It's a good time to be in the market! The major indices have been reaching new highs amid a better-than-expected earnings season and an upcoming rate cut. We're even getting some good news on trade as talks are scheduled to resume soon.
If the S&P is making new highs, then so are plenty of individual stocks as more and more of them beat quarterly expectations. And the best part is that the stocks making new highs right now should continue to do so until something changes. It's the same idea as: "an object in motion tends to stay in motion".
We've got a screen that finds Zacks Rank #1s (Strong Buys) that are reaching new highs... and show no signs of stopping. Here are three picks from the screen:
Snap Inc. (SNAP)
One of the big success stories of this earnings season so far was Snap Inc. (SNAP), because who doesn’t want to send out a Snapchat of themselves with kitty cat whiskers and ears?
Seriously though, this Zacks Rank #1 (Strong Buy) technology and social media services staple now has 203 million daily active users and has gained more than 200% year to date.
It’s part of the Internet-Software space, which is in the Top 20% of the Zacks Industry Rank. However, the industry is only up about 38% so far this year.
The company went public in March of 2017 and has beaten the Zacks Consensus Estimate in 9 of its 10 reported quarters. That includes 8 straight quarters in a row with an average beat of more than 30% in the past 4.
SNAP is still not profitable, but you can certainly see it moving in that direction. It lost 6 cents per share in its second quarter, which was 40% better than the Zacks Consensus Estimate of a wider loss of 10 cents. It also narrowed the year-earlier loss of 14 cents.
Revenue jumped 48% from last year to $388 million, which also surpassed the Zacks Consensus Estimate by more than $30 million. Average revenue per user advanced 36.4%.
Earnings estimates haven’t moved much of late. Analysts still expect a loss of 30 cents for 2019. However, the loss for 2020 is expected to narrow by more than 100% to only 11 cents.
Skechers USA (SKX)
You’re going to need a pair of good and comfortable shoes when marching to new highs… and it doesn’t hurt to be a bit stylish as well.
Fortunately, that’s exactly what Skechers USA (SKX) is all about! This Zacks Rank #1 (Strong Buy) makes a diverse range of lifestyle and performance footwear and has jumped 72.5% so far this year.
Since reporting strong second-quarter results last week, earnings estimates have been climbing. Over the past 7 days, the Zacks Consensus Estimate is up 3.5% for this year and 6.2% for next year.
Right now, we expect earnings per share of $2.40 in 2020, which would mark a nearly 15% improvement over this year’s estimate of $2.09.
SKX has now beaten the Zacks Consensus Estimate for four straight quarters with an average beat of nearly 25%. It has also topped in 7 of the last 8 quarters.
Most recently, second-quarter earnings per share of 49 cents crushed the Zacks Consensus Estimate by more than 48%.
Revenue of $1.26 billion was also better that our expectations while up nearly 11% from last year. Same-store sales increased 4.9%, including a 4.2% domestic increase and a 6.7% international advance.
SKX expects international sales to be a big factor moving forward. The company is introducing new styles at pretty much the same time all around the world.
It was certainly a success in the second quarter as SKX enjoyed growth in every region. The biggest dollar increases came from India, the Middle East, China and Mexico.
In addition to this global distribution platform, we are also encouraged about SKX’s emphasis on new products, cost containment efforts and inventory management.
Companies are leaving fortunes on the table if they can’t monetize the data that they’re being bombarded with.
That’s where Alteryx (AYX) comes in! This Zacks Rank #1 (Strong Buy) is a data science and analytics company that has soared more than 100% so far in 2019.
That’s nearly 3 times better than its highly-ranked space of Internet Software, which is in the top 22% of the Zacks Industry Rank. The industry is only up about 35% year to date.
But an even better sign that AYX is gaining momentum is in that beautiful chart below. The company has beaten the Zacks Consensus Estimate in each quarter since going public in 2017.
That’s 9 beats in a row with an average surprise of nearly 120% in the past four!
Most recently, it posted earnings per share of 4 cents in its first quarter, which was 150% better than the Zacks Consensus Estimate for a loss of 8 cents.
Revenue advanced 51% year over year to $76 million. It added 277 net new customers in the quarter, giving it 4,973 customers at quarter end. That’s 35% more customers than last year.
Earnings estimates have been pretty steady for a while now, except for a 7.5% improvement for this year over the past 3 months.
However, a further signal for AYX’s potential moving forward is next year’s Zacks Consensus Estimate of 69 cents, which suggests a year over year improvement of more than 60%!
AYX will be going for its tenth straight beat in a row on July 31 after the close.