There’s no doubt that the first half of 2017 has been a bit confusing. Consumer spending is tepid yet unemployment is at a record low. Interest rates are low, but car and home purchases are floundering. The Federal Reserve is moving like we’re in recovery, but projections for growth this year have been cut.
Healthcare reform can’t make it through Congress, and neither can tax reform or infrastructure stimulus. And through all this the market has been going higher and higher.
The trick in this kind of bizarre-o world is to work your proven strategy and ignore all the confusing signals around you. That’s why I like to examine stocks from both the fundamental and technical perspectives, to make sure one isn’t leading me in the wrong direction. When both confirm a good company I know the stocks can get through almost any challenges.
Following are seven A-rated stocks that are summer buys. Now that summer is officially here, the markets tend to lounge about like so many beach-goers. These stocks will continue to work hard this summer and beyond.
Summer Stocks to Buy: Constellation Brands (STZ)
Earnings Growth: 21.5% in the current quarter
Constellation Brands, Inc. (NYSE:STZ) is one of the largest focused wine, beer and spirits companies in the world. It has an impressive array of wine labels as well as some the top selling imported beers in the U.S., including Corona and Modelo brands. It also owns the up and coming craft beer brand Ballast Point.
Its spirits line is small but is growing briskly.
But the most impressive thing about STZ is its numbers. It has rock solid operating margins and net profit margins and its brands are some of the most popular in each of their respective markets.
STZ is coming off a solid first-quarter earnings report in late June and STZ stock is up 26% year to date. Given the heat and the height of beach season, next quarter’s numbers should be even more impressive.
Summer Stocks to Buy: Nvidia (NVDA)
Earnings Growth: 72.5%
Basically, NVDA is the leading visual computing companies on the planet. In the old days of the digital age, that meant NVDA simply made graphics processing units (aka, graphic cards or GPUs). The allowed crisper clearer visuals.
As the internet age dawned, GPUs were becoming a key part of the daily experience of being online. Gamers were the only ones who demanded the highest quality and fastest GPUs, which NVDA made.
Now, as we get to the next iteration of the internet — online gaming, streaming video, self-driving cars, cloud computing, etc — visual computing has become one of the most important technologies in the marketplace. And NVDA is at the hub.
Up 46% in just the past three months, NVDA is certainly heating up this summer for a very long run.
Summer Stocks to Buy: Microchip Technology (MCHP)
Earnings Growth: 46.4%
Microchip Technology Inc (NASDAQ:MCHP) is a leading microprocessor and analog semiconductor company. Basically that means it makes chips – and licenses the technology – for computer chips with very specific functions and also makes and licenses chips that convert analog signals into digital signals.
The latter technology digitizes things like voices, temperature, motion, etc. We’re just beginning the transition to a new era where practically everything we own is ‘smart’. It provides feedback to its owners and its builders on how it is operating, what it’s doing and when it needs to be serviced.
Our smartphones count our steps and calculate calories. They provide real time directions from Point A to Point B. They allow us to share pictures across the continent instantaneously. Now, the rest of our devices are becoming similarly integrated into our ‘analog’ lives. And MCHP is supplying the modern nuts and bolts to get that done.
The stock is blowing away earnings estimates and up 22% year to date, but it’s still in the shadow of larger competitors. That means it’s still undervalued.
Summer Stocks to Buy: T-Mobile (TMUS)
Earnings Growth: 52%
T-Mobile US Inc (NASDAQ:TMUS) is the No. 3 mobile carrier in the U.S. Trying to compete domestically with AT&T Inc. (NYSE:T) and Verizon Communications (NYSE:VZ) is no easy task. TMUS is the “Baby Telekom” of Deutsche Telekom, the leading German telecom player.
But it has been growing its reputation as the “un-carrier” and has tried to disrupt the industry by acting less corporate and more creatively than it larger two competitors. And there’s even talk now from back in Germany that TMUS might be making a move for its second tier rival Sprint Corp (NYSE:S). That would be a big deal.
However they both run on different telecom platforms, which would make subscriber integration challenging. But it keeps the name in the press and that is what’s important.
TMUS has certainly outperformed its rivals in the first half of the year, and that trend may well continue.
Summer Stocks to Buy: NutriSystem (NTRI)
Earnings Growth: 15%
NutriSystem Inc (NASDAQ:NTRI) is in the weight management industry. What differentiates it from its competitors is its focus on delivering nutritionally balanced meals to its members.
In that way, it can get beyond the weight loss label and use nutrition as its sales point. You’re not overweight, you’re finding a way to eat healthier. This subtle differentiation is paying off big.
Year to date NTRI is up a solid 49%. The other strength in the NTRI program is it is built as a custom program. You go to the website, plug in your numbers and its sets your goals and suggests a diet plan.
If you don’t want to mess around, you order, pay and begin. If you want to customize your plan, you can do that as well. No meetings. No cards. No counting.
There’s plenty of opportunity in this space, especially as subscribers rise, because that means food costs go down and NTRI can reach more people. This system will go far beyond New Year’s resolutions and ‘swimsuit’ dieting.
Summer Stocks to Buy: Rogers (ROG)
Earnings Growth: 38.6%
Rogers Corporation (NYSE:ROG) has been around since 1832 and was run by a Rogers for nearly 100 years. In 2007, it celebrated its 175th year anniversary. There are very few publicly traded companies that have a lineage like that.
What it proves is, ROG knows how to make money in any kind of environment. It maintains a $2 billion market cap, so it was never interested in expanding its empire into a behemoth. It has stuck to its knitting and stayed flexible and innovative.
And now, it is well positioned for a new wave of demand in the Internet of Things (IoT) space. Smart cars and a smart products are expanding rapidly, and this technology isn’t limited to the consumer space. Commercial, industrial and military applications are also growing quickly and ROG is a go-to supplier for mission critical materials and components.
The stock is up 37’% in the past three months, which means its getting more attention on the Street from investors looking for the less obvious IoT plays.
Summer Stocks to Buy: Heska (HSKA)
Earnings Growth: 38.5% for the current year
Heska Corp (NASDAQ:HSKA) is one of the companies that’s behind the new wave of veterinary diagnostics. In the past, like in the human healthcare sector. If you needed lab work, the nurse would take your specimen and ship it off to a lab, or you would have to go to a separate lab to get the work done.
Then in a few days to a week, you would get your results. Now much of that work is done on the spot, or within 24-48 hours using new diagnostic equipment and ‘lab on a chip’ technology.
HSKA is one of the companies that’s bringing this type of tech to vets. The vet now has the diagnostic equipment to perform these services in-house and get the results while the owner is still in the clinic.
This allows vets to cut out a middleman in their practice and provide a new service that can add to other services for their patients. And it seems to be working. Year to date HSKA is up 43% and the trend is in place for continued long-term growth.
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.