We are now about halfway through the third-quarter earnings season, and the numbers so far have been much, much better than expected. According to data from FactSet, roughly 80% of companies that have reported earnings have reported better-than-expected earnings. And they’ve been topping profit expectations by about 4%, on average. Meanwhile, 64% of companies have reported better-than-expected sales, with sales coming in about 1% above estimates.

Broadly, then, the third-quarter earnings season has been really good. So good, in fact, that it’s a big reason why the S&P 500 has surged to all-time highs in October.

Which stocks have been leading this big earnings rally? And will these hot stocks that won big this earnings season continue to win big over the next few quarters, too?

Let’s answer these questions — and more — by taking a deep look at seven hot stocks to buy that were among the biggest winners this earnings season.

Earnings Season Winners: Facebook (FB)

The earnings report: Global internet giant Facebook (NASDAQ:FB) reported third-quarter numbers in late October that breezed past expectations and underscored that this company is almost past the Cambridge Analytica scandal. Specifically, user growth trends remained healthy in the quarter at 8%-9%. Revenue growth trends remained robust at nearly 30% and expense growth moderated significantly, leading to a year-over-year operating margin drop of just one point.

Investors cheered the strong results, specifically on the margin front. In response to the print, FB stock rallied.

Where the stock is going next: Facebook stock is going higher. The broad FB growth narrative remains as healthy as ever — the ecosystem is still growing because consumers are addicted to the company’s digital properties. Advertisers continue to pour money into the ecosystem because engagement and reach remain second-to-none, and big data-security investments are finally peeling back, creating runway for margins to move higher. Putting all that together, Facebook projects as a 20%-30% revenue and profit growth company for the next few years.

FB stock presently trades at just 23-times forward earnings. That’s just too cheap for 20%-plus profit growth. As such, favorable fundamentals will keep FB stock in rally mode.

Apple (AAPL)

The earnings report: Over at Apple (NASDAQ:AAPL), the story of the past few years has been one defined by a sluggish hardware business and a red-hot software business. But, the company’s latest earnings report illustrated that by lowering the entry price for its newest iPhone models, Apple has breathed life back into its hardware business. Thus, both the hardware and software businesses are firing on all cylinders now.

As a result, AAPL stock surged to all-time highs in response to the strong Q3 print in October.

Where the stock is going next: AAPL stock should grind higher over the next few years because the growth narrative will remain very healthy. First, the holiday season should be a blockbuster one, thanks to robust iPhone 11 demand. Second, early 2020 iPhone demand should get a boost from a rumored new, ultra low-cost model. Third, the software business will get a big boost in 2020 from the expansion of Apple TV Plus. Fourth, late 2020 numbers should get a big boost from the first 5G iPhone.

Broadly, then, the outlook is for Apple to remain in strong growth mode. And so long as the company does, the stock will move higher because the valuation remains reasonable.

Tesla (TSLA)

The earnings report: Perhaps the biggest winner this earnings season so far has been Tesla (NASDAQ:TSLA). Shares of the electric vehicle maker rocketed 20% higher after the company reported a huge surprise profit in the third quarter. That boost was driven by demand growth, average selling price improvements, disciplined cost control and profit margin expansion. In the big picture, the quarter soothed demand and profitability concerns, and ultimately reaffirmed that the secular growth narrative here remains alive and well.

Where the stock is going next: TSLA stock will probably keep moving higher. There’s a lot of short interest that has yet to be used. Further, it appears that the European and Chinese expansion narratives are gaining momentum. The highly anticipated Model Y is set to launch next year. The self-driving business is making good progress. Margins are moving higher.

Generally speaking, all things are moving in the right direction for Tesla. With multiple catalysts on the horizon, all things will likely continue to move in the right direction for the next few quarters. As they do, TSLA stock should continue to move higher.

Intel (INTC)

The earnings report: In mid-October, global semiconductor giant Intel (NASDAQ:INTC) reported third-quarter numbers which soared past expectations. The driver of the strong results? Renewed data center demand, which is likely the result of reduced global trade anxiety and reinvigorated business confidence. Investors cheered the strong numbers from Intel, and INTC popped to six-month highs in response.

Where the stock is going next: At present, it looks like INTC stock is on track to take out the $60 level soon. Data center demand started to come back a few months ago, and that’s before the U.S. and China agreed to strike a series of “mini” trade deals. In the wake of this trade optimism, data center demand has continued to rebound. That means Intel’s revenue, margin and profit trends will improve materially over the next few quarters. As they do, the fundamentals say the stock should shoot toward $60.

Bank of America (BAC)

The earnings report: In mid-October Bank of America (NYSE:BAC) reported strong third-quarter numbers which largely reflected continued strong economic conditions in the U.S. Specifically, the company’s numbers were boosted by the consumer banking, loan and wealth management divisions. Those three businesses were all supported by confident U.S. consumers who are employed and seeing their wages tick up. Investors cheered the results — which came alongside rising yields, a normalizing yield curve and easing trade tensions — and BAC stock surged to 2019 highs in response.

Where the stock is going next: BAC stock will likely continue to move higher for the foreseeable future. The valuation seems reasonable and fair. Fundamentals are improving, characterized by easing trade tensions, accommodating fiscal policies, strong labor markets and rebounding business confidence. This combination of a fair valuation and improving fundamentals should keep BAC stock on an uptrend.

PayPal (PYPL)

The earnings report: Towards the back half of October, global digital payments platform PayPal (NASDAQ:PYPL) reported strong third-quarter numbers which underscored that the underlying growth narrative remains as robust as ever. Specifically, total payment volume growth yet again exceeded 25%, account growth exceeded 15%, engagement growth hit nearly 10%, revenue growth was roughly 20% and operating margins expanded. All in all, the quarter affirmed that everything remains on track here. In response, PYPL stock bounced back from what was a pretty steep selloff into the print.

Where the stock is going next: Sustained favorable fundamentals should continue to drive PYPL stock higher. The logic is simple. PayPal is at the heart of the secular growth e-commerce market. So long as the global consumer remains healthy, nothing is going to slow down the e-commerce market, since online retail offers numerous financial advantages over physical retail. As the e-commerce market continues to expand, PayPal’s volumes, revenues and profits will continue to march higher.

As they do, PYPL stock will head higher, too.

Crocs (CROX)

The earnings report: Another huge winner this earnings season was sandal maker Crocs (NASDAQ:CROX). The company reported third-quarter numbers which sailed past even the highest Wall Street estimates. Plus they included a strong fourth-quarter guide which impressed on the revenue, margin and profit fronts. In the big picture, the quarter affirmed that the “ugly shoe” trend, which has propelled Crocs back into relevance, remains vigorous. Investors have subsequently bid CROX stock up to multi-year highs.

Where the stock is going next: At these levels, valuation is a concern for CROX stock. The ugly shoe trend won’t last forever. As such, the best way to model Crocs is as a company with a slowing growth trajectory. Given that reality, today’s 25-times forward earnings multiple seems a bit steep for what I reasonably think will be about 10% profit growth in the long run. As such, valuation friction will likely short-circuit the big CROX rally soon.

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