Five stocks with what it takes to trade higher

 

Over the last several months we have run a series of articles on the top ranking stocks in InvestorsObserver’s new screening tool – the Stock Score Report.

We were initially attracted to the screening tool because it combines both technical and fundamental data when computing its overall rankings, and after finding so many strong names that have continued to reward investors even in a volatile market, we remain confident that the screener is a great place to find stocks that have what it takes to trade higher.

Whether you are a technical or fundamental trader at heart, you have to acknowledge that there are merits to both investing styles, which is why we really like the screener. Stocks with high technical scores have a proven track record of success in the market, and if you can find these stocks that also possess high fundamental rankings, you have the perfect recipe for a potential stock to add to your portfolio.

There have been some names that have bees steady fixtures at the top of the rankings, but each week we have managed to find a nicely diversified group of stocks among the top ranked stocks that are worth taking a closer look at.

If you are looking to put some money to work in the market, consider the following five stocks, or better yet, head over to InvestorsObserver where you can use the screener tool to find even more highly ranked stocks to add to your watch list.

UnitedHealth Group

UnitedHealth Group (UNH) is a diversified health care company that offers health care benefit plans and services. The stock has risen steadily over the last five years, and shares are currently trading just shy of their all-time high. UNH started to show a little weakness at the start of the year in sympathy to volatility in the overall market, but as market conditions have started to improve the stock is once again moving higher. The strong recent technical trends combined with a near perfect fundamental ranking gives UNH an overall ranking of 96 from InvestorsObserver’s Stock Score Report. The company reported quarterly numbers on April 17 that topped estimates on both the top and bottom line, and the company boosted its full-year guidance, which should keep bullish sentiment in the stock. UNH trades at $238.25 with an average price target of $269.50.

Click here to see a full copy of the report.

Chart courtesy of www.stockcharts.com

Skechers

Skechers (SKX) has been a constant presence at the top of the rankings for the last few months, and with the stock getting an overall ranking of 95, it remains one of the strongest securities in InvestorsObserver’s Stock Score Report. SKX has a perfect short-term technical ranking, and its long-term technical and fundamental rankings are both near-perfect. The strong rankings across the board suggest that SKX has what it takes to build on its recent gains. Skechers operates in a highly competitive sector and has managed to grow earnings by 43.7% per annum over the last five years with analysts predicting additional average annual earnings growth of 15.0% over the next five years. The strong growth numbers are driving the stock and with a forward P/E of 15.7 shares still look reasonably priced. SKX is trading at $42.57 with an average price target of $48.17.

Click here to see a full copy of the report.

Chart courtesy of www.stockcharts.com

Burlington Stores

Off-price retailer Burlington Stores (BURL) is another stock that has been a fixture at the top of the rankings. The stock has moved steadily higher since last summer and was able to continue trending higher during the recent market volatility to hit a new record high in April. The technicals are fantastic for the stock, and with a very strong fundamental ranking BURL gets an overall ranking of 93 from InvestorsObserver’s Stock Score Report. Recent stock gains have been supported by per annum earnings growth of 32.0% over the last five years, and looking ahead analysts see the company growing profits by an additional 18.6% per year for the next five years. The stock’s valuation remains OK, but with a trailing P/E of 25 and forward P/E of 20.6, the stock could experience resistance barring some big earnings beats in future quarters. The company’s last report came in early March, with top and bottom line beats, and it has posted positive earnings surprises the last 11 quarters. If the company is able to continue its streak of earnings surprises, profits will rise more than expected and analysts will lift their price targets and the market will continue to push the stock higher. BURL trade at $139.08, with an average price target of $142.46.

Click here to see a full copy of the report.

Chart courtesy of www.stockcharts.com

Medifast

Weight management company Medifast (MED) has enjoyed steady gainst since last summer, with the stock gapping sharply higher in March following a better than expected fourth-quarter report. The results shot the stock higher, and it is currently trading just shy of its all-time high. With the stocks’ gains over the last year, it comes as no surprise that MED scores a perfect 100 long-term ranking, and strong short-term technical and fundamental scores gives the stock an overall ranking of 93 from InvestorsObserver’s Stock Score Report. The company will next report earnings on June 5, with the consensus calling for earnings of $0.86 per share, up from $0.51 during the same period last year. Looking ahead, analysts see the company growing earnings by 15.0% per annum over the next five years. MED trades at $102.05 with an average price target of $108.00.

Click here to see a full copy of the report.

Chart courtesy of www.stockcharts.com

Constellation Brands

Alcohol company Constellation Brands (STZ) has been a top performer over the last year, with the stock currently trading just pennies below its all-time high. With the strong stock performance, and a solid fundamental ranking, STZ gets an overall 92 ranking from InvestorsObserver’s Stock Score Report. The stock remains reasonably priced with a forward P/E of 21.4, and analysts expect the company to grow earnings by 15.5% per annum over the next five years. The company has already reported this earnings season, with estimate topping results for the top and bottom line coming at the end of March, and the company will not report again until June 28, so shares should remain strong barring an major market weakness. STZ trades at $232.23 with an average price target of $248.25.

Click here to see a full copy of the report.

Chart courtesy of www.stockcharts.com

Symbols: BURL MED SKX STZ UNH
Michael Fowlkes

Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.

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