These days, the headlines pretty much write themselves: Workers on strike. Conflict with China. Prices are up, sales are down.
It’s like you’re playing Mad Libs in the backseat of a minivan on a road trip. Just choose one of those headlines, and fill in a company name.
And isn’t it always the same small circle of companies we seem to keep talking about? Every day, a new story about a Big Tech stock. Anyone who’s in the Trillion-Dollar Club – or in a “cage match” with Elon Musk – is bound to make the front page.
It plays to our innate nosiness. And it’s certainly entertaining. But it’s not how you make money in stocks.
What I’m saying is that you have to be predictive – not reactive. Once news hits the front page, then the stock has probably already lifted off without you.
The good news is, once you line up all the predictive factors – like the ones I use to rank stocks with my Quantum Edge system – you’ll zero in on winners before all the other investors have even heard of them at all.
Out of my Top 20 stocks I provide weekly to my institutional and hedge-fund clients, only a handful tend to be household names.
In fact, many of the best stocks that frequently appear on my Top 20 are downright obscure.
This time last year, these were the five stocks that frequently made the Top 20 and performed the best over the subsequent six months. So, by Dec. 31, these stocks had posted double- or even triple-digit gains – while the broad S&P 500 was basically flat. We’re talking about:
- Syndax Pharmaceuticals (SNDX) +203%
- Cross Country Healthcare (CCRN) +92%
- Internat’l Money Express (IMXI) +58%
- Hostess Brands (TWNK) +56%
- Neurocrine Biosciences (NBIX) +39%
That’s two mid-cap biotechs…a staffing company for nurses and doctors…a payment processor…and the firm that makes Twinkies, Ho-Hos, and those little powdered donuts that call out to you from the checkout line.
If you bought some of those sugary snacks but never thought to buy shares of Hostess Brands last year, don’t worry.
Because there’s a new batch of top-ranked stocks with this kind of profit potential here in the second half of 2023. Here are the type of stocks making the most appearances in my Top 20 so far this year.
e.l.f. Beauty (ELF)
e.l.f. Beauty is another popular consumer brand though it’s a lesser-known stock. If anyone in your family likes to peruse Tik Tok or browse the aisles at Ulta Beauty for cool new shades of lip gloss, eyeshadow, or beauty balm, then they’ve probably bought e.l.f. Beauty or Keys Soulcare cosmetics, as in the singer/songwriter Alicia Keys.
But did you buy the stock? The Big Money Wall Streeters certainly have.
96.3% of ELF stock is owned by institutions. And they’ve continued to buy, as you see below. In the past six months, my system picked up 24 Big Money buys in ELF (versus zero sells):
Those Big Money buys were especially prevalent in the spring, and that’s no coincidence: These Wall Street players seemed to be snapping up ELF ahead of its earnings report.
And the bulls were rewarded on May 25 when the stock leapt 20% when the company beat forecasts for both revenue and profits – and, unlike many better-known companies, e.l.f. Beauty raised its forward guidance, too.
ELF has racked up Big Money buys after that upside surprise, too – most recently just this Wednesday. And it’s appeared in my Top 20 a few times, too.
With a current Fundamental Score of 83.3 and a Technical Score of 82.3 in my Quantum Edge system, ELF rates 82.8 overall. That’s in my preferred buy zone, a little to the high end of what I’m looking for.
DoubleVerify Holdings (DV)
DoubleVerify is a very different company that ranks equally high on my Quantum Edge predictive performance factors. Its stock has enjoyed plenty of Big Money buying, too – particularly in May and June – and is appearing frequently on my Top 20.
To be frank, software is an even better business than beauty products. DoubleVerify provides digital advertising software to help companies find the right customers on the right websites.
One of its partners is Meta Platforms (META), the social media empire that first took on Tik Tok with Instagram Reels…and is now going after Twitter with its new Threads app.
If you haven’t heard (because this story is consuming front-page headlines, too): Threads got 30 million users within a few hours of launch. People who are fed up with Twitter – but also have a Facebook/Instagram account – could easily jump over and give this similar app a try.
Unfortunately, these headlines don’t convey the best opportunities for investors. Because what’s NOT on the front page are the companies behind the scenes, like DoubleVerify, or what’s going on with their stocks.
DoubleVerify is generating double-digit growth and not taking on too much debt, earning it a Fundamental Score of 79.2.
The stock is also gaining Big Money fans on Wall Street to such a degree that it gets a blazing Technical Score of 94.1.
Altogether, DV stock rates 87.9 for its overall Quantum Score. That’s also hitting the upper end of my preferred buy range.
And speaking of high-quality software firms, there’s another that I added to my Quantum Edge Pro portfolio as it has appeared frequently on my Top 20 stocks list.
Quality is the key – and while my picks come to you from lots of different industries, that’s the one thing they all have in common.
Sometimes we’re going to miss out on gains from stocks like GameStop (GME) or Wayfair (W) that are speculative, to say the least.
I’m okay with that, because I also figure we’ll miss out on the “Icarus stocks” that fly too close to the sun – only to melt and plunge.
As I just reported to my Quantum Edge Pro members, we’re sitting on nine winners averaging 21% gains in our first nine months, with our other five positions down a mere 6.5% on average.
Many of these top-ranked stocks are still in the buy zone now, too. If you’d like the details, and to start getting my buy and sell alerts, click here to learn more.
Talk soon,
Editor,
Jason Bodner’s Power Trends
