Mid-Year Momentum Plays: 7 Stocks to Buy for the Second Half


  • Costco (COST): Costco offers a significant hedge against inflation.
  • First Solar (FSLR): First Solar was hit with economic woes but could be on a sustained comeback.
  • Eli Lilly (LLY): Eli Lilly enjoys relevance with its weight-loss drugs.
  • Jumpstart the rest of the year with these momentum stocks to buy.
Momentum stocks - Mid-Year Momentum Plays: 7 Stocks to Buy for the Second Half

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There’s certainly some level of comfort in bidding up the same names as everybody else. But the most satisfying returns stem from momentum stocks that you identified before the big wave. When the rest of the field realizes what’s going on, your selected ideas could drive even higher.

Further, the month of June may present an ideal framework for considering the next big plays. Given the adage of sell in May and go away, you may be able to pick up some possible discounts. Plus, you can acquire shares ahead of the second half of the year.

Potentially, investors may be motivated to end 2024 on a high. That could help bolster the case for these momentum stocks.

Costco (COST)

A Costco Wholesale (COST) warehouse in Auburn Hills, Michigan.
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Membership-only retailer Costco (NASDAQ:COST) represents one of the momentum stocks thanks to its relatively blistering performance. Since the start of the year, COST stock gained over 27% of its equity value. In the past 52 weeks, it moved up almost 60%. Analysts also rate shares a consensus strong buy. However, the issue is that with an average price target of $837.92, COST doesn’t give much room for implied growth.

However, the high-side target of $940 calls for a move of nearly 14% higher from current levels. That may be more reflective of reality. One advantage that Costco levers is that its core customers are generally upwardly mobile and enjoy a high income. Second, the business model natively offers a mitigatory effect against inflation.

If you buy in bulk, you can lower your per-unit cost. Assuming the dollar continues to inflate (i.e. lose value), this is an ideal incentivization for shopping at Costco. Combine that with a higher-income consumer and you have a recipe for sustained success.

Experts call for fiscal 2024 revenue to hit $254.82 billion. I wouldn’t be surprised if the figure lands at the high-end estimate of $258.16 billion per the aforementioned recipe.

First Solar (FSLR)

Person holding smartphone with logo of US renewable energy company First Solar Inc. (FSLR) on screen in front of website. Focus on phone display. Unmodified photo.
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To be frank, solar energy specialist First Solar (NASDAQ:FSLR) wasn’t looking like one of the momentum stocks. Earlier, the company struggled from the terrible combination of high inflation and most pressingly, elevated borrowing costs. With financing charges through the roof, would-be customers simply opted out of going solar. And that of course crimped FSLR’s performance in the market.

However, it’s been absolutely flying in the trailing month, with the security gaining over 37%. Looking at the situation from a year-to-date perspective, FSLR stock returned stakeholders nearly 55% of its value. Potentially, it could go higher. Analysts rate shares a consensus strong buy with an average price target of $262.45. That implies downside risk. Still, the most optimistic target calls for $356, which is up nearly 34%.

I think that’s realistic given the possibility of permanent inflation. If the cost of everything continues to rise – and it’s not an unreasonable proposition given the strengths of the labor market – then it may make long-term sense to go solar.

The consensus revenue target for fiscal 2024 calls for $4.52 billion. That’s up 36.2% from the prior year.

Eli Lilly (LLY)

Eli Lilly and Company World Headquarters. Lilly makes Medicines and Pharmaceuticals XI
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As a pharmaceutical giant, Eli Lilly (NYSE:LLY) offers tremendous relevancy. It’s been one of the top momentum stocks, gaining about 41% since the beginning of the year. That might cause some prospective investors to sit on the sidelines for fear of bag-holding. However, in the trailing month, LLY stock gained nearly 9%. It’s simply on the move.

Right now, obesity care and the broader weight-loss ecosystem is on fire. If I may be blunt, Eli Lilly in the U.S. has a large addressable market. Fundamentally, the waistline of Americans has grown significantly. That’s just a medically researched reality. Second, Covid-19 didn’t help matters (or it did if you’re looking at LLY cynically). Quarantine sparked unhealthy eating habits, leading to unwanted weight gain.

So yes, LLY is on the move. Still, in the second half of the year, it can continue swinging higher. Analysts rate shares a consensus strong buy with an average price target of $891.56. That implies only 7% upside potential. However, the high-side target calls for $1,001.

For fiscal 2024, covering experts project consensus revenue to hit $43.05 billion. That’s up 26.2% from last year’s tally of $34.12 billion.

Xylem (XYL)

xylem app
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A large water technology provider, Xylem (NYSE:XYL) represents one of the momentum stocks firstly for its outright performance. Since the beginning of the year, XYL jumped nearly 21%. Over the past 52 weeks, it gained over 29%. However, recent price action hasn’t been too kind. In the trailing one-month period, for example, XYL lost roughly 2%. That could be an opportunity.

At some point, I imagine that XYL will become one of the positive momentum stocks to buy. The key is to get in before the wave breaks northward. Fundamentally, the company offers critical services, particularly in the water infrastructure and wastewater management departments. Both are absolute necessities for a properly functioning society. Also, water stewardship will be a huge issue amid the global water crisis.

Analysts rate shares a consensus strong buy with a $149.73 average price target. That’s up a little over 9%. However, the high-side target calls for $165, which implies over 20% up. That seems more aligned with reality given the criticality of the business.

For fiscal 2024, experts project fiscal 2024 revenue to hit $8.56 billion. That’s up 16.2% from last year.

Pure Storage (PSTG)

The Pure Storage logo at the entrance to its office in Mountain View, California. PSTG stock.
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Moving onto the potentially greater-rewarding ideas among momentum stocks, investors should look into Pure Storage (NYSE:PSTG). A publicly traded technology firm, Pure develops all-flash data storage hardware and software products. With both enterprises and individual workers running tons of data-centric and processor-consuming applications, these products may see increased demand. Not surprisingly, PSTG stock has been a strong performer.

Since the start of the year, shares have gained almost 74% of equity value. In the trailing month, they’re up 12%. While PSTG is undoubtedly a top performer, it’s been obviously overshadowed by other tech darlings. Still, if you’re into the broader innovation ecosystem, PSTG deserves consideration. Analysts peg the security as a consensus strong buy with a $71.24 average price target. The high-side estimate goes up to $80 per share.

Again, with data needs becoming more onerous, Pure Storage should be in prime position to enjoy downwind benefits. For the current fiscal year, experts are looking at earnings per share to hit $1.60, up nearly 13% from the prior year. Also, revenue could land at $3.13 billion, up 10.7% from calendar 2023 (fiscal 2024).

Flutter Entertainment (FLUT)

FanDuel logo of a sports betting company is seen on a mobile phone screen in front of FanDuel website on background.
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Formerly known as Paddy Power Betfair, Flutter Entertainment (NYSE:FLUT) represents an international sports betting and gambling firm. Now, the issue has become controversial, in particular with professional baseball players embroiled in the negative spotlight. Still, the scandals also point to the incredible popularity of sports betting. With that in mind, FLUT should be on your radar for potential momentum stocks to buy.

Since the start of the year, Flutter shares have performed decently, gaining 10%. Admittedly, it has encountered some choppy weather in recent sessions, with FLUT losing roughly 6% of market value. However, if you’re an opportunistic contrarian, FLUT could present a relatively undervalued idea.

Notably, shares trade at 2.73X trailing-year revenue. In June of last year, this metric soared to 3.7X. In addition, analysts are calling for sales of $13.73 billion in fiscal 2024. One year later, the consensus target is aiming for $15.46 billion. The blue-sky revenue target is seeking $15.82 billion.

Not only that, analysts rate FLUT a consensus strong buy with a $260.07 price target, implying almost 36% upside. Therefore, the red ink may be considered an acquisition opportunity.

Marvell Technology (MRVL)

image of the marvell (MRVL) technologies office campus
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A technology firm focused on semiconductor development and production, Marvell Technology (NASDAQ:MRVL) should be on your radar for momentum stocks to buy, but only if you’re willing to absorb some risk. Yes, since the start of the year, MRVL gained a bit over 14% of market value. That sounds decent enough, with some room for greater growth. However, in the trailing five sessions, it’s down almost 14%.

Fundamentally, investors didn’t respond well to Marvell’s latest financial disclosure. In the first quarter, the company posted revenue of $1.16 billion. This figure also beat Wall Street’s consensus view of $1.15 billion. However, on a year-over-year basis, the top line eroded 12%. In addition, the company’s adjusted earnings slipped 22.5% from the year-ago quarter.

Nevertheless, the underlying business presents vast importance to the broader tech ecosystem. Further, analysts have yet to back away from their consensus strong buy view. In fact, two experts have reiterated their bullish assessment in the month so far.

Overall, the focus may be on a big recovery in fiscal 2026 (calendar 2025). That’s when sales could rise to $7.16 billion, up 32.4% from fiscal 2025’s projected print of $5.4 billion.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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