When I review the market at the end of each day, I see a general trend up as the bull market continues to forge ahead. But when I look at my individual holdings, I see much greater variation. Some holdings have gains, others losses and still others barely tread water. This tells me that the market is all about momentum stocks now.
Momentum stocks are hot plays that are trending higher and have the consensus opinion and business model behind them to continue going higher. As more investors become aware of these stocks, the share prices will only continue to rise.
4 Momentum Stocks
#1. Weight Watchers International (NYSE:WTW)
Weight Watchers is a lot like dieting: Good progress followed by times of falling off the wagon. Earlier this year, Weight Watchers was trading for under $10 a share and if I had known then what I know now, I would have added it to my hot stocks under $10 column.
But Weight Watchers is no longer cheap in terms of price alone. It is now one of the momentum stocks.
The company hired the former HSN CEO, Mindy Grossman and the stock hasn’t looked back.
In their recent earnings report, earnings per share came in at $0.64, beating estimates by $0.16. Revenues were up 10%, beating estimates by $12 million.
With Grossman and Oprah on board, Weight Watchers has a lot of growth and prosperity left in it if you get in now.
#2. Stamps.com (NASDAQ:STMP)
Of all the IPOs that came out of the dot-com boom, who would have imagined that Stamps.com would not only be standing once the dust settled, but would also be a thriving business?
The company has made some very smart acquisitions over the years and with the explosion of e-commerce, the stock is only going to keep rising.
This is evident by the numbers. Revenues are up 38% and operating income is up 67%. The number of paying customers is up 14% and the average monthly revenue earned per customer is up 20%.
This shows that Stamps.com is firing on all cylinders. And as e-commerce continues to grow, you can expect lots of growth from this company.
#3. Spark Therapeutics (NASDAQ:ONCE)
Of all the momentum stocks on this list, Spark Therapeutics is the riskiest. But we all know risk and reward are related, so if things work out, this stock is going to make many investors wealthy.
Why is this stock pick risky? The company deals in gene therapy to try to cure genetic diseases. As a result, the company spends mountains of money on research and trials. While the company does have revenues, they are still losing money because of the high cost of business.
The good news is that Spark Therapeutics has enough cash to stay in business until 2021. So that leaves us with 4 years for it to make headway on genetic diseases and turn a profit. And even if they don’t, they could be a prime takeover target for other biotech firms.
#4. TAL Education Group (NYSE:TAL)
This stock goes across the globe to China to reward investors. Tal Education Group helps students with after school tutoring, online courses and one-on-one personalized instruction.
This might not sound that exciting but understand this: China is growing and will one day become the world’s largest economy. Add to this the Chinese belief in getting the best education possible and Tal Education Group is in a win-win situation.
During its recent earnings release, revenues were up 65%. This is the lowest they have increased in the past few quarters. Most times, the rate of increase has been over 80%.
Final Thoughts
So there are 4 momentum stocks for you to add to your portfolio. Many of these have legs and room to continue growing, but that doesn’t mean you should sit back and wait. The prices of these stocks is only going to continue to rise, so the sooner you get in, the more profit you stand to make.
This author has no positions in any stock mentioned and does not plan to open any positions in any stocks mentioned for at least 72 hours after publication of this article.