The March Madness 'Sweet 16' Of Stocks

The frenzy of the National Collegiate Athletic Association (NCAA) Men's Division I Basketball Tournament goes beyond the sporting space. “March Madness” is often felt in the investment world where investors want to bet on the stock that could generate crazy money.

As the basketball tournament advanced to the Sweet Sixteen, let’s fill in 16 stock brackets first and then compare those like we do for March Madness to get to the real winner.

Strategy of Picking ‘Sweet 16’ Stocks

Akin to the basketball championship, we have chosen four sectors – technology, energy, medical, and basic materials -- among our 16 Zacks sectors that are currently hogging investor attention. We have picked the four best industries (within the top 35%) from each sector with the help of our Zacks Industry Rank.

Then, we have picked one stock from each industry having a Zacks Rank #1 (Strong Buy) or #2 (Buy) with the highest market capitalization in order to get the ‘Sweet Sixteen’ stocks. Top-ranked stocks indicate rising earnings estimates, and those with strong earnings momentum are more likely to outpace the market. This was a cakewalk, thanks to the Zacks Stock screener.

Once the stocks were chosen, the year-to-date performance was considered for the qualifiers to the Elite Eight. Notably, the stocks with the highest industry ranks will matchup with the stocks with the low industry ranks.

Technology

The four top industries and their best stocks in the technology sector are as follows:

1.    Computer-Optical Recognition: Top Rank; Stock - Mitek Systems (MITK -Snapshot Report)
2.    COMP-MAINFRAME: Rank in the top 2%; Stock - Lenovo Group Ltd. (LNVGY)
3.    ELEC MISC SERVICES: Rank in the top 2%; Stock - Jack Henry & Associates (JKHY - Snapshot Report)
4.    ELEC-CONNECTORS: Rank in the top 2%; Stock - Methode Electronics (MEI - Snapshot Report)

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By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. ...

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