Two of the top five stocks for February are returning veterans from January and other months, but I’ve added some new stocks as well. Let’s get started:
Alexion (NASDAQ:ALXN) remains the No. 1 stock on my buy list. This stock has been surging higher in recent weeks, and shares responded very positively to the news that the company is expanding its product portfolio through its $1 billion bid for Enobia Pharma, a developer of therapies for serious genetic bone disorders. The company currently is working to get its hypophosphatasia treatment, asfotase alfa, approved in the United States. To date, there is no approved treatment for this life-threatening disease. So, if approved, the company would have a tremendous first-mover advantage. Alexion, who will acquire full worldwide development and commercial rights to asfotase alfa, is confident the drug can obtain approval. Analysts currently expect Alexion to grow sales by 41.4% and earnings by 30.8% in the fourth quarter. ALXN reports Thursday, Feb. 9.
AutoZone (NYSE:AZO) has taken off on its next leg higher because it is the perfect stock for the current automobile market. Although consumers are buying new cars when necessary, they also are extending the lives of those vehicles and getting as much mileage as they can for their buck. And companies like AutoZone do this superbly by supplying the parts to keep well-worn cars in top condition. Looking forward to the company’s next quarterly earnings report, expected in late February, analysts currently estimate AutoZone will announce 7% growth in sales and 19.8% growth in earnings. The stock should be a solid performer in the coming weeks. AZO is a strong buy.
Dollar Tree (NASDAQ:DLTR) knows one of the best ways of coping with thinning wallets is to stretch each and every dollar. So, while lean times hit other retailers particularly hard, Dollar Tree stores flourished. The company is the largest and most successful single-price-point retailer in the U.S. — everything in its 4,000 locations is just $1. The company has continued its success even as the U.S. economy improves, and I don’t believe the desire of consumers to save money will be disappearing anytime in 2012. In fact, analysts currently expect the company to report 11.5% sales growth and 22.5% earnings growth in its Feb. 22 earnings announcement.
McDonald’s (NYSE:MCD) is the world’s No. 1 fast-food company and a solid winner for this buy list. Analysts expected the company to report 9.1% sales growth and 11.2% earnings growth this week. McDonald’s answered back by beating earnings expectations for 14th time in the past 16 quarters. Although this did not push the stock higher, I still believe the positive earnings report will be a catalyst for further gains. McDonald’s plans to invest in store expansions around the globe in 2012, with two-thirds of its new stores to be located in Asia.
Ross Stores (NASDAQ:ROST) is the nation’s largest off-price apparel and home fashion retailer and continues to benefit from value-focused customers. The stock has been a solid performer so far in the new year. In December, ROST reported that its same-store sales jumped 9.2%, over double the 4% estimate! I’m looking forward to the company’s Q4 earnings announcement and finding out how these exceptional sales affected the company’s earnings. Analysts are currently expect the company to report 10.9% sales growth and 20.3% earnings growth, and a solid surprise could be just the ticket to the stock’s next leg higher.
If you’re curious to see what other advisers have as their top picks for February, I suggest starting with Richard Young’s analysis.