As you’ve seen, this is a crazy market. Unemployment numbers come out and another 4 million are added to the rolls. Housing prices tank. PMI tanks.
And the market trades up by a couple percent. Then it ends almost flat. Rinse and repeat — on the upside or downside.
Given the lockdowns, it’s anyone’s guess what earnings will look like going forward. And evaluating companies will be challenging, to say the least.
One way to avoid all this is to buy companies that are better buys now and should recover quickly once these muddy waters begin to clear. The best of these companies have an advantage that shows up in the fundamental and quantitative data I use to find strong Growth Investor plays.
The seven exciting stocks for aggressive investors I have picked below are A-rated stocks in my Portfolio Grader, at least for their Momentum and Overall scores.
- Enphase Energy (NASDAQ:ENPH)
- XBiotech (NASDAQ:XBIT)
- Drdgold (NYSE:DRD)
- Orion Energy Systems (NASDAQ:OESX)
- Envela (NYSEMKT:ELA)
- NantHealth (NASDAQ:NH)
- iFresh (NASDAQ:IFMK)
Just bear in mind, these aren’t huge firms — only a couple even qualify as large-cap stocks and then, not by much. These are for risk-tolerant investors looking to leverage some upside when all this volatility pans out.
Stocks to Buy: Enphase Energy (ENPH)
Enphase Energy is in the renewable energy business. But it has captured a strong position in a unique niche — it makes microinverters.
You see, when you generate power with wind or solar, the electricity is converted to direct current (DC). But the grid (and all the devices in a house or business) operate on alternating current. Inverters change the electricity from DC to AC to make it available for use in a building or to be uploaded back to the grid.
There are a couple other nuances to inverter technology, but simply put, ENPH is one of the top companies in the sector. And it has been at it for quite a while, so it has won a lot of business and its production line can handle national — and international — demand. That means it has a significant competitive moat.
Add the fact that a new study shows that Covid-19 patients who were more exposed to fossil fuel pollution had worse outcomes, and you have yet another bullish argument for renewables.
The stock is up a whopping 261% in the past year and 45% year to date. It also has a $4.7 billion market capitalization and has been around since 2006. Back then, renewables were still a niche industry.
XBiotech is all about human-derived monoclonal antibodies. Antibodies are part of the immune system that are activated when an organism realizes there is an invader. XBIT gets the antibodies and then works to parse them out to fight particular diseases.
It also can partner with other biotechs and labs to look for specific antibodies. Antibodies can be synthetically produced, but human antibodies are more advantageous for discovery and development.
For example, it recently partnered with BioBridge Global to collect and distribute plasma from Covid-19 patients that no longer have the disease. It can then research which antibodies have the greatest effect on the virus and perhaps develop a treatment or a vaccine. It’s the kind of niche where you can find great business models of the sort I target at Growth Investor.
The company has been around for 15 years now, but it only has a market cap of $395 million. That means it can get knocked around when there’s bad news. But it can soar when there’s good news.
Case in point: In January it was trading nearly 100% higher than it is right now. But the stock is still up 43% in the past 12 months.
Drdgold has been in the South African gold business since 1895. But it’s not a miner.
It’s a reclamation company. It acquires or leases old gold mines, sand dumps and slime dams where the soil was processed to separate the gold from other materials. But the old methods of sorting out the gold weren’t very efficient, so DRD began retreating the surface tailings to extract gold from the leftovers.
And it has kept it in business for over 120 years. It can also wind up or down these operations depending on the price of gold. And now operations are booming.
Given its long history in the country, it has a secure position in the sector. As long as gold prices are rising, so are DRD’s margins and profits.
The stock is up 371% in the past 12 months, and 83% year to date. Gold should remain strong for a while, so DRD is in good shape. Plus, it delivers a decent 2.3% dividend, even after that huge run.
Orion Energy Systems (OESX)
Orion Energy Systems designs, develops and retrofits lighting systems for commercial clients as well as wholesale contractors.
The company capitalizes on two long-term trends in place, one of which is even more powerful now.
First, it is driving energy efficiencies throughout the corporate system. From offices to stores to warehouses, there are huge energy demands, and those corporations want to find ways to cut costs.
Second, with the trend of e-commerce really ramping up now due to lockdowns around the nation, warehouses and distribution centers are key in keeping goods flowing and consumers consuming. New warehouses are popping up all over to help create more efficient logistics. Lowering operating costs is crucial. In the near future, these sorts of ramp-ups will be facilitated by the key upgrade to wireless technology going on now.
All this is evident in the company’s stock price. OESX is up 154% in the past year, and up nearly 20% year to date. And it still trades at a price-earnings ratio of 10.
Envela has been around since 1965 and is a small firm with a market cap of just $99 million.
And that market cap was significantly smaller 12 months ago. The stock has shot up a massive 701% in the last year and 161% year to date.
What does it do? It buys and sells jewelry, watches, diamonds — and precious metals. It also has a division that buys old computers and refurbishes them for resale in the U.S. and abroad.
But with gold rallying, its inventory has grown in value. And with the massive economic slowdown, that also means people with gold and other similar valuables will be looking to sell some of their holdings to Envela or its subsidiaries.
You can look at this as a gold play with a twist.
But even after its huge run, the stock is still trading at a trailing P/E of 34. If gold continues to rise, so will the fortunes of ELA.
NantHealth has been around since 2010 and is part of the new wave of personalized healthcare treatments. Its technology helps patients, hospitals and insurers develop optimized outcomes to create a more efficient and effective system for all participants.
NH went public in 2016, and after a big IPO pop has settled in where it currently sits, with a market cap of nearly $230 million. It has operations in the United Kingdom, Singapore, Canada and the U.S.
The stock popped earlier this year when it announced it was launching AI-based software to better diagnose lung cancer. It also announced that it was selling its connected care business to focus more on its software diagnostic tools. And any software, no matter how powerful in theory, needs the right technological infrastructure to make it “go.” Technology-forward companies like NantHealth stand to benefit.
The stock is up almost 200% in the past year, and up 100% year to date. A clearer business focus may be just what the doctor ordered.
iFresh is the largest Asian supermarket chain on the East Coast, and the first Chinese supermarket chain to go public.
It has 12 supermarkets — most under the New York Mart brand — in New York, Massachusetts, Florida and Connecticut. While the stores’ focus is on the Asian community, there’s little doubt that it also appeals to a growing number of non-Asian shoppers for quality, convenience and selection.
Also, large supermarkets don’t tend to operate in densely populated cities or minority communities, so having a market with a broad selection of fresh fruits and vegetables nearby is a big plus.
While the stock is up just 15% in the past year, it’s up almost 200% year to date. But remember, this is a small company — a $25 million market cap — in a low-margin, competitive business. If it found a formula for growth, however, it has huge potential.
High-margin, scalable businesses are more often found in the technology sector. Which brings me to one of the investing themes I’m most excited about now.
The 5G Buildout Is an Incredible Opportunity for Investors Right Now
Within two years, most cell phones will be 5G enabled and be able to wirelessly handle television streaming. With 5G, we’ll have cable modem speeds on any device; no need to plug in. That’s a big deal for rural areas … the very same areas that are also key to President Donald Trump’s reelection. So, by pushing 5G over the goal line, Trump will deliver a big win for his base — and strike a blow against Chinese rivals like Huawei Technologies.
But, in the big picture, 5G is about much more than trade wars and faster downloads. Because 5G is 100 times faster than 4G, it’ll allow your internet devices to work in real time. That advancement is a game changer for tech companies.
With the 5G infrastructure market set to grow at an annual rate of 67% over the next 10 years, the entire market will go from $780 million to nearly $48 billion. This buildout is where I see opportunity with 5G stocks now.
Cable companies can do their best to fight back with fiber optics … but they can’t compete with the convenience of a smartphone, once it’s got ultra-fast 5G. That’s how my 5G infrastructure play will capture more market share from the broadband cable companies.
The stock I’m targeting is enjoying an influx of big money on Wall Street, and it has strong fundamentals, too — making it an A-rated “Strong Buy” in my Portfolio Grader system.
When you do, you’ll see how to claim a free copy of my new investment report, The Netflix of 5G, which has full details on this company — and what makes it such a great buy now.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.