closer look at these best stocks to buy for Q2 and beyond.
3 Best Stocks to Buy for Q2: Allstate Corp (NYSE:ALL)
First up is Blue Chip Growth Portfolio denizen, Allstate Corp (NYSE:ALL).
ALL is a property and casualty (P&C) insurer. Allstate insures property and life (life, auto, home in essence) from loss due to theft, weather or other of life’s realities.
Basically, ALL collects premiums from policyholders and then pays off claims. In the meantime, Allstate sits on huge piles of cash.
So, instead of sitting on the cash, ALL puts that money to work in the markets. So, markets where you can buy blue-chip stocks and grab big returns — like the past eight years — is a nice thing indeed. Also, a stable corporate bond market does insurance portfolios good as well.
Rising rates mean its bond holdings will grow in value. A solid stock market means it doesn’t have to reach too far out on the risk branch to get the kind of growth and yields that will keep the coffers expanding.
Also, since it doesn’t have to pay until a loss actually occurs, as long as there are no massively destructive hurricanes or tornadoes or earthquakes, Allstate is well positioned to see its return on equity grow.
ALL stock is up almost 27% in the past year, and Allstate even kicks off a small 1.68% dividend. This is a great market to be a quality insurance player, and ALL is taking full advantage.
3 Best Stocks to Buy for Q2: Vasco Data Security International, Inc. (NASDAQ:VDSI)
Vasco Data Security International, Inc. (NASDAQ:VDSI) is an A-rated favorite, and growth is precisely what this cybersecurity stock is about. VDSI is up almost 200% in the past year.
The most troubling news: Vasco has a growing amount of short interest, which means a growing number of investors are expecting the price to go down further before it goes up.
Given that half of the shares are institutionally owned, there’s likely a fair amount of big money hedging Vasco’s gains by putting shorts on the stock in case VDSI misses its numbers.
On the other hand, Vasco is still up nearly 200% in the past year. Plus, the thing about short interest is, if VDSI reports solid Q1 earnings April 28, the shorts will have to cover at higher prices; what’s called a short squeeze. That leverages the upside for VDSI.
Vasco’s key sectors are banking and financial services, which is a good place to be, and VDSI clients tend to be big players in smaller countries. That’s a great niche when competing with bigger firms that don’t focus on those clients and smaller competitors that don’t have the experience or reputation to compete.
VDSI is going to be volatile here. So, if you buy in, be ready for a ride.
3 Best Stocks to Buy for Q2: Ambarella Inc (NASDAQ:AMBA)
Ambarella Inc (NASDAQ:AMBA) is the A-rated triple threat of the bunch. AMBA is in my Emerging Growth, Ultimate Growth and Platinum Growth Portfolios.
Why?
Because Ambarella is the technology behind one of the biggest crazes in the digital world today — personal video.
AMBA makes the semiconductors that make the GoPro Inc (NASDAQ:GPRO) cameras go.
If you’re unfamiliar with the GoPro camera, just check out virtually any video on YouTube or a jungle adventure on National Geographic Channel or a story in wartorn Yemen by a 60 Minutes journalist. Everyone is buying these relatively inexpensive, incredibly powerful digital cameras.
AMBA stock is up almost 1100% since its initial public offering in late 2012, and Ambarella is up 175% in the past year. It’s crazy to think that there’s still upside left but the potential for AMBA’s low-power, HD quality video chip is still barely seen the light of day.
AMBA is still in its infancy and is a very exciting story and company.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
