HH Markets On Two-Weekly Winning Streak: 5 Great Momentum Picks

Strong Earnings Momentum

Market participants are expecting strong showing by American corporates as second-quarter earnings season slowly gathers steam. So far, 27 S&P 500 members have reported earnings results. For those companies, earnings were up 19.1% from the same period last year on 9.7% higher revenues.

Total earnings of the S&P 500 index is expected to be up 19.5% in the second-quarter 2018 from the same period last year driven by 8.2% year-over-year growth in revenues. A big driver of these positive revisions is obviously the direct impact of the tax cuts. (Read More: Market Unimpressed with Bank Earnings)

Our Top Picks

Solid macroeconomic fundamentals, government’s tax reform and deregulation proposals along with sustained strong earnings performance are major tailwinds for the U.S. stock markets. These factors are unlikely to disappear in the near term.

At this stage, investment in stocks with strong momentum will be lucrative. We have selected five stocks with Zacks Momentum Score of A and a Zacks Rank #1 (Strong Buy). Our research shows that stocks with a Momentum Style Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best opportunities in the Momentum-investing space.

The chart below shows price performance of our five picks in the last one month.

(Click on image to enlarge)

Papa Murphy's Holdings Inc. (FRSH - Free Report) operates as a franchisor and operator of the Take 'N' Bake pizza chain in the United States. In addition to scratch-made pizzas, the company offers a growing menu of grab ‘n’ goes items, including salads, sides, and desserts. Papa Murphy's Holdings has expected earnings growth of 153.3% for current year. The Zacks Consensus Estimate for the current year has improved by 15.2% over the last 30 days.

EOG Resources Inc. (EOG - Free Report) is one of the largest independent crude oil and natural gas companies in the United States with reserves in the United States, Trinidad, the UK, and China. EOG Resources has expected earnings growth of 368.8% for current year. The Zacks Consensus Estimate for the current year has improved by 2.7% over the last 30 days.

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