Economic diagnosis after 1 year of COVID-19: 6 action selections

U.S. economic growth is far from pre-pandemic levels, but has shown marked improvement from lows reached during the crisis. In addition, Wall Street staged a solid comeback and reached new milestones. Let’s take a look at the health of the US economy on this World Health Day and bring investors’ attention to key developments and some solid choices for a strong investment portfolio.

Like the six essential nutrients needed for good health, six pillars support the economy. Here we have selected six essential market nutrients as sectors and then focused on stocks that have a Zacks No.1 (strong buy) or 2 (buy) rank with a higher market cap in their sectors. respective using the Zacks stock filter. Other parameters taken into account include an VGM score of B or better, positive revisions to current year profit estimate in the last 30 or 60 days, positive current year EPS growth and the position in a leading sector of the Zacks (in the top 45%). .

You can see The full list of current Zacks # 1 Rank stocks here.

Vitamins: consumer sector

The consumer sector, hit hard by last year’s pandemic recession, is now enjoying huge optimism given the rapid pace of coronavirus vaccination, progress on more vaccines, unprecedented stimulus cycles and the relaxation of trade restrictions.

Americans are increasingly confident in the economy as the University of Michigan’s final sentiment index hit a pandemic high of 84.9 at the end of March from a preliminary reading of 83. The Conference Board’s confidence index on consumer confidence also rose to 109.7 in March – the highest level since the start of the pandemic in March 2020. During that time, a measure of manufacturing activity in the United States has soared to its highest level for over 37 years in March, driven by strong growth in new orders. In addition, historically lower rates have increased their purchasing power.

The combination of all these factors has led to higher demand for all types of products and services in the economy, which has driven up the consumer sector. He will continue to give the economy its regular dose of vitamins. Within this sector, Mohawk Industries Inc. MHK, one of the world’s leading manufacturers of rugs, rugs, ceramic tiles, laminates, wood, stone and vinyl flooring, is a great choice for investors.

This Zacks No. 2 company has seen its earnings estimates revised by 8 cents in the last 30 days of this year with an expected earnings growth rate of 8.9%. Mohawk Industries is part of a leading Zacks industry (top 44%) and has an VGM score of A, which suggests its potential to outperform in the coming months. The stock has soared more than 174% in one year.

Proteins: financial sector

Like protein, the financial sector contributes to the performance of a wide range of functions through its banks and financial institutions. The sector facilitates growth in all regions of the country. Shares in this sector rose on the back of surging yields and an improving economy. Raising rates is very profitable for the financial sector, as the steepness of the yield curve would increase the profits of banks, insurance companies, discount brokerage firms and asset managers.

The rapid pace of vaccinations and government stimulus programs has also fueled optimism about loan growth and lower than expected losses on bad debts. In addition, the Biden administration’s focus on stimulating the economy and improving the country’s infrastructure will further support the financial sector.

That said, The Goldman Sachs Group Inc. GS with a market capitalization of $ 113.3 billion, has more than doubled in one year. It is a leading global financial holding company providing investment banking, securities management and investment services to a diverse clientele. Zacks’ consensus estimate for 2021 has been revised up from a solid $ 1.05 over the past 30 days and shows substantial year-over-year growth of 29.5%. This Zacks # 1 ranked company is part of a top Zack industry (top 6%) and has a VGM score of A.

Minerals: medical sector

Just as minerals are important for bone structure, health care is essential for the economy. In fact, it is the backbone of an economy. Healthcare is one of the most important and fastest growing sectors thanks to an aging population, a growing middle class and the insatiable demand for new treatments and drugs for many diseases. About 10% of economic growth comes from this sector.

The industry is currently benefiting from COVID-19 vaccines and treatment, and many more are to come. One of the beneficiaries of this trend is Zacks ranked # 2 player. HCA Healthcare Inc. HCA of a leading Zacks industry (top 21%). It is the largest non-government operator of acute care hospitals in the United States. Zacks’ consensus estimate has risen 18 cents this year over the past 60 days to $ 12.67, indicating year-over-year growth of 15.9%. The stock has almost doubled in a year and has an VGM score of A.

Carbohydrates: technological sector

Similar to carbohydrates that provide energy to muscles and the brain, the tech sector fuels the economy with its wide range of products and services, including electronics, software, computers, and social media. The global digital shift has accelerated e-commerce for everything from remote working to entertainment and shopping. The rapid adoption of cloud computing, big data, Internet of Things, wearable devices, VR headsets, drones, virtual reality, artificial intelligence, machine learning, communication digital and 5G technology will continue to drive the industry forward.

Applied Materials Inc. AMAT with a Zacks # 2 rank and VGM score of B seems a solid choice. It is one of the world’s largest suppliers of equipment for the manufacture of semiconductors, liquid crystal or LCD flat screens, and solar photovoltaic cells and modules. The stock, which is owned by a leading Zacks industry (top 27%), has seen a robust profit estimate of 97 cents over the last 60 days of this year and has an expected earnings growth rate of 43.4%. It has jumped nearly 210% in one year.

Fat: construction sector

The construction sector – which accounts for 5.5% of GDP – provides energy support to the economy. Indeed, construction activity picks up when the economy strengthens. Although the cost of raw materials and construction has increased along with the rise in commodity prices, the construction industry is doing well with lower mortgage rates, which encourages people to buy more homes and made refinancing cheaper.

To exploit this uptrend, Lennar Corporation LEN, which focuses on residential construction and financial services in the United States, could be an exciting choice. The company’s earnings estimates increased by $ 1.61 in the last month of the fiscal year (ending November 2021). Zacks’ current consensus estimate is set at $ 10.98, up 39.9% year over year. Lennar has a Zacks No.1 rank and VGM score of A. He belongs to a leading Zacks industry (top 17%). LEN shares are up more than 167% in one year.

Water: transport sector

Transportation enables smooth movement of freight and passengers through different modes such as rail, trucks, ships and air. It occupies an important place in the global market and is often regarded as a barometer of economic health in the broad sense. As lockdown measures have eased and more people are vaccinated, the transport sector is on a solid growth path with increasing travel demand.

United Parcel Service Inc. UPS is the world’s largest express and parcel delivery company. The stock has seen a positive revision to the profit estimate of a dime for this year over the past 60 days and has estimated profit growth of 7%. UPS has a Zacks # 2 rank and VGM score of A. It belongs to a leading Zacks industry (top 44%). The title has gained nearly 80% in one year.

The hottest tech mega-trend of all

Last year it generated $ 24 billion in global revenue. By 2020, it is expected to explode through the roof to reach $ 77.6 billion. Famous investor Mark Cuban has said he will produce “the world’s first trillionaires,” but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks Top 3 Actions To Play This Trend >>

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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