Are you ready to make some killer stock investments now?
The market waits for no one as the bulls run up, up, and away. But it’s important to keep your emotions in check to ride out the inevitable market highs and lows, said Daniel Crosby, PhD, a psychologist, behavioral finance expert and co-author of The New York Times best-seller “Personal Benchmark.”
Don’t panic when the market is falling, and understand that market run-ups can be influenced by “irrational exuberance,” Crosby said, using a term made famous by former Federal Reserve Chairman Alan Greenspan. In a majority of instances, earnings, market caps and stock price trends over the long haul will provide just the information you need to take advantage of high-performing stocks.
Here are the five best stocks that you’ll want to buy before Labor Day for their impressive gains and outlook.
1. Southwest Airlines (NYSE: LUV)
- Founded: 1967
- Founders: Herb Kelleher, Rollin King
- Employees: 46,300
- Quarterly earnings: $691 million
- Stock Price: $38
Southwest is already up about 35 percent from a year ago and coming off of record profit in the second quarter of this year. But the good news doesn’t stop there. Low fuel prices and a host of new international destinations in Central America have bolstered this budget airline, now the nation’s largest domestic carrier.
“Southwest is set to take off nicely over the next 12 months,” said G. Mathis Conner, portfolio manager and quantitative value investor at the Conner Management Group in Houston. He believes that good news in the air will translate to great news on the trading floor. “Southwest can reach $43 over the next 12 months from its present price of about $35,” he said.
2. Amazon.com, Inc. (NASDAQ: AMZN)
- Founded: 1994
- Founder: Jeff Bezos
- Employees: 154,000
- Quarterly earnings: $92 million (Q2 2015)
- Stock Price: $536
Call it Amazon Prime. With a stratospheric share price above $500, Amazon has been the second-best performing stock in the Standard & Poor’s 500 index this year, up close to 75 percent.
“It is undeniably a hot stock when you consider the 9.8 percent rally the day after the company reported earnings,” said Katie Stockton, chief technical strategist for BTIG in New York City. “The positive reaction suggests Amazon still has the potential to surprise investors to the upside.” So who needs a stock ticker on their Kindle to track this kind of performance?
3. Netflix (NASDAQ: NFLX)
- Founded: 1997
- Founders: Reed Hastings, Marc Randolph
- Employees: 2,189
- Quarterly earnings: $26.3 million (Q2 2015)
- Stock Price: $124
Netflix now stands as the top performer in the S&P 500 this year. It trades at more than double its mid-December price of $45 a share and is up 70 percent from this time last year ($64).
Its performance doesn’t appear to be slowing anytime soon. Netflix just reported second-quarter earnings that beat Wall Street expectations. Here are some more meaningful numbers: Netflix added 3.28 million streaming subscribers coming off its recent 7-for-1 stock split.
Michael Wall, president and founder of Wall Financial Group, Inc. and Retire Well, remains confident in the company: “Netflix will continue to be a game changer over the next three to five years,” he said. “The service has already spread to 50 countries and continues to expand.”
4. Eagle Pharmaceuticals (NASDAQ: EGRX)
- Founded: 2007
- Founder: Scott Tarriff
- Employees: 36
- Quarterly earnings: $19.7 million (Q1 2015)
- Stock Price: $101
Small as this company is, it’s a giant profit machine on the NASDAQ, with a healthy prescription for wealth. This time last year, Eagle was trading at about $14. Eagle’s fantastic climb actually began in January, meaning that most of its growth has taken place this year. The stock price has been up and down, it should be noted.
Eagle’s product line, injectable meds primarily used in critical care and oncology, has attracted the attention of Teva Pharmaceuticals. Teva entered into an exclusive licensing agreement with Eagle in February for the drug Bendamustine, used to treat leukemia and lymphomas. “And it’s not just a one-drug company,” said Tim Lugo, an analyst with William Blair & Company. “They will have significant launches in 2016 that should drive pretty meaningful earnings.”
5. The Home Depot (NYSE: HD)
- Founded: 1978
- Founders: Bernard Marcus, Arthur Blank, Ron Brill, Pat Farrah
- Employees: 371,000
- Quarterly earnings: $1.6 billion (Q1 2015)
- Stock Price: $118
The Home Depot boasts plenty of curb appeal; it’s up more than 45 percent from August 2014. What’s behind the climb of this home improvement chain? To begin with, the housing market has finally left its Great Recession funk far behind.
The National Association of Realtors has just reported that existing-home sales for June hit an eight-year high, even as median home prices spiked at $236,400. That’s a record, surpassing the July 2006 peak of $230,400. It also translates to more home buyers and contractors purchasing products to spruce up homes for sale and those just purchased.
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Note: All stock prices are as of Aug. 5, 2015, and are rounded to the nearest dollar.