As the u.s. bull market is turning six years of age, growth investing is gaining huge popularity. Because growth investing is basically a momentum play, it is a great strategy in a trending market (a market characterized by a prolonged uptrend). Naturally, when the broader market sentiments have a predetermined positive direction, there is hardly any strategy as gainful as growth investing.
Growth stocks refer to those high quality stocks that are likely to witness revenues and earnings increase at a faster rate than the industry average. These stocks harness their momentum in earnings to create a positive bias in the market, resulting in rocketing share prices. With the U.S. economy growing at a faster clip not seen in over a decade, the stock market is set to surge again this year defying weak international trends. This would result in outsized returns for growth stocks.
While it is quite difficult to identify companies with strong business growth prospects, our Zacks stock screener makes this process simpler. First, we have selected those stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy). Then we narrowed down the list by picking companies that have estimated earnings growth of over 500% for 2015.
Below are three stocks that have incredible earnings growth and solid fundamentals. Stuffing these stocks into one's portfolio can thus lead to huge gains.
China Southern Airlines Co. Ltd. (ZNH)
Based in Guangzhou, China Southern Airlines provides air transportation services in the People's Republic of China, Hong Kong, Macau, Taiwan and internationally. It operates the largest fleet, most developed route network and largest passenger capacity of any airline in The People's Republic of China.
The stock has seen solid earnings estimate revisions from $2.86 to $4.09 per share for 2015 over the past 60 days. This represents a massive year-over-year increase of 529.23%. Revenues are also expected to grow 9.8% versus the industry average of 4.3%.