We’re at the midpoint of 2015 and it’s looking like the second half of the year will seem some interesting macro changes.
Today we’re looking at seven stocks to buy — each are in a specific sector that will see growth in coming quarters and are well-positioned to reap a lion’s share of the rewards as those sectors grow. It’s a nice variety of players of different sizes as well, but most fit into the mid-cap range — which means they’re the biggest beneficiaries of an expanding economy.
And that looks to be the case moving forward. U.S. economic numbers continue to surprise to the upside and it looks like the Federal Reserve will raise rates slightly by the end of the year. This helps the market prepare for the transition and move money from less likely growth sectors into the new ones.
An improving economy means growing consumer and corporate spending and a weaker dollar helps international sales. All these are tailwinds for our seven stocks to buy.
7 A-Rated Stocks to Buy for the Rest of 2015: Ambarella (AMBA)
Ambarella (AMBA) has been a tear almost since it went public in 2012. The stock is up almost 1,900% since its IPO, 300% in the past year and 145% year to date.
It is like bottled lightning — and the crazy thing is that its rise has only just begun.
AMBA has caught the tsunami of the online video-cation of literally everything. Now that bandwidth is becoming bigger and more accessible, particularly on mobile devices, videos of everything are popping up everywhere.
AMBA makes semiconductor processors for HD quality video. And its main client is GoPro (GPRO), maker of the small, rugged cameras that have taken the world by storm.
But GoPro is just the beginning. AMBA is a major player in technologies such as self-driving cars and unmanned aerial vehicles, which promise to be huge growth sectors as well.
AMBA is perfectly situated to take advantage of the enormous growth in both the consumer and industrial markets for its pioneering technology. This one has miles to run before it tires.
7 A-Rated Stocks to Buy for the Rest of 2015: Gilead Sciences (GILD)
Gilead Sciences (GILD) is the biggest company in our list.
It’s one of the new generation of pharmaceutical companies. It’s massive and broadly diversified, weighing in with a $177 billion market cap. That’s a bigger market cap than IBM (IBM) or Cisco Systems (CISCO).
GILD’s biggest growth engine has been its Hepatitis C combination of Harvoni and Sovaldi. In the first quarter, Harvoni generated sales of a whopping $3.6 billion worldwide. And in the U.S., it’s essentially the only Hep C prescription sold. GILD is also seeing growing adoption of its HIV pill Stribild around the globe.
For quite a while, GILD has had a lock on the Hep C market but now there are a couple new entrants that may eat into market share. However, the market is still expanding, so even if new drugs take some of the market, it’s still possible that GILD can continue to grow its base.
But it’s not just these drugs that are keeping GILD on a growth path, but the fact that its array of drugs available and in the pipeline is deep and wide. It’s in almost every important strategic sector there is moving forward and certainly has enough money at its disposal to buy companies that look promising and keep it competitive.
7 A-Rated Stocks to Buy for the Rest of 2015: Sucampo Pharmaceuticals (SCMP)
Sucampo Pharmaceuticals (SCMP) is on the other side of the GILD lens.
It weighs in with a market cap of $742 million, the smallest company on our A-list. But that’s not a bad market cap for a company with only one drug on the market. Amitiza is available in most major markets around the world and is used in the treatment of irritable bowel syndrome and other similar maladies.
But the most compelling part of SCMP’s story is the fact that the company was founded by a scientist that discovered prostones, fatty acid metabolites that up until his discovery we not thought to do much in the body.
But Dr. Ryuji Oeno discovered that prostones act locally to restore normal function in cells and tissues. That means researchers can target their uses to specific organs and tissues.
Now, Amitiza shows that these theories are now in real-life medicines.
SCMP is an interesting growth story but it’s also compelling takeover target now that proof of concept has been established for the underlying technology.
7 A-Rated Stocks to Buy for the Rest of 2015: Molina Healthcare (MOH)
There’s no bigger megatrend in place than what’s happening in healthcare. And there’s no sector within the healthcare that is more dynamic now than providers that are helping get America’s uninsured into the system.
And that’s exactly what Molina Healthcare (MOH) does.
MOH operates in about a dozen states and directly delivers healthcare to Medicaid recipients through its facilities. Most of the facilities are primary care offices, but MOH has a hospital in southern California.
The company is continuing to expand, which is likely why its stock is up 50% in the past year. Recently it announced that it purchased some of the assets of HealthPlus of Michigan. That will add 90,000 new Medicaid patients as well as 6,000 MIChild recipients.
Given the fact that MOH is reaching less than a quarter of the U.S. states, there is a lot of need and opportunity waiting.
7 A-Rated Stocks to Buy for the Rest of 2015: Helen of Troy (HELE)
Helen of Troy (HELE) is capitalizing on the rise of the U.S. consumer. As wages and employment rises, it means that Americans have more disposable income available.
Now, that doesn’t mean they’re going to go out and buy a house. It means they will start buying nice, small things that they denied themselves for a while.
HELE develops and markets consumer products worldwide. The company operates out of three main businesses:
- Housewares: Driven by its OXO family of brands, this division houses its food preparation tools, kitchen gadgets and accessories, including tea kettles, bottle openers, food storage containers and cutlery.
- Healthcare/Home Environment: HELE owns the Pur and Vicks brands and they drive this division. Humidifiers, thermometers, blood pressure monitors, air purifiers, heating pads, fans and water filtration units are the big sellers.
- Personal Care: This is HELE’s bread and butter and it runs the Revlon and Brut brands from this division. This is where the growth should continue in coming quarters. It focuses on hair dryers, mirrors, footbaths, body massagers, brushes, styling products, hair and skin care lines, as well as body powders.
In its latest quarter, the company’s sales rose 20.9% to $377.7 million, while earnings surged 311.8% to $40.6 million, or $1.40 per share. This trend is long term.
7 A-Rated Stocks to Buy for the Rest of 2015: Dycom Industries (DY)
Dycom Industries (DY) is the quiet company that makes what AMBA does possible. It helps lay the fiberoptic and copper cables that move the digital economy forward in the U.S. and Canada.
It also works as a contractor to utilities that are laying new lines or growing their distribution area.
Both sectors are economic cornerstones for building globally competitive societies moving forward and the growth is huge. Consider the fact that most of the U.S. electrical grid was around in the time of Thomas Edison, upgrades are no longer optional, but necessary.
And as bandwidth increases demand for Internet-based TV content grows and that trend is just in its infancy. Content companies are currently battling it out for supremacy and it’s tough to see who the clear long-term winners are.
But that’s not the case on infrastructure side. Companies like DY that are not only in the trenches but digging the trenches for the 21st century telecommunications revolution will be big winners. Plus, as the dollar weakens, its Canadian operations will become more valuable its bottom line.
7 A-Rated Stocks to Buy for the Rest of 2015: Taser (TASR)
Nearly every day in the U.S., police are involved in an incident involving a fatality, according to online database that tracks such events.
This isn’t a political statement. It’s a statement of fact. And after several recent high-profile incidents of police officers using questionable levels of force against citizens, there’s no doubt the local, state and federal authorities will be looking into developing more non-lethal methods in training new and existing officers.
Just from a financial standpoint, a lawsuit for a citizen’s death could deal a significant blow to a county or town’s budget.
Taser (TASR) is going to be a part of that new strategy. And its likely that the federal government, as it stops giving tanks and armored personnel carriers to local police forces, will start to subsidize forces that begin to adopt non-lethal confrontation strategies.
TASR also sells body cameras, which are another new law enforcement addition. It’s no wonder the stock is up over 30% year to date and more than 150% in the past year. And this is the beginning of the trend.
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.
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