This year we have been running a weekly series of articles taking a look at the stocks appearing near or at the top of our Stock Score Report rankings.
The ranking system is unique in that it combines both technical and fundamental screeners to provide overall rankings to the entire stock universe. We have been able to identify some impressive stocks that have managed to greatly outperform the overall market during this often-volatile calendar year on Wall Street.
We developed the screener with both technical and fundamental criteria because we knew that given the market’s strong run in recent years investors were becoming increasingly concerned about a possible market correction. When markets weaken, the stocks that have the best chance of avoiding a selloff are those that have shown recent strength and also have good underlying fundamentals to warrant future strength.
There remains a lot of uncertainty in the market at this time which is why we will continue to highlight the top-ranking stocks in our screener for consideration. This week’s group of stocks are all at the top of the rankings and look like solid buy candidates at this time.
Stock Score Report gives QuinStreet (QNST) an overall ranking of 95. The stock’s technical scores are fantastic, but what really sets the stock apart is its near perfect 98 fundamental score. The company provides internet marketing services and has enjoyed strong growth the last few years. Profits are up 32% per annum over the last five years, are expected to rise 44% during the current year, and analysts have a very robust forecast of 112% average annual earnings growth for the next five years. The company most recently reported earnings at the end of October with a small earnings beat and big sales beat. Earnings were up 75% year over year while sales rose 29% over the same time period. All 6 analysts who cover the stock rate it a “strong buy” and have an average price target of $18.55. QNST is currently trading at $15.22.
Delta Air Lines
Delta Air Lines (DAL) has been rising over the last month as oil prices have fallen, and the stock is currently attempting to break through its all-time high. Stock Score Report gives DAL an overall ranking of 93, with near perfect technical scores and a very strong fundamental score of 85. The airline reported better than expected earnings mid-October, extending its streak of earnings beats to five quarters. Last quarter earnings rose from $1.57 to $1.80 year over year, and analysts forecast average annual earnings growth of 16% over the next five years. Of the 12 analysts that cover the stock, ten rate it a “strong buy” and two give it a “buy” rating. The stock is trading at $58.68 with an average price target of $68.50.
Euronet Worldwide (EEFT) has trended steadily higher since April, with the stock currently trading just shy of its all-time high. The company provides electronic payment solutions to financial institutions, retailers, service providers and individual customers. The company has shown strong earnings growth of 22% per annum over the last five years, and analysts forecast profits will continue to rise by 15% annually over the next five years. Stock Score Report gives EEFT an overall ranking of 93 with strong scores for both technical and fundamental factors. Analysts are incredibly bullish on the company, with seven of the eight analysts that follow the stock giving it a “strong buy” rating. EEFT currently trades at $116.86 with an average price target of $137.14.
Mellanox Technologies (MLNX) gapped sharply higher following a strong Q3 report toward the end of October, and with the stock’s recent strength Stock Score Report gives it an overall ranking of 93. The stock’s technical scores are near perfect, and it gets a very solid fundamental score of 84. Mellanox manufactures semiconductors and has enjoyed strong earnings growth in recent years. Profits are up 37% per annum over the last five years, are expected to rise by 113% during the current year, and continue to rise at an average annual rate of 45% over the next five years. Analysts remain very bullish on the stock, with 12 of the 13 analysts who cover it rating it a “strong buy”. The company will next report earnings January 23 with the consensus calling for earnings of $0.92 per share, up from $0.82 during the same period last year. MLNX trades at $91.06 with an average price target of $108.45.
Health benefits provider UnitedHealth Group (UNH) has been a strong outperformer in 2018 and the stock is currently trading just pennies below its all-time high. Stock Score Report gives UNH an overall ranking of 92 with near perfect scores for both its short and long-term technical trends. The company’s Q3 report in October topped estimates on both the top and bottom line for the fourth straight quarter. Earnings in the most recent quarter rose from $2.66 per share to $3.41 per share year over year. The company has enjoyed strong earnings growth of 20.8% annually over the last five years and analysts forecast profits to continue to rise by an annual rate of 15.8% over the next five years. UNH has a forward P/E of 19, which is reasonable considering the strong recent and forecast earnings growth, and the stock should continue to trend higher as long as the company continues to hit or beat its future estimates. UNH trades at $278.90 with an average price target of $301.53.