Many stocks have experienced impressive gains this year as we continue to recover from the height of the pandemic. In fact, a lot of companies have year-to-date performances that we’re not accustomed to seeing. This has been a blessing for investors holding these stocks, but it has also been a curse for investors looking for the next big winners.
Common investing sense would lead many to believe that stocks with such high performance this year may see a drop off in performance as we get close to year-end. However, that is not necessarily the case. With companies handily beating earnings estimates in the most recent quarter, stocks are likely to continue to see gains.
To find these stocks, I often turn to our POWR Ratings system. Based on 118 different factors, the POWR Ratings help find stocks with the best chance to outperform. That’s why investors should consider highly rated stocks such as Zebra Technologies Corporation (ZBRA), Signet Jewelers Limited (SIG), and Robert Half International Inc. (RHI), which are all up more than 50% in 2021 and expected to continue rallying.
Zebra Technologies Corporation (ZBRA)
ZBRA is a leading provider of automatic identification and data capture technology for enterprises. Its solutions include barcode printers and scanners, mobile computers, and workflow optimization software. The company primarily serves the retail, transportation, logistics, manufacturing, and healthcare markets, designing custom solutions to improve efficiency for its customers.
The company, up 52% so far for the year, recently reported solid results for the third quarter. Both revenue and earnings beat analyst expectations, with earnings up 39.1% year over year due to increased organic sales. ZBRA is expected to continue gaining from a robust demand environment, advantageous acquisitions, and investments in growth.
The firm has an overall grade of B, which translates into a Buy rating in our POWR Ratings system. The company has a Sentiment Grade of A as it’s well-liked by Wall Street analysts. For instance, seven out of eleven analysts hold a Strong Buy or Buy rating on the stock. ZBRA also has a Quality Grade of B due to solid fundamentals.
As of the end of the most recent quarter, its cash balance was $307 million, which compares favorably to only $51 million in short-term debt. We also provide Growth, Value, Momentum, and Stability grades for ZBRA, which you can find here. ZBRA is ranked #10 in the B-rated Industrial – Machinery industry. For more top stocks in this industry, click here.
Signet Jewelers Limited (SIG)
SIG is a retailer of diamond jewelry. Its merchandise mix includes fashion, watches, and others. Some of its well-known brands include Kay, Jared, Zales, and Piercing Pagoda. The company also has a bridal category which includes engagement, wedding, and anniversary purchases. While the firm has an international segment, the majority of its revenue comes from North America.
The company, which is up a whopping 289% year to date, has been benefiting from growth in its e-commerce business and momentum in its Inspiring Brilliance strategy. This strategy focuses on expanding the company’s big banners, boosting its service revenues, and broadening its Accessible Luxury and Value segments.
Based on its recent success and expectations for continued business growth, management is expecting big things in fiscal 2022. SIG has an overall grade of A and a Strong Buy rating in our POWR Ratings system. The company has a Growth Garde of A as analysts expect earnings to rise 20.6% per year over the next five years.
The company also has a Momentum Grade of A due to strong short-, mid-, and long-term performance. The stock is even up 23.6% over the past month. For the rest of SIG’s grades (Value, Stability, Sentiment, and Quality), click here. SIG is ranked #6 in the A-rated Fashion & Luxury industry. For more top stocks in this highly rated industry, make sure to visit this link.
Robert Half International Inc. (RHI)
Founded in 1948, RHI provides temporary, permanent, and project-based staffing to corporations seeking finance, accounting, and technology employees. In fact, it is one of the largest global staffing firms, operating in hundreds of locations in several countries. Plus, its Protiviti subsidiary provides risk and business consulting and internal audit services to companies through global offices.
RHI recently reported strong third-quarter results. The company, which has gained more than 89% for the year, outperformed both earnings and sales estimates. Earnings were up over 100% year over year, while revenues rose 44% year over year. The firm has benefited from high demand for labor and its Protiviti subsidiary, which provides double-digit margins.
The company has an overall grade of A, translating into a Strong Buy rating in our POWR Ratings system. RHI has a Quality Grade of A, which isn’t surprising with a rock-solid balance sheet. The firm has a current ratio and a quick ratio of 1.7, which indicates it has more than enough liquidity to handle any short-term debts.
Its debt-to-equity ratio of 0.2 and return on equity of 39.9% are also encouraging. To access all of RHI’s grades, such as Growth, Value, Momentum, Stability, and Sentiment, click here. RHI is ranked #3 in the A-rated Outsourcing – Staffing Services industry. To see more top-ranked stocks in this top industry, visit this link.
Discover Today’s Best Value Stocks
This article was written by David Cohne, Chief Value Strategist for StockNews.com. David has helped investors find the most profitable stocks for over 20 years.
If you would like to see more of his best value stock ideas, then click the link below.
ZBRA shares were unchanged in after-hours trading Thursday. Year-to-date, ZBRA has gained 52.23%, versus a 25.26% rise in the benchmark S&P 500 index during the same period.
About the Author: David Cohne
David Cohne has 20 years of experience as an investment analyst and writer. He is the Chief Value Strategist for StockNews.com and the editor of POWR Value newsletter. Prior to StockNews, David spent eleven years as a consultant providing outsourced investment research and content to financial services companies, hedge funds, and online publications. David enjoys researching and writing about stocks and the markets. He takes a fundamental quantitative approach in evaluating stocks for readers.Even After 50%+ Gains This Year, 3 Stocks to Buy Without Hesitation appeared first on StockNews.com