5 Cheap Stocks With Big Long-Term Growth Prospects

I know that the next few months are full of uncertainty. While things haven’t been as bad as expected, it’s still a fact that second quarter results are shaping up to be pretty weak.

In any normal year, investors would have been more than a little concerned about the 35.5% earnings decline for the S&P 500 on 11.3% lower revenues. Especially when the Zacks Consensus Estimate wouldn’t have been topped by 79.6% of these companies if that estimate hadn’t been drastically cut down in anticipation of dismal results. There would have been a lot more conservatism if these were the results in any normal year.

But therein lies the beauty of the stock market. Because wherever the market is, it’s a starting point for the next phase of investing. So if you’re a new investor, there’s no reason to rue the gains you might have made from using the dip. And if you’re not, it’s time to understand that whatever may have happened in the last few months, whether you ended up gaining or losing from the volatility, now is the time to put it behind you and take stock of what’s going to happen in the future. Because the ability to anticipate the future and invest accordingly is what generates positive returns.

And today, I don’t want to talk about too many numbers. I want to tell you how to search smartly to overcome near-term uncertainty and generate long-term gain. There may be many ways to do this. But the method I’ve chosen for today is fairly simple. You don’t need to understand all the numbers yourself. All you need to do is follow some principles of smart investing using Zacks methodology. So here goes-

First of all, we must recognize that third quarter beats are going to be tougher simply because analysts are adjusting estimates for the new normal as we exit this quarter. As things stand now, analysts expect third quarter revenue and earnings for the S&P 500 to come in a respective 3.7% and 23.8% lower than 2019. So there’s the need for caution.

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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