I’m not a big horse racing guy. But I do enjoy watching the occasional live event. My wife and I usually hit up Arlington Park just outside Chicago for a few races when we go up North to visit her family, and I’ve even managed to win a few bucks.
One thing I like to do at the racetrack … and when I’m evaluating stocks … is watch the “horses” who get out of the gate the fastest. They don’t always win, of course. But you can find some great portfolio picks by zeroing in on stocks that are seeing strong early momentum.
To help you identify them, I created an Early Leaders in 2018 Stock Screener using the tools available to our Weiss Ratings Platinum subscribers. I started by screening for U.S.-based companies rated “B-” (BUY) or higher. Then I focused on stocks with higher year-to-date returns than the S&P 500, and lower price-to-earnings ratios than it. Because I’m a guy who likes income investments, I eliminated stocks with dividend yields less than the 1.8% yield of the S&P 500.
Finally, I wanted to weed out lower-priced, micro-cap, and illiquid stocks. So, I limited my search to stocks with at least 50,000 shares in average daily trading volume, market capitalizations of at least $50 million, and closing prices of at least $5.
My screen produced 44 companies as of late last week. Here they are:
|Data Date: 1/19/2018|
You can see a mix of stocks made the grade. They include the battery and lighting products company Energizer Holdings (ENR, Rated “B-”), with recent gains of more than 14% … the apartment owner, operator, and developer BRT Apartments (BRT, Rated “B”), also with YTD returns of more than 14% … and the asset management firm T. Rowe Price Group (TROW, Rated “B-”), with gains of around 12%.
Energizer recently surged on news it was acquiring the Rayovac and Varta family of battery and lighting products from competitor Spectrum Brand Holdings (SPB, Rated “C+”) for $2 billion. Meanwhile, T. Rowe is benefiting from strong capital markets and the positive impact they’re having on assets under management. AUM jumped 22.2% to $991 billion as of December 31, 2017 from $811 billion a year earlier.
Can these three stocks, and the other 41 on my list of early leaders, keep it up? Or will they get gassed later on this year?
No one can say for sure. But you have to like their strong Weiss Ratings, their early momentum, their market-beating yields, and their other solid fundamentals. If you’re looking to beef up your portfolio given the overall bull market, you might want to pour yourself a mint julep, take a seat, and start sifting through the list for a few buys!
Until next time,