“Markets can remain irrational longer than you can remain solvent.” – John Maynard Keynes

With the major stock market indices either ending in the red or merely edging into the green territory – in terms of their year-to-date performance – investors remain highly skeptical about where to invest for better returns. Indeed, the first quarter of 2016 remained largely volatile, somewhat unchanged from the picture witnessed last year.

Multiple staggering macroeconomic and socio-political factors like fluctuating oil prices and their consequent impact on commodity prices leading to volatility in commodity and energy sectors; employment growth in the U.S. leading to raised consumer spending; an appreciating dollar; weak overseas sales for U.S. companies; uncertainty around the Fed rate hike and the Middle-East economic crisis – all led to equity prices oscillating across the global map.

How’s the Stock Market Faring Now?

Looking forward, analysts, for now, expect no major overturn in the overall stock market scenario for the rest of 2016. However, this should not be a reason for investors to become overtly risk averse and stop investing in the stock market altogether.

In fact, if we take a look at China’s current situation, wherein the economy’s currency devaluation primarily kick started last year’s stock market crash; some stability looks to be in place. This is because even after ending the first quarter as the world’s worst-performing index, the Shanghai Composite index witnessed a meaningful rebound this March, indicating a receding volatility.

This definitely is a major thrust for those who have, for long, blamed China for the global downturn, to start looking at the investment world with renewed optimism. Moreover, the view of a few analysts at Deutsche Bank – that the U.S. job market will remain solid this year and will lead to a 12% surge in the S&P 500 by 2016-end – is encouraging.

As a silver lining to this challenging investment scenario, we hereby identify a few gems that continue to shine bright. The selection follows a meticulous evaluation of the stock market during the first quarter of 2016, which ended last week.

Our chosen ‘star’ stocks have not only excelled in the first quarter but are also expected to continue their outperformance through the rest of the year, as all of them bear a positive EPS growth rate estimate for the current year. Naturally, these should be rather appealing to investors who seek solid returns in the near term.

Key Picks

Using our easy-to-use Zacks screener, we hereby select four stocks that bear a Zacks Rank #1 (Strong Buy), have witnessed a price change of more than 40% year to date (YTD) and have an estimated EPS growth rate of more than 10% for the current year.

Federal-Mogul Holdings Corporation (FDML - Snapshot Report): Based in Michigan, this enterprise is a global leader in powertrain and vehicle technologies.  

• Stock price is up 43.65% YTD
• Current year EPS growth rate estimate is 51.7%

Green Dot Corporation (GDOT - Snapshot Report): Based in California, this enterprise operates as a pro-consumer technology bank holding company that provides personal banking for the masses.

• Stock price is up 40.01% YTD
• Current year EPS growth rate estimate is 14.2%

Qumu Corporation (QUMU - Snapshot Report): Based in Minnesota, this organization engages in enterprise video content management software business.

• Stock price is up 69.74% YTD
• Current year EPS growth rate estimate is 63.67%

SunCoke Energy Inc. (SXC - Snapshot Report): Based in Illinois, this enterprise manufactures and exports coke to the steel, coal and power industries.

• Stock price is up 75.5% YTD
• Current year EPS growth rate estimate is 146.88%

The Bottom Line

With Fed Chairwoman Janet Yellen putting forward a cautionary note with regard to the interest rate hike, citing that the global market is still showing signs of uncertainty, the S&P 500 closed at its 2016 highest on Tuesday, Mar 29.  

For now, we hope that the Fed restrains from raising the interest rate any time soon. If that happens, it will definitely be a major boost for investors. In this scenario, we expect the aforementioned stocks to be the best options for an investor’s portfolio, at the moment.