As we begin the second quarter, it’s a good idea to see where we are so we can determine where we’re going and which stocks to buy. Before the close on the last day of Q1, it breaks down like this:
While the Nasdaq 100 is clearly outperforming its larger brethren, and many of the stocks in the index are tech related, it’s not all that’s in there. Using the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ), only 52% of the index is made up of tech. Granted, tech and biotech make up the top 10 holdings, but 24% of the index is consumer services companies and 14% are healthcare stocks.
We can expect in the next quarter and beyond a bit more friction between the White House and Congressional Republicans. President Trump has already declared war against the Freedom Caucus (aka Tea Party) and has even offered to reach across the aisle to Democrats to get things done. None of this sits well with Speaker Paul Ryan or his conservatives.
This next quarter is about making money without worrying about Washington or Wall Street, and the following seven “best of the best” stocks for the second quarter are great choices.
Stocks to Buy for Q2: NutriSystem (NTRI)
NutriSystem Inc. (NASDAQ:NTRI) is the largest weight management service in the U.S. Its unique approach seems to be why it has left its competitors in the dust over the past 12 months. NTRI has just hit a 52-week high and has returned more than 165% in that time. Just in the past quarter, NutriSystem shares are up 60%.
This is certainly the time of year for people to be weight conscious. In the first quarter, you start with all the New Year’s Resolutions to lose weight, eat healthier, etc. Then after that fades, you start thinking about getting your body “beach ready.” All this is the first two quarters of the year.
But what makes NTRI unique is, it doesn’t make you count your carbs or your food cards. It sells you four-week supplies of meals that are ready to eat. And considering the buy lifestyles of most Americans, between work and kids, this offers a convenient option that is proving increasingly popular.
Stocks to Buy for Q2: Dorchester Minerals (DMLP)
Dorchester Minerals LP (NASDAQ:DMLP) is a holding company that essentially leases out land for exploration and production of oil and natural gas reserves. As a limited partnership, investors are essentially direct owners of the company, which means DMLP pays out its profits to you in the form of a quarterly dividend. Right now, it is yielding a very respectable 5.3%.
And the good thing is, DMLP is up 50%-plus in the past year, so that dividend is pretty secure at current levels. Another plus is the U.S. energy patch is undergoing significant expansion once again and DMLP holds land in 30 different states, so it’s sure to see its business grow as the industry gets back to business again.
Some of its properties are in the Bakken Shale, which is one of the most productive and desired patches of land in the U.S. As more people get back to drilling, prices of the land will continue to rise, meaning higher profits for DMLP and its owners.
Stocks to Buy for Q2: Eagle Pharma (EGRX)
Eagle Pharmaceuticals Inc (NASDAQ:EGRX) is a specialty pharmaceutical company that focuses on injectable drugs for critical care, orphan diseases and oncology. Basically this means EGRX doesn’t necessarily make drugs, but reformulates current intravenous drugs for more efficiency and efficacy and converts other delivery media into injectable formulas.
According to the company, the brands it currently carries have a potential $3.4 billion U.S. market. And that market is expected to grow 16% annually for years to come. Considering EGRX has a $1.3 billion market cap there’s still plenty of growth left in the tank. Another reason EGRX stock looks so good here is that even after a 104% run in the past 12 months, EGRX still has a price-earnings ratio of only 16. In comparison, the speciality pharma industry at large sports a gaudy 25.7 ratio.
Regardless of what happens with healthcare legislation, EGRX is a niche player with a wide moat. It’s a great stock on its own and could also be a very attractive acquisition as the healthcare policy in the U.S. sorts itself out.
Stocks to Buy for Q2: BioTelemetry (BEAT)
BioTelemetry, Inc. (NASDAQ:BEAT) is a growing player in a the expanding field of remote patient monitoring.
Basically, that means it builds equipment that can help monitor patients that have cardiopulmonary issues or diabetes remotely. Your vital signs are recorded and your physician can send you a note or set up an appointment if he or she sees something of concern.
Also, it means that all that data can be analyzed to see how stress, fatigue and nutrition affect your overall numbers. While this technology has been around a while — BioTelemetry was founded in 1994 — it is only recently that computers and telecommunications have become fast enough to process the real-time information.
This is a healthcare play on fast expanding Internet of Things revolution. Up nearly 150% since this time last year, BEAT stock is only just hitting its stride.
Stocks to Buy for Q2: CRH Medical (CRHM)
CRH Medical Corp (NASDAQ:CRHM) is a Canada-based company that got its start in the gastrointestinal (GI) sector. Hemorrhoids to be exact. It was a one-stop shop for GI specialists looking for turnkey hemorrhoid treatments.
While this was a good, consistent business, in 2015 CRHM moved into providing anesthesia services for ambulatory care (aka outpatient) facilities for endoscopic procedures. The transition over the past decade has been from sedation to light anesthesia, so that patients can recover quicker and the outpatient facilities can do more procedures in the same amount of time.
According to the company, anesthesia for endoscopic procedures has grown from 15% in 2003 to 50% in 2015. In the U.S. market, think all the colonoscopies for the baby boomers that will be driving business for at least the next decade or two.
CRHM stock is up 150% in the past 12 months, but its sub-$250 million market capitalization has some serious room to grow.
Stocks to Buy for Q2: Nvidia (NVDA)
Nvidia Corporation (NASDAQ:NVDA) describes itself as a data visualization company. That is certainly an accurate description but it leaves out why this company has taken off in the past year or so.
The reason NVDA, a stock with a respectable $65 billion market cap is up more than 200% in the past 12 months is because it sits at the confluence of the most disruptive technologies in the marketplace today: Big Data, virtual reality, augmented reality, massive multiplayer online gaming, the Internet of Things and self-driving cars, to name a handful.
Starting as a high-end graphics card maker, NVDA has found a way to take its products beyond just high-powered graphics. And now it’s no longer a quirky boutique tech firm — it has real weight and partners that range from major car makers to the most powerful tech firms.
Right now, NVDA stock is consolidating after its monster run in 2016 and Q1 2017. That’s a good opportunity for long-term investors interested in the future of tech.
Stocks to Buy for Q2: Momo (MOMO)
Momo Inc (ADR) (NASDAQ:MOMO) is a social media app that is taking China by storm.
More specifically, it is a location-based messaging app with live video and other additional features. Starting as a dating app similar to Match.com, it expanded its business into the broader social media space and now has over 81 million monthly active users.
This product hit with perfect timing. As people leave the countryside and come to the big cities in China for work, they don’t know anyone and have to not only figure out the city, but also build a social network. MOMO allows them to do that. While social media apps aren’t hard to build, it’s hard to enter the market if one of those companies has already become the default app. And by its 25% stake in the company, Alibaba Group Holding Ltd (NASDAQ: BABA) the huge online player in China, has put its stamp on MOMO.
It’s still a relatively small company — $6.9 billion market cap — but analysts continue to be very bullish on its growth both in China and eventually abroad.
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.