We’re in a stock picker’s market these days.
Stock picking is crucial here. For example, buying tech stocks is a dicey game because the U.S. dollar is so strong that any sales outside the U.S. are going to be hurt when that revenue is converted back into dollars.
The best approach at this point is to be choosy, looking to companies that will do well in a slow-growth climate, are domestically focused and are committed to their market.
I have found seven A-rated stocks for the second quarter that will continue to grow well into 2016. Some throw off a bit of dividend and others don’t. But they are all focused and ready for what’s coming.
A-Rated Stocks to Buy: KLA-Tencor Corp (KLAC)
KLA Tencor (KLAC) is a company that builds testing and measuring equipment for the semiconductor industry, as well as the LED and data storage sectors.
This certainly isn’t sexy, but it’s essential. Which is why KLAC has been around since 1997, working will all the industry leaders and establishing a strong industry foothold from the days before the dotcom boom. Its roots go back to the mid-’70s when KLA and Tencor were launched.
That means KLAC has a strong foundation and has stood the test of time in a highly dynamic and competitive industry.
Its new moves into LED and data storage reflect its ability to see ahead and steer to that course.
The stock is up nearly 50% in the past six months, while still offering a nearly 3% dividend yield. There’ plenty of gas left in this stock’s tank.
A-Rated Stocks to Buy: Nippon Telegraph & Telephone Corp (ADR) (NTT)
Nippon Telephone and Telegraph (NTT) is Japan’s largest mobile phone carrier. And in case you forgot, Japan boasts the third-largest national economy in the world.
We don’t hear too much about Japan in the news because China is now the big Asian country the talking heads smack their gums about, and it seems they can’t manage to keep two competing ideas in their heads, or at least present them to their audiences.
So much the better for us. It means we can buy in without having to worry about prices getting bid up as the herd comes in.
For years, most of Asia analysis has been China focused, first on its growth, then on its lack of growth. But Japan has been chugging along and many Japanese companies are expanding beyond their national borders. Japanese firms own major U.S. whiskey brands as well as big insurers.
But it has all flew under the radar. For example, did you know this major telecom is up 40%-plus in the past year? Can you imagine if a major U.S. carrier had those kind of returns? There would be a stampede into the stock.
A-Rated Stocks to Buy: AMN Healthcare Services, Inc. (AHS)
AMN Healthcare Services (AHS) is the beneficiary of one ineluctable trend: the growing and shifting demand for healthcare services in the U.S.
AHS provides staffing, recruitment and management services for healthcare companies and their facilities.
Starting in San Diego 30 years ago, AHS has become a national force as it has been steadily acquiring local and regional players along the way.
Now that the Affordable Care Act is law, big healthcare corporations and hospitals and private practices have to adjust their practices to maximize productivity. AHS allows them to do that by increasing their flexibility in hiring.
AHS’ released its latest earning in mid-February, illustrating why this stock is so attractive: Even in this sluggish economy, AHS posted a 44% earnings increase from the same quarter a year ago. Gross profit was up 56% and it blew the doors off of Wall Street’s revenue expectations.
A-Rated Stocks to Buy: Natural Health Trends Corp. (NHTC)
National Health Trends (NHTC) sells skincare, beauty and lifestyle products both directly to consumers through e-commerce and through suppliers. It has operations in the U.S., China, Hong Kong, Japan, South Korea, Taiwan and some parts of Europe.
Part of the allure has been its foothold in Asia, where NHTC products are growing in demand thanks to the expanding middle class. These once small luxuries are now becoming the norm for many women in China, in particular. Buying higher quality products is also part of this trend.
While China may be sluggish, Japan and South Korea are doing well, so NHTC doesn’t live or die by mainland China.
Even after a big selloff in January, the stock is up 75% for the past 12 months. The selloff has given it lots of headroom moving into 2016.
A-Rated Stocks to Buy: Korea Electric Power Corporation (ADR) (KEP)
Korea Electric Power (KEP) is the power utility for South Korea, one of the main economic growth engines in Asia.
While it is closely linked to the fate of its massive neighbor, China, South Korea is on a growth track from last year. It’s expecting to see 3.1% GDP growth in 2016 vs. 2.6% in 2015. That’s a good sign.
Also in 2015, there was an outbreak of the Middle East Respiratory System virus, which kept people at home, afraid to venture out and risk infection.
MERS is now behind the economy and there’s a good chance the Korean central bank will lower interest rates this year to stimulate the economy. That’s good for business and consumers. And that’s good for KEP.
A-Rated Stocks to Buy: Smith & Wesson Holding Corp (SWHC)
Smith & Wesson (SWHC) is one of the leading handgun and firearms manufacturers in the U.S.
One thing is certain, when politicians start talking about tightening gun control laws, gun sales go through the roof.
And now that we’re in the final stretch of the presidential election cycle (aka, the silly season), the gun control rhetoric is flying. It’s no wonder SWHC rallied 17% just in February. It also helped that the company reported strong earnings for the quarter.
The stock has come off its recent highs, but that’s to be expected — SWHC has risen more than 100% in the past 12 months. This small pullback is a good chance to get in before the next leg up.
A-Rated Stocks to Buy: Huttig Building Products Inc (HBP)
Huttig Building Products (HBP) celebrates it 150th year in business this year.
What started as a small door and sash company out of St. Louis has become a national manufacturer and distributor of doors, millwork, building materials and wood products.
It has 27 distribution centers that serve commercial homebuilders and contractors in 41 states.
HBP only sports a $93 million market cap, but it certainly makes up in experience what it lacks in size. When you have been able to maintain a successful company in a highly competitive and volatile industry for 150 years, you’re doing a lot of things right.
HBP is up almost 30% in the past 12 months, and as the U.S. economy improves, so will HBP’s prospects.
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.