Stocks enter the New Year having made an aggressive rally as the market is in the process of adjusting to new President-elect Donald Trump.
And of course, with a new administration comes, investors assume, new policies. The renewed interest in a budding economy and a focus on strengthening our domestic economy makes way for a new wave of stocks that are likely to double in what is beginning to look like it could be a banner year for the market.
So which ones are going to be winners this year?
Well, here are seven stocks that could help you double your money during 2017.
Stocks to Buy: Atwood Oceanics (ATW)
The forecast for energy prices continues to show growth potential, meaning that this beaten-down sector still has room to move higher. What’s good about these stocks is that they are still among the most hated on Wall Street, meaning they are far from a crowded trade.
Atwood Oceanics, Inc. (NYSE:ATW) is coming off of another quarter that showed declining revenue, but it felt like a “kitchen sink” type of quarter as the company not only had their worst quarter of revenue growth but also missed earnings per share estimated by their largest margin. We often like these scenarios as they mean the upside is growing.
Wall Street hates this stock, but that could be changing. Despite the earnings, Atwood Oceanics shares are still 16% higher over the last six months and show an improving technical pattern. Citigroup upgraded the shares this week to a “neutral.” With only 6% of the analysts falling in the buy category, there are a lot more upgrades coming if Atwood Oceanics continues to perform on price.
The improvements in demand for energy means that we may see an improvement in guidance. The company guided higher in January of 2016 and signs are indicating that we could see some positive comments on potential improvement in the sector.
Atwood Oceanics lands on our list of stocks likely to double in 2017 with a price target of $25.
Stocks to Buy: Fifth Third Bancorp (FITB)
Regional banks were hot in the last half of 2016, a trend that should continue into 2017.
Rising interest rates feed the core of regional banks balance sheets, as lending contributes a large part to their margins and profitability. Fifth Third Bancorp (NASDAQ:FITB) is set to benefit from the three interest rate hikes expected by the FOMC during 2017, along with efficiencies in their operations, which help profitability.
Shares of Fifth Third Bancorp are 52% higher than six months ago, but you would never know it by the market’s reactions. First, only 12 percent of Wall Street analysts have the stock ranked a buy. This suggests that the stock is RIPE for upgrades which will drive even more buying.
Second, short sellers continue to bet against these shares as Fifth Third Bancorp short interest ratio is hovering around 5.7. The short interest ratio has been on the rise lately, indicating that the “wall of worry” has been building higher for Fifth Third Bancorp shares. We expect this activity to help the stock move higher throughout 2017.
The chart analysis of Fifth Third Bancorp shows a lot of room to run, as the shares are far from their all-time highs. Long-term perspective on the charts shows a price target in excess of $50 for 2017 as the stock is now benefitting from a rising 20-month moving average that acts as support. The bottom line is that this regional bank has much more room to run higher.
Stocks to Buy: Caterpillar (CAT)
The “rebuilding rally” has helped several industrial companies for good reason. Equipment companies like Caterpillar Inc. (NYSE:CAT) have seen a steady improvement over the last year as the economic signs strengthened. The new administrations’ projected policies are adding a multiple to these expectations, resulting in a positive outlook for Caterpillar and others.
CAT stands out among this group as sentiment towards the stock is decidedly pessimistic. This suggests that the Street will end up chasing it higher as the shares continue their runaway rally. Current analyst recommendations reflect that only 13% of those covering the stock have it ranked a buy. This number will grow as we move through the year and Wall Street adjusts their lowered expectations.
Short sellers are also on the wrong side of the stock with more than ten times the average daily volume tied up in bets against Caterpillar moving higher. While a short covering rally may only be an intermediate-term catalyst, we view this as just one of the bullish catalysts for 2017 to help the stock double.
The charts for CAT stock are getting more bullish, as shares just transitioned into a long-term bullish trend a few months ago. The majority of the stock’s six-month performance has come over roughly the last two months, suggesting that the rally is just getting started.
With long-term technical resistance out of the way, there is a clear path for Caterpillar to hit new all-time highs around $120. By this time, Wall Street should start to capitulate and upgrade the stock, carrying it the rest of the way for a doubler in 2017.
Stocks to Buy: Harley Davidson (HOG)
From CATs to HOGs now (sorry), Harley-Davidson Inc (NYSE:HOG) finds itself in position to double in value in 2017 as consumer discretionary activity begins to improve along with the economy.
Harley Davidson shares have grown more than 500% since they bottomed in 2009, but the stock still has a lot of upside potential as the consumer discretionary sector is beginning to fall back in favor. Shares are still 20% off their 2014 highs, unlike much of the market, but the current rally is beginning to gain technical steam and momentum.
On the fundamental side, revenue and earnings have been fluctuating as the economy has vacillated over the last two years. That said, consumer confidence is now growing along with the prospects for the economy, all of which adds up to a positive backdrop for HOG stock.
The stock remains underappreciated by Wall Street, with only 16% of the analysts covering the stock recommending it as a buy. The rest of the analyst community is waiting for proof that the current rally will hold. The capitulation of these analysts will help drive prices higher as they issue upgrades.
Short interest on Harley Davidson has been on an incredibly strong uptrend over the last two year. This indicates that there are always a group of short sellers trying to call a top on HOG, meaning that there is almost always potential for a short covering rally.
We love it when a stock sees this action.
The pessimistic sentiment suggests that the “wall of worry” for Harley Davidson will continue to grow and help the stock maintain its bullish course towards a price target of $120 in 2017.
Stocks to Buy: Huntington Bancshares (HBAN)
A sign of the strength our models expect from the regional bank sector in 2017 is the fact that Huntington Bancshares Incorporated (NASDAQ:HBAN) is also on the list of stocks we expect to see double in 2017.
Huntington Bancshares are 44% higher over the last six months as the interest rate environment favors regional bank balance sheets. The entire sector continues to see buying interest as professional money managers are adjusting their portfolios to include this group.
As is normal, the Wall Street buying pendulum is slow to swing, as only 44% of the analysts covering shares have it ranked a buy. This number will move higher through 2017, driving prices even higher on the stock.
The chart for Huntington Bancshares just got a nice long-term bullish signal, as shares move above the 50% retracement level from the 2006 highs and 2009 lows. What this means is that the “crowd” is likely to take notice of the technical trend and continue to fuel it with more buying, taking shares back to the 2006 highs during 2017 and completing a 100%-plus move for the year.
Stocks to Buy: Chesapeake Energy (CHK)
Looking for doublers often include looking for volatility. The energy sector is known for this, and our perspective is seeing that Chesapeake Energy Corporation (NYSE:CHK) has the volatility, but also a strong enough trend, to forecast a 100% gain in 2017.
Shares of Chesapeake Energy doubled twice during the first quarter of 2016 as the company showed strength in the energy sector. We’re still seeing the potential for this much-hated stock to continue its course in 2017.
Over the last six month, Chesapeake Energy shares have appreciated by 57% while maintaining a series of new highs and lows along the way. We’ve noted several intermediate- and long-term support trends that help to maintain this powerful rally from a long-term perspective.
Now, for the second month in a row, CHK shares are trading in a new bull market trend that targets a move to $15 by year-end 2017.
Helping this outlook is the fact that 62% of the 21 analysts covering CHK stock have it ranked a hold and 19% a sell. At minimum, we’ll see the 19% shift their opinions along with the investors that follow them. That should be enough to fuel the expected gains in 2017.
Stocks to Buy: FireEye (FEYE)
One of the most-hated technology companies on The Street is FireEye Inc (NASDAQ:FEYE). This company hit the scene in 2013 and was immediately one of the most favored names, with expectations from Wall Street going through the roof. Those high expectations went unmet and Fireye stock suffered the consequences of embarrassing The Street.
Now, we’re seeing an improvement in the fundamental performance of the company that has still gone unnoticed and holds the potential to turn Wall Street’s view on the stock positive again. The last three quarters have seen improvements to the revenue and earnings picture with the last quarter resulting in higher guidance from Fireye’s management for the first time since March of 2016.
The technical picture is ugly, but getting better. FEYE sat has the potential to serve as a launching pad for the stock.
23 analysts cover the stock with 26 percent of them sitting in the buy category. At this point, it will not take much for FEYE stock to start garnering attention and upgrades as the same analysts that were burned when the stock went down will want to make sure they are on the right side of a recovery.
Our models expect to see a price target of $25 achieved on the stock during 2017 as the market begins to see Fireye as an undervalued opportunity.
As of this writing, Chris Johnson did not hold a position in any of the aforementioned securities.